607 B.R. 360
Bankr. N.D. Ga.2019Background
- Debtor Constance Gail Mason sold her one-half interest in a jointly owned residence pre-petition and received $75,000 in proceeds, which she deposited into a segregated Fidelity Bank savings account.
- On the Chapter 7 petition date the Debtor listed cash/accounts totaling $74,850 and represented she did not own any residence.
- Debtor claimed Georgia homestead exemptions in the savings account under O.C.G.A. § 44-13-100(a)(1) (homestead) and (a)(6), asserting the proceeds retained the homestead exemption.
- Trustee objected, arguing exemptions are fixed at the petition date, the Debtor did not own a residence then, and Georgia law does not extend the homestead exemption to sale proceeds.
- Debtor relied on Florida authority permitting exemption of proceeds when debtor had a good-faith intention to reinvest in another homestead; no evidence of such intent was offered here.
- The Court sustained the Trustee’s objection, denied the (a)(1) homestead exemption for the proceeds, granted turnover, and ordered Debtor to turn over $11,350 to the Trustee.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Georgia homestead exemption under O.C.G.A. § 44-13-100(a)(1) covers proceeds of a pre-petition voluntary sale when proceeds are segregated | Trustee: exemption fixed at petition date; no residence owned on petition date so proceeds are not exempt | Mason: proceeds from sale of homestead retain exemption; relied on analogous Florida rule when intent to reinvest exists | Court: denied homestead exemption for proceeds; exemptions determined at filing; statute covers property used as a residence on petition date, not sale proceeds |
Key Cases Cited
- White v. Stump, 266 U.S. 310 (1924) (exemption rights are determined as of the petition date)
- In re Yerian, 927 F.3d 1223 (11th Cir. 2019) (confirms claim of exemption is fixed at petition date)
- In re Page, 289 B.R. 484 (Bankr. S.D. Ga. 2003) (Georgia court refused homestead exemption where debtor did not reside in property at issue)
- In re Holt, 357 B.R. 917 (Bankr. M.D. Ga. 2006) (Georgia law does not extend homestead exemption to contiguous rental property not used as residence)
- In re Simms, 243 B.R. 156 (Bankr. S.D. Fla. 2000) (Florida court allowed homestead proceeds exemption only if debtor showed pre-sale good-faith intent to reinvest in another homestead)