Affirmed by published opinion. Judge MICHAEL wrote the opinion, in which Judge WILLIAMS and Judge KING joined.
OPINION
Quy Van Nguyen, a Chapter 7 debtor domiciled in the Commonwealth of Virginia, was required to adhere to Virginia’s bankruptcy exemption scheme. The trustee in the bankruptcy proceeding objected, on grounds of untimeliness, to Nguyen’s claim for a homestead exemption. The bankruptcy court denied the objection, and the district court affirmed. We also affirm, holding (1) that Virginia law, not the Federal Rules of Bankruptcy Procedure, controls the computation of the time allowed a Virginia debtor to claim a homestead exemption and (2) that under Virginia law a debtor has “set apart” property claimed as exempt once he has delivered a properly executed homestead deed, with fees paid, to the appropriate clerk.
I.
The facts are undisputed. Quy Van Nguyen filed for Chapter 7 bankruptcy in the Eastern District of Virginia on August 29, 1997. In his Schedule C, Nguyen claimed the following property as exempt from the bankruptcy estate: his clothing valued at $500, his watch at $20, and his 1992 Acura automobile at $6,000. The first meeting of creditors was held on the date initially set, October 1, 1997. During the meeting the trustee reviewed Nguyen’s petition and schedules, including his Schedule C. That same day (October 1, 1997) Nguyen took steps to perfect his exemption on the automobile by executing a homestead deed and mailing it with a check for recording fees to the Clerk of the Fairfax County, Virginia, Circuit Court by certified mail, return receipt requested. Although the deed was received by the clerk on Friday, October 3, 1997, it was not date-stamped as admitted to record until Tuesday, October 7, 1997. The trustee objected to the homestead exemption, arguing that the failure to admit the deed to record within five days of the date initially set for the first meeting of creditors made the exemption claim untimely
Upon the filing of a petition for bankruptcy, all of the debtor’s legal and equitable interests in property become part of the bankruptcy estate.
See
11 U.S.C. § 541. The debtor may, however, claim certain real and personal property as exempt from the estate.
See id.
§ 522(b). If a state chooses to opt out of the federal exemption scheme detailed in 11 U.S.C. § 522(d), “any property that is exempt under ... State or local law” is excluded from the estate.
Id.
§ 522(b)(2)(A).
See also Zimmerman v. Morgan,
We are presented with two issues in this appeal. First, we decide whether Virginia law or the Bankruptcy Rules should govern the computation of the five-day period allowed in Va.Code Ann. § 34-17 for setting apart exempt property in bankruptcy. We conclude that Virginia law governs for reasons we explain later. Second, we decide what a debtor must do to “set apart” property claimed under the homestead exemption allowed by Va.Code Ann. § 34-14. The trustee has maintained throughout (1) that property is not set apart until the writing that describes the property (the homestead deed) has been admitted to record and (2) that the deed is not admitted to record until the clerk has determined that all prerequisites have been satisfied and he has stamped on the deed itself the date and time of his decision to admit the document to record. Under this argument Nguyen’s interest in $4,000 of his automobile was not set apart until October 7, 1997, and his homestead exemption would be untimely. After conducting a thorough review of the Virginia cases concerning the recording of deeds, the bankruptcy court disagreed with the second half of the trustee’s argument. It held that “if no deficiencies exist as to a deed’s form or in the fees tendered, a homestead deed is admitted to record when properly received by the clerk’s office.”
In re Nguyen,
II.
The computation of time issue is first. Because Virginia law includes Saturday and Sunday in the five-day count, see Va.Code Ann. §§ 1-13.3, 1-13.3.T, the trustee argues that Nguyen set apart the property claimed as exempt one day too late. The trustee concedes, however, that if the Federal Bankruptcy Rules, rather than Virginia law, determine the computation of the five days, Nguyen’s exemption was timely claimed. See Fed. R. Bankr.P. 9006(a) (excluding Saturdays, Sundays, and legal holidays from computation of time when period prescribed or allowed is shorter than eight days). Thus, the threshold question is one of choice of law. Normally, of course, the federal courts apply federal procedural law whether they are deciding state or federal questions. That has not always been the case. From 1789 until 1938 federal courts in actions at law applied the procedural rules of the states where they were seated. See Process Act of 1789, c. 21, § 2, 1 Stat. 93 (Sept. 29, 1789); Act Aug. 23, 1842, c. 188, § 6, 5 Stat. 516, 518; Act June 1, 1872, c. 255, § 5, 17 Stat. 197; 4 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1002 (2d ed.1987). 3 Not until the adoption of the Federal Rules of Civil Procedure in 1938 was the federal practice of conformity with relevant state procedure replaced by a system of uniform federal procedure. Still, in the few instances where it sees fit, Congress may bypass the federal rules and require the federal courts to apply state procedure. See, e.g., Fed.R.Evid. 601 (competence of witnesses in certain civil proceedings determined by state law). As we will explain, Congress has opted for conformity with state procedure when bankruptcy exemptions are claimed under state law. ■The Virginia rule for computing túne therefore governs.
By its own terms Bankruptcy Rule 9006 determines the computation of “any period of time prescribed by ... any applicable statute.” Fed. R. Bankr.P. 9006(a). In addition, Rule-1001 states that the Bankruptcy Rules “govern procedure in cases under Title 11 of the United States Code.” Fed. R. Bankr.P. 1001. Standing alone, this language would seem to resolve the controversy. However, Section 522(b) of the Bankruptcy Code permits a state to opt out of the federal scheme of exemptions provided in section 522(d), in which case the exemptions available to a debtor are specified by state law. The longstanding consensus in this circuit is that when Congress allowed the states to specify bankruptcy exemptions, it permitted the states to determine both the substance of those exemptions and the procedure by which they are claimed.
See, e.g., Morgan
The “manner prescribed” for claiming a homestead exemption is set out in Va.Code Ann. §§ 34-6, 34-14, 34-17. These sections establish the time allowed for setting apart the property, the place where the debtor must file the writing describing the property, and the form and content of that writing.
Morgan
makes clear that a debtor must satisfy these state procedural requirements in order to perfect a homestead exemption in bankruptcy. In other words,
Morgan
establishes that when a state opts out of the federal exemption scheme, the debtor’s right to an exemption is subject to state rules of procedure.
See Morgan,
We therefore look to Virginia law to decide how to count the days in applying the term “set ... apart
on or before the fifth day
” in Va.Code Ann. § 34-17. The answer is clear. Virginia law provides that in computing a prescribed period of five days, intervening Saturdays, Sundays, and legal holidays are included.
See
Va.Code Ann. §§ 1-13.3, 1-13.3:1;
In re Bernstein,
III.
As we have already said, a debtor must set apart any property claimed under the homestead exemption no later than the fifth day after the date initially set for the creditors meeting required by § 341 of the Bankruptcy Code. See Va.Code Ann. § 34-17. In addition to establishing this time limit for setting apart personal property claimed as exempt, Virginia law also provides the process for claiming the exemption. The personal property selected for exemption by the debtor
shall be set apart in a writing signed by him. He shall, in the writing, designate and describe with reasonable certainty the personal estate so selected and set apart each parcel or article, affixing to each his cash valuation thereof. Such writing shall be admitted to record, to be recorded as deeds are recorded in the county or city wherein such [debtor] resides.
Va.Code Ann. § 34-14. (The writing is usually called a homestead deed. See id.) The trustee argues (1) that property claimed under a homestead deed is not “set apart” until it has been admitted to record and (2) that such a deed is not admitted to record until the clerk has actually time- and date-stamped it. Because Nguyen’s homestead deed was not clocked in until October 7, 1997, the trustee maintains that Nguyen failed to set apart his Acura within five days of the October 1 creditors meeting. Nguyen counters that his automobile was set apart when he did all that was required of him before the statutory time expired and that he should not be forced to bear the consequences of the clerk’s delay in recording the deed. We agree with Nguyen. As we will spell out, his automobile was set apart under §§ 34-14 and 34-17 when the clerk received the homestead deed in proper form with fees paid on October 3, 1997, well before the fifth day after the creditors meeting. The exemption was therefore claimed in a timely manner.
Generally, statutes creating debtors’ exemptions must be construed liberally in favor of the debtor and the exemption.
See Shirkey v. Leake,
In reading §§ 34-14 and 34-17 of the Virginia Code, we cannot agree with the trustee’s contention that property claimed as exempt is not “set apart” until the deed has actually been admitted to record. Section 34-17 says nothing about admission to record. Instead, it requires the debtor to “set apart” his property no later than the fifth day after the date initially set for the § 341 creditors meeting. See Va.Code Ann. § 34-17. Although neither the statute nor Virginia case law provides any direct guidance on the meaning of “set apart,” we find some direction in the language of § 34-14. That section, captioned “How set apart in personal estate; form to claim exemption of personal property,” requires that the property claimed as exempt “be set apart in a writing signed by [the debtor].” Va.Code Ann. § 34-14. After prescribing the form and content of the writing, § 34-14 states that it “shall be admitted to record, to be recorded as deeds are recorded.” Thus, § 34-14 imposes two distinct requirements: (1) the debtor must describe the property in a particular writing and (2) the writing must be admitted to record.
Because § 34-14 uses the passive voice (“shall be admitted to record”), it does not say who ultimately bears the obligation to see that the homestead deed is in fact admitted to record. The trustee has argued that this obligation falls exclusively on the debtor. We disagree. Of course, the deed cannot be admitted to record, and the statute cannot be complied with, unless the debtor files the deed in the proper form with the proper clerk. Once the debtor has done that, however, the duty to “admit[] [the writing] to record, to be recorded as deeds are recorded” is exclu
The words in [the 1819 act regulating conveyances], “and recorded according to the directions of this act,” ... impose[ ] no farther duty on the vendee in order to protect and secure his title. Nor would that construction be tolerated, which would make it depend on the acts or omissions of the clerk over whom he has no control, and with whom the law compels him to deposit his deed. A different construction would be attended with great mischief. The act having prescribed no time to the clerk to record a deed by spreading it on the record, its validity would be fluctuating and uncertain, and the object of the act defeated.
Beverley v. Ellis,
Identical concerns are present in this case, where Nguyen filed his homestead deed with the proper clerk three days before the statutory deadline. Because the homestead exemption statute also “prescribes no time to the clerk to record a deed,” allowing the validity of the exemption to depend on the diligence and speed of the clerk would impose unfair burdens on debtors. Indeed, it would undermine the homestead exemption’s beneficent goal of insuring “an unfortunate debtor and his equally unfortunate, but more helpless, family a means of shelter and a measure of existence.”
Goldburg Co. v. Salyer,
In construing § 34-14, we are especially mindful that the purposes of the recording requirement for homestead exemptions are quite different from the purposes of recording requirements in conveyancing.
4
The significance of the recording requirement for homestead deeds rests not on concerns about notice or priority of interest, but rather on the fact that the homestead exemption has a lifetime aggregate limit of $5,000.
See
Va.Code Ann. § 34-21. The recording requirement gives creditors a simple means of determining whether the limit has been exceeded.
See, e.g., In re Emerson,
Of course, the delay or omissions of the clerk may not be attributed to the trustee, who is as blameless as the debtor. In this case, however, the trustee had actual notice of the debtor’s intent to claim a homestead exemption, and the debtor filed his homestead deed within the time allowed by § 34-17. Under such circumstances, imputing the clerk’s recording delay to the debtor imposes an arbitrary forfeiture on the debtor and grants a windfall to the trustee. There is no indication that the Virginia General Assembly intended such an inequitable result. In light of the remedial purposes of the homestead exemption and the rule that the exemption statutes should be construed liberally in favor of the debtor, we do not interpret §§ 34-14 and 34-17 to require that a homestead deed be actually admitted to record before the exemption may be claimed in bankruptcy. Thus, when a debtor has filed a homestead deed in proper form with the right clerk, with fees paid, all prior to the deadline established by § 34-17, the debt- or has “set apart” his property for purposes of §§ 34-14 and 34-17. In this case, Nguyen did all of this, and the bankruptcy and district courts were correct in allowing his homestead exemption.
The district court’s order is
AFFIRMED.
Notes
. Virginia’s opt-out provision reads:
No individual may exempt from the property of the estate in any bankruptcy proceeding the property specified in subsection (d) of the Bankruptcy Reform Act (Public Law 95-598) except as may otherwise be expressly permitted under this title.
Va.Code Ann. § 34-3.1.
. For purposes of this appeal we assume, but do not decide, that Nguyen's homestead deed was not "admitted to record" until the clerk time- and date-stamped the deed. We express no opinion as to what conditions must be satisfied before a deed should be deemed admitted to record under Virginia law.
. Uniform rules of procedure for federal equity cases were not promulgated until 1822. See Process Act of 1792, c. 36, § 2, 1 Stat. 275, 276 (May 8, 1792); 4 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1002 (2d ed.1987).
. We note that an entirely different provision, Va.Code Ann. § 55-96, governs the recording of instruments that convey an interest in real property. The language of that provision differs significantly from the language of § 34-14. Section 55-96 states that any deed or contract conveying real property “shall be void as to all purchasers for valuable consideration without notice not parties thereto and lien creditors, until and except from the time it is duly admitted to record.” Va.Code Ann. § 55-96.