456 B.R. 729
Bankr. D. Mass.2011Background
- Debtor filed Chapter 7 in the U.S. Bankruptcy Court for the District of Massachusetts; trustee objected to her homestead exemption in the Dracut property.
- Dracut Property purchased in 1991 as tenants by the entirety with her husband; no declaration of homestead filed by debtor.
- Debtor moved to the Lowell Property in 2000, later sold it to her son in 2004, and has resided there since; bankruptcy filed while living apart.
- Husband recorded a declaration of homestead for the Dracut Property on July 19, 2010; debtor did not file a declaration.
- Schedule A lists Dracut Property as jointly owned with husband; equity approximately $145,500 after a $98,000 secured claim; Schedule C claimed Mass. homestead exemption under ch. 188, §1.
- Issue presented: whether a non-declaring spouse may claim the homestead exemption based on the family member concept and whether abandonment terminates the estate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May debtor claim the homestead exemption without filing a declaration? | Ostrander asserts no declaration by debtor; she cannot claim. | Goulakos argues as family member she may claim under a spouse's declaration. | Debtor may claim as family member under the other spouse's declaration. |
| Does abandonment by one spouse terminate the homestead estate? | Ostrander contends abandonment could terminate. | Goulakos argues unilateral abandonment does not terminate when the other spouse occupies the property. | Unilateral abandonment by debtor does not terminate where husband continues to occupy. |
| Does occupancy at filing or during the declaration govern the exemption? | Ostrander relies on occupancy necessity at filing of the declaration; continued protection applies. | Goulakos contends current occupancy status matters for exemption. | Occupancy requirement applies at the time of declaration; ongoing occupancy not necessary for the family-based exemption. |
| Is the debtor a qualified family member under ch. 188, § 1 given marital status and residence? | Ostrander treats debtor as a family member of the declarant husband. | Goulakos argues no limitation on family status based on residence changes. | Debtor remains a qualified family member; marital status and occupancy satisfy § 1. |
Key Cases Cited
- In re Garran, 338 F.3d 1 (1st Cir. 2003) (state homestead exemptions construed liberally in favor of debtors; family protection)
- In re Marrama, 307 B.R. 332 (Bankr.D.Mass. 2004) (abandonment considerations and termination of homestead estate; multiple sources)
- In re Webber, 278 B.R. 294 (Bankr.D.Mass. 2002) (abandonment termination theory under Massachusetts statute)
- In re Vasques, 337 B.R. 255 (Bankr.D.Mass. 2006) (daughter covered by mother's declaration under family concept)
- In re Fiffy, 281 B.R. 451 (Bankr.D.Mass. 2002) (family protection emphasis in Massachusetts homestead)
- Dwyer v. Cempellin, 673 N.E.2d 866 (Mass. 1996) (principles on homestead protections and family scope)
- In re Taylor, 280 B.R. 294 (Bankr.D.Mass. 2002) (spouse may claim exemption under another's declaration)
- In re Ballirano, 233 B.R. 11 (Bankr.D.Mass. 1999) (family-based exemption coverage)
- In re White, 87 Mass. (5 Allen) 73 (Mass. 1862) (early interpretation of family rights under homestead)