521 B.R. 124
Bankr. N.D. Miss.2014Background
- Debtors filed joint Chapter 7 petition on February 25, 2013 and claimed their residence as exempt under Mississippi law.
- Schedule C stated the home value at $130,000 with exemptions up to $75,000 per debtor, totaling $150,000 if allowed per-person exemptions.
- Trustee objected to the per-debtor doubling of the Mississippi homestead exemption, arguing only a single $75,000 exemption is allowed for the joint residence.
- Mississippi is an opt-out state; § 522(m) does not double exemptions under Mississippi law for joint debtors.
- Debtors own the home as tenants by the entirety; the case analyzes whether the exemption follows the sole marital entity or individual rights.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether joint debtors may double the Mississippi homestead exemption. | Pace asserts two separate exemptions under state law. | Trustee contends only one $75,000 exemption applies to the residence. | No; only a single homestead exemption may be claimed. |
| Effect of Mississippi opt-out on dual exemptions in a joint case. | Debtors rely on § 522(m) to permit separate exemptions. | Mississippi’s opt-out state status limits exemptions to state law; § 522(m) provides no benefit. | Mississippi opt-out precludes doubling; § 522(m) не increases exemptions. |
| Whether tenancy by the entirety allows separate exemptions for each spouse. | Debtors may treat as two separate rights in a single residence. | Exemption must follow the family unit or the single marital entity. | Exemption follows the entirety framework; nonexempt equity may be administered to joint creditors only. |
| What is the proper construction of Mississippi’s homestead statute in light of history and policy? | Statute should be read to allow separate exemptions. | Statute historically protects the family home with a single exemption. | Mississippi statute permits only one homestead exemption per residence. |
Key Cases Cited
- Granger v. Watson (In re Granger), 754 F.2d 1490 (9th Cir.1985) (opt-out states may limit joint debtors to a single exemption)
- Stevens, 829 F.2d 693 (8th Cir.1987) (joint debtors may not double exemptions under state law in opt-out states)
- Norris, 701 F.2d 902 (11th Cir.1983) (§ 522(m) does not mandate doubling where state law does not provide it)
- D’Avignon, 34 B.R. 796 (D. Vt.1982) (Vermont homestead protects family home; not doubled per residence)
- Cheeseman (In re Cheeseman), 656 F.2d 60 (4th Cir.1981) (policy concerns in allowing separate exemptions; rationale disfavored by many courts)
- Colwell v. Royal International Trading Corp. (In re Colwell), 196 F.3d 1225 (11th Cir.1999) (state exemptions and joint debtors; separate exemptions in some contexts)