487 B.R. 47
Bankr. D. Mass.2013Background
- Debtors filed a Chapter 7 petition on March 2, 2012.
- Real property listed: Unfinished Construction—Lot 74 Susua Alta Comm., Yauco, Puerto Rico, valued at $46,500.
- Debtors lived in PR residence from the 1980s to 1995; have not lived there for at least 10–17 years and are attempting to sell.
- Original Schedule C claimed the Yauco property exempt under Massachusetts law; Toyota exempt under Massachusetts law.
- Trustee objected to the Yauco exemption as inapplicable out-of-state property; later amended Schedule C to claim exemptions under 11 U.S.C. § 522(d)(1) for the Yauco property and § 522(d)(2) for the Toyota.
- Court sustained trustee objections in part, holding Yauco not exempt under § 522(d)(1) but allowing a wildcard exemption under § 522(d)(5); Toyota exemption limited to $3,450 per debtor and property ownership issues complicate Caraballo’s claim
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Yauco property qualify under § 522(d)(1) as a residence? | Ostrander: no, residence use ceased; property uninhabitable and not the petition-date home. | Feliciano/Caraballo: intend to return to Yauco; property was their residence prior to 1995 and is their domicile. | No; not exempt under § 522(d)(1). |
| If not, can debtors still exempt under § 522(d)(5) the “wild card” exemption? | Ostrander: allow wildcard up to $11,975 with 522(d)(1) gap. | Debtors: entitlement to wildcard is available when 522(d)(1) denied. | Debtors qualify for wildcard exemption up to $11,975, potentially stacking to $23,950 with 522(m). |
| Are there limitations on the use of the property to satisfy § 522(d)(1) besides occupancy? | Ostrander: lack of habitation/intent defeats exemption. | Debtors: ongoing intent to return supports use as a residence. | Habitable use required; uninhabitable property cannot be exempt under § 522(d)(1). |
| Is the 1994 Toyota exemptable given ownership by Feliciano and schedule listing? | Ostrander: maximum under § 522(d)(2) is $3,450 per debtor; vehicle not jointly owned. | Debtors: joint debtors may aggregate exemptions; ownership by Feliciano limits Caraballo's claim. | Maximum exemption for vehicle is $3,450; Caraballo cannot claim exemption due to ownership. |
Key Cases Cited
- In re Gentile, 483 B.R. 50 (Bankr.D. Mass. 2012) (principles for exemptions and election under § 522(b))
- In re Lawrence, 469 B.R. 140 (Bankr.D. Mass. 2012) (interprets 'uses as a residence' under § 522(d)(1))
- In re Gandy, 327 B.R. 807 (Bankr.S.D. Tex. 2005) (present-use requirement for residence exemption)
- In re Lozada Rivera, 470 B.R. 109 (Bankr.D.P.R. 2012) (necessity of some positive indication of intent to return to property)
- In re Lusiak, 247 B.R. 699 (Bankr.N.D. Ohio 2000) (constructive occupancy may satisfy exemption in some contexts)
- In re Holland, 474 B.R. 826 (Bankr.E.D. Mich. 2012) (habitation requirements for exemption where property is uninhabitable)