575 B.R. 848
Bankr. E.D. Ark.2017Background
- Debtors filed jointly under Chapter 7; Trustee objected to exemptions.
- Trustee asserts property claimed as exempt is not jointly owned or properly owned by debtors.
- Trustee challenges 17 Acre Tract exemption under 11 U.S.C. § 522(d)(1) for non-residence/use.
- Trustee argues Faulkner County Properties undervalued to over-claim exemption.
- Debtors contend inchoate dower/curtesy rights allow joint exemptions and that 17 Acre Tract was a residence or rental property.
- Court held Trustee’s objections sustained and allowed amended Schedule C after ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ownership of exemptions contested | Trustee: assets are not jointly owned; debtor lacks ownership | Debtors: inchoate dower/curtesy rights create exemptions | Trustee’s objections sustained; exemptions not valid as joint ownership |
| 17 Acre Tract exemption under § 522(d)(1) | Trustee: property not used as a residence on petition date | Debtors: property used as residence or constructively occupied | Trustee’s objection sustained; not exempt under § 522(d)(1) |
| Valuation of Faulkner County Properties | Trustee: values inflated; exemptions overstated | Debtors: values supported by schedules | Trustee’s valuation challenge sustained; exemptions overstated and need amended Schedule C |
Key Cases Cited
- In re Flippin, 334 B.R. 434 (W.D. Ark. 2005) (recognizes ancestral property dower/curtesy treatment (contextual))
- Webber v. Webber, 331 S.W.2d 345 (Ark. 1998) (dower/curtesy rights in real property; inchoate prior to death)
- Graves v. Graves, 32 S.W.2d 630 (Ark. 1930) (one-third dower against creditors in future interests)
- Mayo v. Arkansas Valley Trust Co., 200 S.W. 505 (Ark. 1917) (one-third/one-half allocations to collateral heirs vs. creditors)
- In re James, 496 B.R. 590 (W.D. Ark. 2013) (equitable distribution context (not binding here))