In Re Alan Wayne Raynard
OPINION RE: REQUESTED CONFIRMATION OF DEBTORS’ AMENDED CHAPTER 13 PLAN
Alаn and Elizabeth Raynard seek confirmation of their Chapter 13 plan. That plan discriminates between their joint creditors and their individual creditors by offering a 100% dividend to their joint creditors instead of the much smaller dividend offered to their individual creditors. Confirmation of their plan is denied for the reasons stated in this opinion.
I. PROCEDURAL BACKGROUND
The Raynards filed their Chapter 13 petition on January 13, 2005. I first considered confirmation of their plan on March 8, 2005. The hearing has been adjourned twice in order to give the Ray-nards the opportunity to address my concerns about the proposed treatment of joint creditors under their plan. The Ray-nards briefed the issue and I heard further argument at the June 7, 2005 hearing. The confirmation hearing was then adjourned again to July 19, 2005.
II. FACTUAL BACKGROUND
The Raynards are dairy farmers. Both their residence and their farm are located on contiguous parcels of real property in Pickford Township, Michigan. The Ray-nards own both parcels of property as tenants by the entirety.
The Raynards’ schedules set the value of their farm at $240,000 and the value of their residence at $130,000. Their schedules also indicate that their farm is subject to a mortgage lien in the amount of $129,715 and that their residence is subject to two other mortgage liens that total $112,874. Consequently, their sсhedules establish that there is at least $86,285 equity in their farm and at least $4,126 equity in their residence. 1
The Raynards claim both their farm and their residence as exempt.
2
The Ray-
The Raynards filed their Chapter 13 plan at the same time they filed their schedules. Their original plan proposed paying nothing to unsecured creditors although their Schedule F .discloses unsecured, non-priority debt of $88,101 as being owed either individually by one of them or jointly by both of them. 4 However, the Raynards thereafter filed a preconfirmation amendment to their plan on February 17, 2005. 5 That amendment divided the Raynards’ unsecured, non-priority creditors into two classes, with one class being comprised of those creditors with joint claims against both Mr. and Mrs. Raynard and the other class being comprised of creditors with claims against only Mr. Raynard or against only Mrs. Ray-nard. The amendment proposed to рay a base amount of $29,443 to the joint creditors but a base amount of only $1,000 to the other creditors. 6
The Raynards filed a second pre-confir-mation plan amendment on April 25, 2005. The second amendment identifies nine creditors as joint unsecured creditors. It further provides that each of these creditors is to “be paid 100 percent through the debt plan.” The April 25, 2005 amendment leaves unchanged the $1,000 base amount proposed to be paid to the Ray-nards’ other unsecured creditors.
There are no other amendments filed with respect to the Raynards’ proposed Chapter 13 plan. Therefore, the plan presented for confirmation at the June 7, 2005 hearing was the Raynards’ plan as amended on February 17, 2005 and then again on April 25, 2005.
III. DISCUSSION
A. Discrimination Between Classes of Unsecured Creditors.
A Chapter 13 plan may not be confirmed unless it complies with the provi
There is no question that a debtor’s Chapter 13 plan may designate two or more classes of unsecurеd claims and that the plan may then discriminate between the designated classes.
Other permissible discrimination under
In the instant case, the Raynards havе designated nine of their unsecured creditors to receive distributions under their plan equal to 100% of the amount of those creditors’ allowed claims. In contrast, their other creditors, who total sixteen in number and $53,606 in amount, are to share only $1,000.
The Raynards’ desire to prefer their joint creditors over their other creditors stems from various courts’ interpretations of
(B) any interest in property in which the debtor had, immediately before the commencement of the case, an interest as a tenant by the entirety or joint tenаnt to the extent that such interest as a tenant by the entirety or joint tenant is exempt from process under applicable nonbankruptcy law.
It is black letter law in Michigan as well as most other states that recognize tenancies by the entireties that only creditors of both the husband and wife can levy against property owned by the entire-ties.
Michigan National Bank v. Chrystler (In re Trickett),
Most, but not all courts, have also held that the portion of the entireties interest that cannot be exempted because of joint claims must be administered exclusively for the benefit of the joint claimants.
In re Oberlies,
The Raynards contend that a trustee would in fact administer their residence and farm as a separate estate were they to have filed a Chapter 7 proceeding and, therefore, they must address the joint obligations they owe differently in order to comply with the “best interests” standard for confirmation.
(4) the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title on such date;
The Raynards reason that their plan must prefer their joint creditors over their other creditors by creating a separate, 100% class for their joint creditors because a Chapter 7 trustee would have given these creditors the same preference had their bankruptcy estates been administered instead as Chapter 7 proceedings.
12
Indeed,
In re Chandler,
I cannot argue with the Raynards’ logic. However, I do question the premise upon which it is based. While the Bankruptcy Code clearly permits a Chapter 13 debtor to discriminate among his creditors, the Bankruptcy Code also places a premium upon creditors being treated equally. Indeed, the Sixth Circuit recently ruled that attorneys who represent Chapter 11 debtors must disgorge interim compensation received in order to equalize distribution among Chapter 11 administrative claimants.
Speaker Motor Sales Co. v. Eisen,
“Equality of distribution among creditors is a central policy of the Bankruptcy Code. According to that policy, creditors of equal priority should receive pro rata shares of the debtor’s property.” Begier v. Internal Revenue Service,496 U.S. 53 , 58,110 S.Ct. 2258 ,110 L.Ed.2d 46 (1990). Equality of distribution would be vitiated if one equally situated administrative claimant-Bays-reeeived more than his pro rata share.
Id. at 664.
Consequеntly, a court should always scrutinize a debtor’s reasons for creditor discrimination in a plan.
Moreover, the funds which the Raynards intend to use to pay their joint creditors in full are funds which otherwise would have to be made available to all of their creditors, both joint and individual.
Therefore, it is appropriate to look more closely at what the Raynards’ propose. Specifically, it is appropriate to test the Raynards’ premise that the “non-exempt” portion of their interest in the entireties property would be administered for the exclusive benefit of their joint creditors were their case instead administered as a Chapter 7 case.
B. Trickett and Grosslight.
Michigan National Bank v. Chrystler (In re Trickett),
Trickett was decided shortly after the enactment of the Bankruptcy Code. Wilson Trickett had filed a petition for relief under Chapter 7. Verda Trickett, his wife, did not join in the petition. Mr. and Mrs. Trickett owned a number of parcels of property as tenants by the entirety. Mr. Trickett set the value of his wife’s and his interests in these properties at more than $2 million. Michigan National Bank was a joint creditor of Mr. and Mrs. Trickett. Its claim was approximately $40,000. Another joint creditor had a claim against the Trieketts in the amount of $65,000.
Under the former Bankruptcy Act, creditors holding unsecured claims against the debtor and his spouse were barred from enforcing their claims against entireties property once the debtor’s discharge was entered.
Fetter v. United States,
Michigan National Bank commenced an adversary proceeding against Mr. Trickett. Michigan National Bank’s complaint requested both relief from the automatic stay so that Michigan National Bank could proceed with a state court action to collect its joint claim against Mr. and Mrs. Trick-ett and the entry of a Black order pending the outcome of the state court action. The court in Trickett denied both requests on the basis that such relief was no longer necessary under the Bankruptcy Code. The court described the “Black order” process as both cumbersome and unfair.
The Trickett court also suggested an alternative procedure. The suggested procedure recognizes a separate class of creditors consisting of only those creditors with claims against both the debtor and the debtor’s non-filing spouse. These creditors are given the opportunity to file “joint” proofs of claim against the bankruptcy estate. Whatever joint claims are filed are then separately administered by the trustee. The trustee first subjects the joint claims to a separate objection process. If joint claims still remain after objection, the trustee must dispose of the entireties property pursuant to Sections 363(h), (i) and (j). The trustee then distributes the bankruptcy estate’s portion of these proceeds to those joint creditors whose joint claims have been allowed. If the bankruptcy estate’s portion of the proceeds is greater than the amount of the allowed joint claims, the surplus is distributed to the debtor.
Grosslight
involved a similar factual situation. Liberty State Bank, like Michigan National Bank, wanted to protect its joint claim against Terry Grosslight and his non-filing spouse from the consequences of
Harris
and
Fetter.
Therefore, Liberty State Bank had commenced an adversary proceeding to modify the automatic stay so that it could proceed with its state court collection action against both Mr. and Mrs. Grosslight. It also appears that Liberty State Bank had requested the bankruptcy court to defer the granting of Mr. Gross-light’s discharge. The bankruptcy court denied both requests and granted Mr. Grosslight his discharge.
Grosslight,
The Raynards read into
Trickett
and
Grosslight
much more than either of these two decisions deserve. Neither decision addressed head on the question that is squarely before me in this instance: whether the non-exempt portion of entire-ties property claimed as exempt under
The Sixth Circuit likewise was never called upon in
Grosslight
to consider
It follows that Liberty is entitled to file a proof of claim on remand and attempt to show the validity of its claim. In appropriate cases, the court may lift the automatic stay to allow the creditor to proceed against the entireties property in state court.11 U.S.C. § 362(d) . We see no reason for such a procedure here, when judicial economy would be better served by a single proceeding in bankruptcy court.
Grosslight,
I recognize that
Grosslight
can be interpreted as an implicit (and prophetic) adoption of the position later taken by other courts, that being that the non-exempt portion of entireties property claimed as exempt under
C. Oberlies, Monzon, and McRae.
There are a number of cases in which a court has held that the non-exempt portion of the entireties property claimed as exempt under
I begin by observing that the courts in
Oberlies, Monzon,
and
McRae
each fought an uphill battle to reach their respective conclusions. It is universally accepted among all courts that a debtor’s interest in entireties property becomes property of his bankruptcy estate.
In re Grosslight,
Moreover, Section 726 requires distribution of the property of the estate pursuant to a priority scheme that makes no distinction between claims against only the debtor and claims against both the debtor and his spouse. Nor is there any distinction between property of the estate deriving from the debtor’s interest in entireties property and property of the estate deriving from the debtor’s interest in other types of property. Indeed, Judge Spector acknowledged in Oberlies that:
[n]o statutory basis exists for requiring the bankruptcy trustee to administer aseparate estate within the context of the overall bankruptcy ease for the benefit of joint creditors.
Oberlies,
Therefore, the burden was upon the courts in
Oberlies, Monzon and McRae
to justify an alternative scheme for the distribution of the non-exempt portion of entire-ties property claimed as exempt under
The first argument offered to support administering the non-exempt interest for the benefit of only joint creditors is that “the plain language of
[A] pro rata distribution of entireties property to all creditors would be inconsistent with§ 522(b)(2)(B) since that provision was intended to incorporate Florida’s protection of these parties. It would make no sense for Congress to enact§ 522(b)(2)(B) which entitles joint creditors to reach entireties property in bankruptcy, yet substantially dilutе that interest once that property is in the estate by requiring joint creditors to share the entireties property with individual creditors.
Monzon,
I agree that the plain language of
Section 726 also casts doubt upon the interpretation of
One can certainly argue that Congress simply overlooked the fact that special procedures were also needed to protect “joint claims” (as opposed to “community claims”) under
If Congress enacted into law something different from what it intended, then it should amend the statute to conform it to its intent. “It is beyond our province to rescue Congress from its drafting errors, and to provide for what we might think ... is the preferred result.” United States v. Granderson,511 U.S. 39 , 68,114 S.Ct. 1259 ,127 L.Ed.2d 611 .511 U.S. 39 ,114 S.Ct. 1259 ,127 L.Ed.2d 611 (1994) (concurring opinion). This allows both of our branches-to adhere to our respected, and respective, constitutional rоles. In the meantime, we must determine intent from the statute before us.
Lamie v. U.S. Trustee,
Moreover, there is good reason to believe that Congress did not err when it enacted the Bankruptcy Code without a special procedure for the administration of non-exempt entireties property either within
I see no reason why Congress would intend this result if the dеbtor were to
The second argument offered to justify separate administration of the non-exempt portion of entireties property claimed as exempt under
[T]he mere fact that statutes do not specifically address the issue does not mean that the procedure is improper. The procedure is clearly a creature of judicial interpretation of state property rights. It is not unusual for there to be some tension when administering state property rights in a federal bankruptcy context. When there is a seeming clash, our duty is to abide by the state substantive law unless there is an overriding federal policy which ought to tаke precedence. Butner v. United States,440 U.S. 48 ,99 S.Ct. 914 ,59 L.Ed.2d 136 (1979). The absence of specific enabling legislation to direct the trustee to administer separate estates is not such an overriding federal policy. Thus, state law, which gives joint creditors, but only joint creditors, rights in entireties property, should prevail in this context.
In re Oberlies,
However, Butner is not on point because property rights are not at issue. The reason why joint creditors enjoy the position that they do with respect to entireties property is not because they themselves have an interest in the entireties estate. Rather, it is the unique character of the debtor’s property interest in the entireties estate that gives a joint creditor its advantage.
It is well settled that when a judgment is rendered against one of two tenants by entireties, a levy under execution on such judgment cannot be made on the real estate held by them as tenants by entireties. This is because [sic] of the peculiar nature of the estate held by them. Both are seized of the whole, and an estate by entireties is inseparable and cannot be partitioned. Therefore, it has been quite universally held that an estate by entireties cannot be sold upon execution on a judgment rendered against either the husband or wife, becausе neither has any separate interest in such an estate.
Sanford v. Bertrau,
On the other hand, the protection afforded to each spouse disappears if the creditor is fortunate enough to be a creditor of both spouses.
Upon principle, we can see no reason why the real estate of husband and wife held by them as tenants by the entire-ties, independent of homestead and statutory exemptions, should not be subjected to the payment of their joint debts. They own the entire property. The parts cannot be greater than the whole. They may dispose of it by their joint action. Each is liable to pay the wholejudgment, and both are liable to pay any part of it.
Id.
at 253-54,
It may have been convenient for the court in
Oberlies
to describe a joint creditor’s ability to levy tenancies by the entirety as property interests in order to cite
Butner
as justification for its creation of a separate estate for the benefit of joint creditors. However, I doubt whether the
Oberlies
court seriously believed that a joint creditor’s ability to levy is in fact a property right. Otherwise, the court would have then been compelled to explain why unsecured creditors generally should not also be treated as having property rights in, for example, a vacant lot owned by a debtor in fee without co-owners simply because each of those creditors had the ability to levy against that lot pre-petition. Moreover, the court would have also had to explain why a joint creditor should not be able to demand the establishment of a similar separate estate for the administration of its supposed property rights when the debtor with an interest in entireties property chooses the federal exemptions under
The distribution scheme required by
In this instance, the Bankruptcy Code is unambiguous. A debtor who claims the
The third argument to justify the creation of a separate estate is equity. For example, the court in
McRae
"determined that it would be “patently unfair” for all creditors to share in the non-exempt portion of the entireties property claimed by a debtor pursuant to
Since a debtor’s individual creditors could never have reached the entireties property under Florida law, they cannot obtain a different and more favorable result in bankruptcy by sharing in the distribution of these assets.
In re McRae,
However, the Bankruptcy Code is replete with perceived inequities. Indeed, the
The distribution of assets in a bankruptcy estate is a federal question except to the extent that the Code specifically makes state law controlling. See City of New York v. Rassner,127 F.2d 703 (2nd Cir.1942). In this regard, “[s]tate law regulating the distribution of assets among creditors must give way to the all-encompassing federal law of creditors’ rights.” Matter of Quanta Resources Corp.,739 F.2d 912 (3rd Cir.1984); see also American Sur. Co. of New York v. Sampsell,327 U.S. 269 ,66 S.Ct. 571 ,90 L.Ed. 663 (1946) <“[W]e recently had occasion to reiterate that federal bankruptcy law, not state law, governs the distribution of a bankrupt’s assets to his creditors.”).
Id. at 577.
In this instance, Congress has adjusted creditors’ rights such that all will share equally with respect to whatever portion of the debtor’s entireties interest is not allowed as exempt pursuant to
■ The final argument to justify the creation of a separate estate is also based upon equity. However, the victim of this perceived inequity is not the joint creditor, but rather the non-debtor spouse.
Granting an individual creditor the opportunity to reap the assets of entireties property in bankruptcy diminishes the non-debtor spouse’s interest in such property since the debtor spouse would not have been able to subject the entire-ties property to the reach of individual creditors under Florida law.
In re Monzon,
The relevance of this argument is also questionable. Even if one assumes that the non-debtor spouse’s interest will be diluted if all creditors share equally with respect to the debtor’s interest, it does not follow that the non-debtor spouses’s interest is entitled to protection. Congress did not ignore the non-filing spouse when it crafted the exemption scheme set forth in
Moreover, the perceived inequity does not exist in the instant case because both
However, what was a concern in
Monzon
is not a concern in this instance because Mr. and Mrs. Raynard each seek exactly the same protection under the bankruptcy laws as the other. Both anticipate receiving a discharge of all their debts, joint and individual, and both expect the injunctive relief afforded by
D. State Exemptions.
Michigan recently adopted a new set of exemptions designed specifically for debt
(o) Property described in section 1 of1927 PA 212 ,MCL 557.151 , or real property, held jointly by a husband and wife as a tenancy by the entirety, except that this exemption does not apply with regard to a claim based on a joint debt of the husband and wife.
■This exemption is available to the Ray-nards because the Raynards filed their petition on January 13, 2005, ten days after the new legislation became effective. 25
Mioh. Comp. Laws
However, the Raynards’ concern is valid only if
IV. CONCLUSION
The Raynards’ Chapter 13 plan, as currently amended, cannot be confirmed because it unfairly discriminates in favor of their joint unsecured creditors and,to the detriment of their individual unsecured creditors. The Raynards’ justification for the discrimination they propose is based upon the false premise that the non-exempt portion of their entireties interests claimed as exempt under
July 19, 2005 is the hearing date now set for confirmation of the Raynards’ Chapter 13 plan. I am adjourning that hearing
I would also observe that there is an open question regarding the amount the Raynards must contribute to their Chapter 13 plan to account for the non-exempt portion of the entireties property claimed as exempt under
The recently enacted state bankruptcy' exemptions also permit each debtor a $30,000 exemption in their homestead. Mioh. Comp. Laws
The Honorable Robert E. Grant has offered a thoughtful analysis of the constitutional implications of “bankruptcy specific” state exemptions in
In re Cross, 255
B.R. 25 (Bankr.N.D.Ind.2000). Indiana had enacted an exemption that permitted a debt- or to exempt his or her interest in entire-ties property if the other spouse did not also file for bankruptcy relief. However, the exemption was not available if both spouses filed for relief. Judge Grant denied the Chapter 7 trustee’s constitutional challenge of this exemption based upon the trustee’s contention that it interfered with Congress’ ability to enact uniform bank
Cross
makes a compelling case for declaring
The Raynards now have until August 30, 2005 to confirm their plan. If they choose to increase their contribution to account for the non-exempt portions of their entireties interests under
Notes
. The Raynards in fact assert that the equity in their farm is $110,285 and that the equity in their residence is $17,126. However, their calculations do not take into consideration liquidation costs. The $4,126 and $86,285 equity calculations in this opinion assume liquidation expenses equal to 10% of the gross values of these properties.
. The Raynards’ Schedule C actually sets the claimed exemption in the residence at
. The Bankruptcy Code is incorporated into the United States Code as
.
Unsecured debt owed by Mrs. Raynard $16,290.00
Unsecured debt owed by Mr.
Raynard 42,368.00
Unsecured debt owed jointly by Mr. and Mrs. Raynard 29,443.00
TOTAL $88,101.00
. A debtor may amend his or her plan at any time prior to confirmation of the debtor's plan.
. "Base amount” is a term of art used in this district to denote a Chapter 13 plan arrangement whereby unsecured, non-priority creditors with allowed claims share pro rata a fixed amount of funds contributed by the debtor based upon the amount of their allowed claims.
. The Raynards indicated at the June 7, 2005 hearing that they did not rely upon this provision to discriminate between their respective joint and individual creditors because at least some of their joint obligations were related to the operation of their farming business and therefore were not consumer related.
. Specifically,
[T]he plan may—
(1) designate a class or classes of unsecured claims, as provided in section 1122 of this title, but may not discriminate unfairly against any class so designated; however, such plan may treat claims for a consumer debt of the debtor if an individual is liable on such consumer debt with the debtor differently than other unsecured claims,
Section 1122 in turn states in part that:
(a) Except as provided in subsection (b) of this section, a plan may place a claim or an interest in a particular class only if such claim or interest is substantially similar to the other claims or interests of such class.
.An "estate” is created each time a bankruptcy proceeding is commenced. 11 U.S.C. '
The bankruptcy estate is the foundation upon which the entire bankruptcy process rests. When the bankruptcy trustee acts, she acts as the representative of the bankruptcy estate, not as a representative of the debtor. For example, if the bankruptcy trustee liquidates property of the estate pursuant to
The bankruptcy estate may be a party to a contract.
See, In re Macomb Occupational Health Care, LLC,
The bankruptcy estate serves as the receptacle for all of a debtor’s interests in property as of the date of the debtor’s bankruptcy petition.
(a) ... Such estate is comprised of all of the following property, wherever located and by whomever held:
(1) Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case.
. Providing an individual debtor with a "fresh start” is a fundamental objective of the Bankruptcy Code. Congress determined in the late 1970s that the former Bankruptcy Act, which had not had any major revision since 1938, did not adequately protect consumer debtors. See, e.g., H.R.Rep. No. 95-595 at 116-118 (1977), reprinted in 1978 U.S.C.C.A.N. 5963, 6076-79. It concluded that "bankruptcy relief should be effective, and should provide the debtor with a fresh start.” 1978 U.S.C.C.A.N. at 6079.
. In a Chapter 7 proceeding, the trustee accounts for liens and other encumbrances against property in which the bankruptcy estate also has an interest as part of her duty
. The issue before me could also be framed as arising under
. Section 1306 provides that property of the estatе for purposes of a Chapter 13 includes all post-petition earnings until the case is closed, dismissed, or converted to another chapter. The Raynards’ income does not technically fall within the ambit of this provision because it derives from the operation of their farm instead of from services rendered for another. However, it is nonetheless fair to frame the issue in this’ context unless a distinction is to be drawn between wage and salary earners who want to prefer their joint creditors in a Chapter 13 proceeding and entrepreneurs who want to prefer their joint creditors in a Chapter 13 proceeding.
. The procedure set forth in
Trickett
is only a proposal. Judge Nims ended his opinion with a request for "suggestions or briefs” regarding what he had proposed.
Id.
at 90. However, this court has never in fact formally adopted the procedure Judge Nims suggested. The procedure outlined in
Trickett
has simply by default become the accepted method within this district for administering entireties property claimed as exempt under
.
Napotnik
involved
The Third Circuit rejected Mr. Napotnik’s argument that all of his interest in the entire-ties property was exempt under
.
In re Oberlies,
. Assume, for example, that Mr. and Mrs. Smith own Blackacre by the entireties and that it is not subject to any liens. Assume further that Mr. Smith, but not Mrs. Smith, files a petition for relief under Chapter 7. Finally, assume that Mr. Smith elects not to exempt Blackacre because Blackacre is contaminated. There is no question that Mr. Smith's interest in Blackacre would continue to be property of the estate under this scenario. It would be the Chapter 7 trustee’s duty to administer what had been Mr. Smith's interest in the entireties estate along with the rest of Mr. Smith's property interests that had become property of the estate.
.
In re Oberlies,
.
In re Spears,
. A "community claim” is:
[a] claim that arose before the commencement of the case concerning the debtor for which property of the kind specified insection 541(a)(2) of this title is liable, whether or not there is any such property at the time of the commencement of the case.
. The following property may be exempted under subsection (b)(1) of this section:
(1) The debtor's aggregate interest, not to exceed $18,450 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor.
* * * * * *
(5) The debtor’s aggregate interest in any property, not to exceed in value $975 plus up to $9,250 of any unused amount of the exemption provided under paragraph (1) of this subsection.
II U.S.C.
. Assume that the debtor owns Blackacre as a tenant by the entireties with his non-filing spouse but that he elects the
. My interpretation of
I am not in favor of resurrecting the
Black
order. I agree with
Trickett
that the
Black
order procedure was clumsy and unfair. Moreover, the remedy offered by the
Black
order, that being the indefinite deferral of the debtor’s discharge, runs counter to the requirement that a debtor’s discharge be granted "forthwith.”
However, as already discussed, Harris and Fetter need not concern me in this instance because both Mr. and Mrs. Raynard are seeking bankruptcy relief and, therefore, the problem of a husband and wife unfairly benefitting from the bankruptcy filing of only one spouse does not exist. I will leave it to other courts to explain why, for example, a Chapter 13 debtor should be allowed to use his disposable income to prefer joint creditors when he alone files for relief but a Chapter 13 debtor should not be allowed to offer the same preference when both his wife and he file jointly for such relief.
. A debtor in bankruptcy under the bankruptcy code, 11 USC 101 to 1330, may ex- . empt frоm property of the estate property that is exempt under federal law or, under 11 USC 522(b)(2), the following property:
* sfc sfc :H ^ H:
Mich. Comp. Laws § 600.5451(1) .
These exemptions are separate from whatever exemptions Michigan has offered and continues to offer to debtors whose property is subject to execution by a judgment creditor. See,Mich. Comp. Laws § 600.6023 .
. The Raynards did not specifically claim this exemption although it clearly was available to them under
.A joint petition protects a husband and wife from joint creditors proceeding against them personally because both spouses will presumably receive a discharge of all of their obligations, including their joint obligations, upon completion of their plan.
. The alternative interpretation of
. Generally, the unconstitutionality of one provision of a statute does not also render the remaining provisions of the statute invalid unless the remaining provisions are so related to the unconstitutional provision that the intent of the legislation would be thwarted were the remaining provisions to stand.
Baldwin v. North Shore Estates Assn.,
.
. A debtor claims his exemptions by listing the same in Schedule C to the schedules he is required to file in connection with his bankruptcy proceeding.