George Burciaga v. Alex Moglia, 944 F.3d 681

George Burciaga lost his job in May 2018 and filed Chapter 7 bankruptcy about a week later; his former employer owed him roughly $24,000 for unused vacation time.
Illinois law treats vacation pay as wages and limits creditor recovery to 15% of unpaid wages (protecting 85%) under its Wage Deduction Statute.
Illinois has elected to make its exemption scheme exclusive for bankruptcy purposes under 11 U.S.C. §522(b)(2), so state-law exemptions govern federal bankruptcies.
The Chapter 7 trustee objected to Burciaga’s claim that 85% of the vacation pay was exempt; the bankruptcy and district courts sided with the trustee, reasoning Illinois did not intend the state exemption to apply in bankruptcy.
The Seventh Circuit reversed: it held federal law applies whatever state law exempts (irrespective of alleged state-legislative intent), that the amended Illinois code makes the 15%-limit comprehensive for collection including turnover proceedings, and that exemption status is fixed as of the bankruptcy filing date.

Issue	Burciaga's Argument	Trustee's Argument	Held
Whether 85% of unpaid vacation (wages) is exempt in bankruptcy under Illinois law	Illinois law exempts 85% of unpaid wages and vacation pay counts as wages	Illinois did not intend its wage-exemption to shield claims in federal bankruptcy; statutes do not mention bankruptcy	Reversed: 85% of unpaid wages (including vacation pay) are exempt and apply in bankruptcy under §522(b)(3)(A)
Whether Wienco precedent still precludes the exemption given turnover proceedings	Illinois amended its code to extend the wage-exemption to turnover proceedings, so Wienco is superseded	Wienco showed wage exemption did not apply to all collection forms pre-amendment	Amendment makes the wage limit comprehensive; Wienco no longer controls
Whether conversion of a wage claim to cash defeats the exemption	Exemption is measured at the petition date; Burciaga had a wage claim on filing, so it is protected	Once wages are paid and become cash, they are freely reachable by creditors	Exemption is fixed at filing; a wage claim existing on that date is protected even if paid later

In re Geise, 992 F.2d 651 (7th Cir. 1993) (discussed legislative-intent references but does not override §522’s application of state exemptions)
Wienco, Inc. v. Scene Three, Inc., 29 F.3d 329 (7th Cir. 1994) (previously held wage exemption did not cover all collection forms prior to statutory amendment)
Owen v. Owen, 500 U.S. 305 (1991) (exempt property determined on petition filing date)
White v. Stump, 266 U.S. 310 (1924) (bankruptcy filing as a line of cleavage for property rights)
Law v. Siegel, 571 U.S. 415 (2014) (courts may not override statutory rules for equitable reasons)
In re Kmart Corp., 359 F.3d 866 (7th Cir. 2004) (limits on judicial alteration of statutory bankruptcy rules)
Robinson v. Hagan, 811 F.3d 267 (7th Cir. 2016) (courts enforce exemptions as written, leaving policy/value limits to legislatures)
Brown v. Sommers, 807 F.3d 701 (5th Cir. 2015) (exemptions tracked from pre-filing property entitlement)
Pasquina v. Cunningham, 513 F.3d 318 (1st Cir. 2008) (same: exemptions measured at filing date)