448 B.R. 757
Bankr. S.D. Ohio2011Background
- Debtors filed a voluntary Chapter 7 petition in the SD Ohio on February 25, 2010, while residing in Ohio.
- For the 180 days immediately preceding the 730-day look-back period, debtors were domiciled in Florida during the 730-day look-back window and resided in Ohio during the petition year overall.
- Initially debtors claimed Florida exemptions, then amended on April 6, 2010 to claim federal exemptions under § 522(d).
- Trustee objected to the claimed exemptions, prompting an evidentiary hearing on August 31, 2010.
- Florida is an opt-out state; Florida prohibits federal exemptions for Florida residents, raising questions about extraterritorial application when debtors are nonresidents.
- Court must determine whether debtors may elect federal exemptions under § 522(d) given the domicile rules and Florida’s opt-out provisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What law governs exemptions under §522(b)(3)(A)? | Beckwiths: domicile look-back favors federal exemptions. | Trustee: Florida exemptions control due to residency look-back. | Florida exemptions apply only to Florida residents; federal exemptions may be elected. |
| Does Florida's opt-out statute apply to nonresidents? | Nonresidents may still access federal exemptions; Florida’s opt-out does not bind nonresidents. | Florida residents only are barred from federal exemptions by § 222.20. | Florida’s opt-out does not extend to nonresidents; nonresidents may claim federal exemptions. |
| Does the hanging paragraph of §522(b)(3) permit federal exemptions where state law would otherwise apply? | If state law would render no exemptions, hanging paragraph allows federal exemptions. | State exemptions may preclude federal exemptions; need to apply Florida exemptions if applicable. | Debtors may elect federal exemptions under §522(d). |
| Does §522(b)(3) preempt Florida residency restrictions? | §522(b)(3) preempts state residency limits to exemptions to let debtors use federal exemptions. | Rhodes/opt-out framework preserves state flexibility and does not permit preemption in nonresident cases. | Preemption is not required; nonresidents may use federal exemptions because Florida’s opt-out does not apply to them. |
Key Cases Cited
- In re Garrett, 435 B.R. 434 (Bankr.S.D.Tex.2010) (discusses § 522(b)(3)(A) preemption and domicile rules)
- In re Brooks, 393 B.R. 80 (Bankr.M.D.Pa.2008) (privacy of state exemption preemption and § 522 look-back)
- Rhodes v. Stewart, 705 F.2d 159 (6th Cir.1983) (states may opt-out and Congress did not preempt state exemptions)
- In re Camp, 631 F.3d 757 (5th Cir.2011) (nonresidents are not bound by a state's opt-out when not residing there)
- In re Chandler, 362 B.R. 723 (Bankr.N.D.W.Va.2007) (look-back and domicile considerations in exemptions)
- Farina v. Nokia, Inc., 625 F.3d 97 (3d Cir.2010) (presumption against preemption and purpose of Congress in preemption analysis)
- In re Banner, 394 B.R. 292 (Bankr.D.Conn.2008) (preemption analysis under Supremacy Clause)