Nell Cady
Before the Court is the Objection to Exemptions filed by Paul A. Schofield, the Chapter 7 Trustee. (Dckt. 23). The Debtor, Nell Cady, owns a 2020 BMW X2, which she values at $19,573.00. She has claimed three exemptions in the vehicle
By separate motion, the Trustee, exercising his authority under
I. Jurisdiction
This Court has subject matter jurisdiction pursuant to
II. Findings of Fact
The facts in this case are undisputed. The Debtor filed a Chapter 7 petition on December 3, 2024. (Dckt. 1). In her Schedule I, the Debtor disclosed that she is a real estate agent employed by Six Bricks Realty in Savannah, Georgia. (Dckt. 1, p. 40, ¶ 1). She reported her combined monthly income at $4,354.00 and stated that her “future income will fluctuate with market conditions[.]” (Dckt. 1, p. 41, ¶¶ 12-13). According to her schedules, her assets total $23,146.14, she has a single secured debt in the amount of $355.80, and her unsecured debts total $899,677.56, comprising $16,139.71 in priority unsecured debt and $883,537.85 in general unsecured debt. (Dckt. 1, p. 15, ¶ 63; dckt. 1, p. 18; ¶ 2.1; dckt. 1, p. 37, ¶ 6). The claims register reflects $22,943.27 in unsecured claims.
In her Schedule A/B, the Debtor listed as her primary asset a 2020 BMW X2, which she valued at $19,573.00. (Dckt. 1, p. 10, ¶ 3.1). She added a notation that the vehicle was “paid for by a family member.” (Dckt. 1, p. 10, ¶ 3.1). Per her Schedule D, the vehicle is unencumbered by any liens. (Dckt. 1, p. 18). In Schedule C, she claimed $17,017.00 in her equity in the BMW as exempt under three separate
On March 3, 2025, the Chapter 7 Trustee notified the Court of possible assets to be recovered and liquidated for the benefit of unsecured creditors. (Dckt. 18). The next day, at the Trustee‘s request, the Clerk set a June 4, 2025 deadline for filing proofs of claims. (Dckt. 19). Two weeks later, on March 18, 2025, the Debtor received her discharge. (Dckt. 21).
On April 2, 2025, the Chapter 7 Trustee objected to the Debtor‘s claimed exemptions. (Dckt. 23). The Trustee challenges neither the Debtor‘s
On April 11, 2025, the Debtor responded to the Trustee‘s objection. (Dckt. 26). In her response, she argues that traveling to different properties is the essence of her work as a realtor because she “is in the business of selling houses [that] are affixed to real property and therefore by necessity she must take prospective clients to the houses in her vehicle.” (Dckt. 26, p. 2, ¶ 7). The Debtor also notes that she has two nondischargeable priority debts, one to her ex-husband in the amount of $29,000.00 and the other to the Georgia Department of Revenue in the amount of $9,461.92.2 (Dckt. 26, pp. 1-2, ¶¶ 3-5). She claims that she “already has or intends to establish repayment plans” with both of those creditors. (Dckt. 26, p. 3, ¶ 10). In her view, her fresh start would be impaired if the Court were to allow the Trustee to sell her BMW and distribute nonexempt proceeds to creditors “who will otherwise allow her to pay the same debt over an extended period of time.” (Dckt. 26, pp. 3-4, ¶ 10).
When asked how many times she visited the five properties sold in 2024, the Debtor answered “[u]nbelievable amounts” and noted that she made “several trips[.]” (Tr., p. 11). She testified that she uses her vehicle for tasks such as “showing the house, doing the inspection, opening for the appraiser, doing the walkthrough[,]
At the hearing, the Trustee disputed the Debtor‘s $19,573.00 valuation of the BMW, alleging that it is actually worth $28,648.00, but that dispute is not currently before the Court. (Tr., pp. 4, 21-22). Regardless of how the Court rules on this matter, the Trustee intends to sell the vehicle and distribute the proceeds to unsecured creditors. (Tr. p. 21). At stake in this dispute, then, is how much the Debtor would receive—the amount of her exempt equity in the vehicle—from the sales proceeds.5 At the conclusion of the hearing, the Court took the matter under advisement. (Tr., p. 21).
Three days after the hearing, on April 18, 2025, the Trustee moved for turnover of certain assets, including the BMW.6 (Dckt. 28). In that motion, the Trustee asserts that the BMW is worth $28,648.00, and thus “there exists at least
III. Conclusions of Law
This case requires the Court to determine whether a Georgia debtor may exempt a motor vehicle as a tool of the trade under
Other courts, however, hold that a motor vehicle can be a tool of the trade—at least in some circumstances. In Schneider v. Fidelity Nat‘l Bank (In re Schneider), 37 B.R. 747 (Bankr. N.D. Ga. 1984) (Norton, J.), for example, the court rejected Curry‘s focus on “the intention of the legislators” and instead purported to pay “more attention to a literal reading of the statute[.]”8 Id. at 750. Under its reading, the court allowed a traveling salesman to exempt his 1979 Peugeot because travel was the essence of his occupation. Schneider, 37 B.R. at 751. See also Mitchell v. First Franklin Fin. Corp. (In re Mitchell), No. 17–68428–PMB, 2018 WL 1442256, at *2 (Bankr. N.D. Ga. March 21, 2018) (Baisier, J.); South Atl. Prod. Credit Assoc. v. Jones (In re Jones), 87 B.R. 738, 742 (Bankr. M.D. Ga. 1988) (Laney, J.).9
Notably, these courts do not hold that motor vehicles are always exemptible as tools of the trade. In their view, “it is insufficient to show that the vehicle is essential for traveling to work, even if the motor vehicle is the debtor‘s sole means of commuting.” Mitchell, 2018 WL 1442256, at *2. “Rather, a vehicle is properly classified as a tool of trade where the debtor can show that her occupation . . . is
Here, the Debtor testified at length about the necessity of driving to and from houses, and the Court accepts her argument that her occupation as a real estate agent is uniquely dependent on her use of a motor vehicle. Thus, if the Court finds that Georgia law ever allows debtor to exempt a motor vehicle as a tool of the trade, then the Court would have no trouble permitting this Debtor to do so. The question is whether Georgia law so allows. The Court, therefore, must decide whether to follow Curry (forbidding the exemption) or Schneider (permitting it in some circumstances). And that decision requires the Court to explore the statutory text and history of Georgia‘s tools-of-the-trade exemption.
A. Bankruptcy Exemptions Protect a Debtor‘s Fresh Start
“One of the ‘main purpose[s]’ of the federal bankruptcy system is ‘to aid the unfortunate debtor by giving him a fresh start in life[‘]” Lamar, Archer & Cofrin, LLP v. Appling, 584 U.S. 709, 715 (2018) (quoting Stellwagen v. Clum, 245 U.S. 605, 617 (1918)). To that end, the Bankruptcy Code permits a debtor to exempt
For that reason, courts construe exemptions liberally in favor of debtors. McFarland v. Wallace (In re McFarland), 790 F.3d 1182, 1186 (11th Cir. 2015). The Bankruptcy Code makes a debtor‘s claimed exemptions presumptively valid unless a party in interest objects.
Section 522(b)(1) of the Bankruptcy Code provides that “an individual debtor may exempt from property of the estate the property listed in”
B. A Georgia Debtor May Exempt Tools of the Trade under O.C.G.A. § 44-13-100(a)(7)
Georgia‘s exemption statute allows three exemptions pertinent to this case. First, and least important, the wildcard exemption allows a debtor to exempt her “aggregate interest, not to exceed $1,200.00 in value plus any unused amount of the [homestead] exemption, not to exceed $10,000.00, . . . in any property[.]”
The term “tools of the trade” is nowhere defined in the Georgia exemption statute. Mitchell, 2018 WL 1442256, at *2 (“In drafting § 44–13–100, the Georgia legislature failed to define the phrase ‘tools of the trade.‘“). “As a result, it has been left to the courts to construe the phrase ‘tools of the trade’ and to define its outer boundaries.” Id.
To determine the meaning of “tools of the trade,” the Court begins, as it must, with the statutory text. Bartenwerfer v. Buckley, 598 U.S. 69, 74 (2023) (“[W]e start where we always do: with the text of the statute.“). When terms in a statute are undefined, they must be given their ordinary meaning. Lamar, Archer & Cofrin, 584 U.S. at 715. Here, the ordinary meaning of the terms “tool” and “trade” are not especially helpful.11 Merriam-Webster defines “tool” as, among other things, “a handheld device that aids in accomplishing a task” or “something (such as an instrument or apparatus) used in performing an operation or necessary in the practice
So too for the word “trade,” which can be either “an occupation requiring manual or mechanical skill” or “the business or work in which one engages regularly[.]” Id.12 A realtor would arguably fall outside the former definition but within the latter. As with “tool,” then, to privilege one definition over the other would be to decide this case‘s outcome arbitrarily. The Court is mindful that “common words typically have more than one meaning,” so courts “must use the context in which a given word appears to determine its . . . most likely sense.” Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 418 (2012).
Other principles of statutory interpretation provide some help in interpreting the phrase. For example, under the associated-words canon (also referred to by the Latin phrase noscitur a sociis—“it is known by its associates“), “words grouped in a list should be given related meanings.” Id. at 195. Here, the
Likewise, under the whole-text canon, “the judicial interpreter [must] consider the entire text, in view of its structure and of the physical and logical relation of its many parts.” Reading Law at 167. In other words, “[t]he entirety” of a statute “provides the context for each of its parts.” Id. And under the presumption of consistent usage, “a material variation in terms suggests a variation in meaning.” Id. at 170. Applying these principles here, the Court finds it noteworthy that the Georgia exemption statute has separate exemptions for motor vehicles (
C. O.C.G.A. § 44-13-100(a)(7) is Modeled on 11 U.S.C. § 522(d)(6)
The first salient fact about
What‘s more, the same language appears a second time in § 522. Under
The Supreme Court has never interpreted the meaning of “tools of the trade” under either
On appeal, the Seventh Circuit, in a decision authored by Judge Posner, found that neither the tractor nor the cows were tools of the trade, and the court‘s reasoning is instructive. Rejecting the debtors’ argument that tractors and cows are “instrumentalities for turning raw materials . . . into salable products,” the court observed that “a businessman‘s secretary is by the same token a tool of the trade,”
Moreover, the court found it significant that the federal exemption made “explicit mention of so petty an item as ‘professional books,’ which rarely (though sometimes) will have a substantial value[.]” Id. And, when Patterson was decided, the
[I]f, for example, a printing proprietorship goes bankrupt, what sense would it make to allow the owner to exempt $750 from the auction of a million dollar printing press? The purpose of the tools of the trade exemption is to enable an artisan to retain tools of modest value so that he is not forced out of his trade. Although as a matter of semantics farm “implements” could be thought to cover machinery and vehicles as well as hand tools, this would be an incongruous interpretation. There would be no point in allowing a debtor to exempt $750 worth of equipment that might have a market value of many thousands of dollars. He would have to sell it anyway, and probably he could not replace it; certainly he could not continue to use it in his trade.
But the “strongest evidence,” the court found, was the history of the federal tools-of-the-trade exemption. As the court explained, “[s]tates have long granted an exemption for tools or implements of the trade, and in interpreting these exemptions state courts have generally distinguished between personal hand tools of modest value, on the one hand, and machinery on the other.” Id. at 1146-47. And, the court added, “[t]here is no indication that Congress, by taking over a familiar term from state law as the basis for a modest federal exemption that would be an alternative to the state exemptions . . . meant to expand it.” Id. at 1147. After all, “[i]f Congress had . . . such an intention, it probably would not have imposed a $750 ceiling—for what, to repeat, could be the purpose of allowing a farmer to exempt a tiny fraction of the value of a piece of heavy farm machinery or of a herd of cattle?” Id. “Few farmers [would] be able to use the wild-card exemption to jack this figure up.” Id.
In view of this history, alongside the statutory text, the court held that neither the debtors’ tractor nor their cows were tools of the trade for purposes of
To regard cows and other livestock as “tools” or “implements” does particular violence to the English language, and there is no indication that the terms are being used in a technical sense. There would be no semantic violence in regarding the [debtors‘] tractor as a tool of the farming trade . . . but, while the question is a close one, we think the tractor is no more a tool of the trade in the statutory sense than the cow is. The tractor is not a modest implement but an expensive piece of machinery. It is one of the principal capital assets of a small farm. To exempt it would be like exempting the airplanes owned by an air charter service. This can‘t have been what Congress had in mind in allowing an exemption limited to $750. The relevant tools of the trade are the rakes and other hand tools that [one joint debtor] continues to own, and to use as a dairy hand following the bankruptcy.
Id. Because the debtors could not claim the tools-of-the-trade exemption, the court found that the bankruptcy court should have denied their motion to avoid the bank‘s lien, and it remanded the case for further proceedings. Id. at 1148.
Patterson, of course, is not binding on this Court, for three reasons. First, Patterson arose in a different jurisdiction—the Seventh Circuit is not the Eleventh Circuit. Indeed, many bankruptcy courts outside the Seventh Circuit permit debtors to exempt motor vehicles as tools of the trade.15 Second, the court in Patterson was
D. Under Georgia‘s Early Exemption Statutes, Tools of the Trade were Limited to Small, Handheld Instruments
The modern Georgia exemption for “implements, professional books, or tools of the trade” has antecedents dating at least as far back as 1822. In that year, the General Assembly passed an act “[t]o exempt from sale for debts contracted after a given time, certain articles chiefly necessary for the subsistence of the [debtor‘s] family,” proclaiming in the prefatory clause that “it does not comport with justice or expediency to deprive innocent and helpless women and children of the means of subsistence.”16 The act permitted a debtor to exempt the following items: “[t]wo beds and bedding, common bedsteads, a spinning wheel and two pair of cards, a loom, and cow and calf, common tools of his trade and ordinary cooking utensils, and ten dollars[‘] worth of provisions.”17
The word tool is defined to be some simple instrument used by the hand, and the object of the Legislature obviously was, to exempt articles of small value and of frequent and daily use by a poor mechanic, upon whose manual occupation of these tools his family depended for a subsistence. It was never intended that the debtor should be protected in carrying on an extensive trade with a large capital, even in tools, while his creditor was suffering for the money justly due him.
What [are] the other articles protected by the Act? Two beds and bedding, common bedsteads, a spinning wheel and two pair of cards, a loom and a cow and calf, common tools of his trade and ordinary cooking utensils. Did the Legislature intend to depart so far from the strict and appropriate meaning of the term []“common tools,” as to extend it to all the utensils of a distillery, the looms,
spindles, &c. of a cotton or woollen factory, the forges and other instruments of a manufactory of iron, and other complicated and expensive machinery, costing thousands of dollars? No such construction can be adopted without doing violence to the meaning of the Act.
Lenoir, 20 Ga. at 597. The court was thus “entirely satisfied that a lawyer‘s library” did not fall within the meaning of “common tools of trade, within the true intent of the [1822] Act.” Id.
Georgia codified its tools-of-the-trade exemption in 1860. On December 9, 1858, the General Assembly provided for the election of three commissioners “to prepare for the people of Georgia a Code, which should, as near as practicable, embrace in a condensed form the laws of Georgia, whether derived from the common law, the Constitution, the statutes of the state, the decisions of the Supreme Court, or the statutes of England, of force in this state.” Wilensky v. Central of Ga. Ry. Co., 136 Ga. 889, 72 S.E. 418, 419 (1911).18 The resulting Code, prepared by Richard H. Clark, Thomas R.R. Cobb, and David Irwin, was adopted by the General Assembly in 1860 and went into effect in 1863. Id.19 Its exemption statute provided as follows:
The following property of every debtor, who is the head of a family, shall be exempt from levy and sale by virtue of any process whatever, under the laws of this State; nor shall any valid lien be created thereon, except in the manner hereinafter pointed out, but shall remain for the use and benefit of the family of the debtor: 1. Fifty acres of land, and five additional acres for each of his or her children under the age of sixteen years. This land shall include the dwelling-house, if the value of such house and improvements does not exceed the sum of two hundred dollars; Provided, that none of the above land be within the limits of a city, town, or village, and does not include any cotton or wool factory, saw or grist mill, or any other machinery propelled by water or steam, the value of which exceeds the sum of two hundred dollars; And provided, also, that such land shall not derive its chief value from other cause than its adaptation to agricultural purposes; or, in [lieu] of the above land, real estate in a city, town, or village, not exceeding five hundred dollars in value.
2. One farm horse or mule.
3. One cow and calf.
4. Ten head of hogs and fifty dollars’ worth of provisions, and five dollars’ worth additional for each child.
5. Beds, bedding, and common bedsteads sufficient for the family.
6. One loom, one spinning-wheel, and two pairs of cards, and one hundred pounds of lint cotton.
7. Common tools of trade of himself and his wife.
8. Equipment and arms of a militia soldier, and trooper‘s horse.
9. Ordinary cooking utensils and table crockery. 10. Wearing apparel of himself and family.
11. Family Bible, religious works, and school books.
12. Family portraits.
13. The library of a professional man, in actual practice or business, not exceeding three hundred dollars in value, and to be selected by himself.20
The Code of the State of Georgia, Part II (“The Civil Code“), Title 3 (“Of Relations Arising from Other Contracts“), Chapter 2 (“Of Debtor and Creditor“), Article 4 (“Insolvent Debtors“), Section III (“Property Exempt from Sale“), § 2013 (emphasis added).21 The seventh listed exemption permitted an insolvent debtor to exempt from levy and sale any “common tools of trade of himself and his wife.”
In Kirksey v. Rowe, 114 Ga. 893, 40 S.E. 990 (1902), the Supreme Court of Georgia was again called upon to interpret the meaning of the tools-of-the-trade exemption. At that time, the exemption was codified at § 2866 of the revised Code adopted December 15, 1895, but its language was identical to that in the 1860 Code.22 In Kirksey, the debtor sought to exempt a horse not used on a farm, a half-interest in a two-horse wagon, and a “set of harness.” Id. at 990. The superior court denied all three exemptions. On appeal, the Supreme Court of Georgia affirmed in part and reversed in part. The court reversed as to the horse—permitting the exemption23—but affirmed as to the half-interest in the two-horse wagon24 and as to the harness.
In Burt v. Stocks Coal Co., 119 Ga. 629, 46 S.E. 828 (1904), the Supreme Court of Georgia for the third time addressed the tools-of-the-trade exemption. There, the debtor, a dentist, sought to exempt his dentist‘s chair. The superior court denied the exemption, and the Supreme Court affirmed, citing Lenoir and Kirksey for the proposition that the exemption for common tools of trade “has uniformly been construed to refer, not to tools in common use by the debtor, regardless of their
In 1933, Georgia adopted a new code, The Code of Georgia of 1933, which largely replicated the exemptions established in 1860, with three notable changes having been made in the interim. First, by 1933 a debtor‘s total exemptions were capped at $1,600.00 in value.25 Second, by 1933 a debtor could exempt “[f]ifty bushels of corn, 1,000 pounds of fodder, one one-horse wagon, one table and a set of chairs sufficient for the use of the family, and household and kitchen furniture not to exceed $150 in value.”26 Third, a debtor could exempt “[o]ne family sewing machine; this exemption to exist whether [the] person owning said machine is the head of a family or not, and to be good against all debts except for the purchase money.”27 The exemption for a debtor‘s “common tools of trade of himself and wife” remained unchanged.28
E. The General Assembly Did Not Materially Change the Meaning of the Tools-of-the-Trade Exemption when it Enacted the Modern Georgia Exemption Statute
What lessons can be drawn from this statutory history? Most obviously, Lenoir, Kirksey, and Burt all stand for the proposition that a “common tool of the trade,” for purposes of the early Georgia exemption statutes, had to be a small, handheld instrument—or, at least, a “simple and inexpensive appliance,” as Burt put it. Taken at face value, then, those three Supreme Court of Georgia decisions suggest that, at least under the old exemption statutes, motor vehicles would not have been considered tools of the trade because they were not small, handheld, simple, or inexpensive.
But perhaps those cases shouldn‘t be taken at face value. It is a striking fact that the early exemption statutes surveyed here for the most part lacked dollar limits.
That caveat aside, a question arises as to whether the cases Lenoir, Kirksey, and Burt remain good—indeed, binding—law in Georgia. When the General Assembly enacted the modern exemption scheme in 1980, did it intend to ratify the Supreme Court of Georgia‘s definition of “common tools of the trade” set forth in those cases? Under the prior-construction canon, “[i]f a statute uses words or phrases that have already received authoritative construction by the jurisdiction‘s court of last resort . . . they are to be understood according to that construction.” Reading Law at 322. See also Lamar, Archer & Cofrin, 584 U.S. at 721-22 (quoting Bragdon v. Abbott, 524 U.S. 624, 645 (1998)) (“When . . . judicial interpretations have settled the meaning of an existing statutory provision, repetition of the same language in a
Here, where the early exemption statutes allowed a debtor to exempt “common tools of trade of himself and his wife,” the modern statute uses the phrase “tools of the trade of the debtor[.]” Thus, the General Assembly deleted the adjective “common,” added the article “the” before “trade,” and dropped the gendered language “of himself and his wife.” The Court finds these changes merely cosmetic, not substantive. In this respect the Court disagrees with the decision South Atl. Prod. Credit Assoc. v. Jones (In re Jones), 87 B.R. 738 (Bankr. M.D. Ga. 1988) (Laney, J.). There, Judge Laney cited Kirksey and Burt but made much of the fact that the word “common” was deleted:
. . . Burt is the most recent case on the meaning of “tools of the trade” from the Georgia state courts, and it was decided in 1904. The current Georgia statute does not contain the modifier “common” before “tools of the trade.” Therefore, these cases are not necessarily indicative of the meaning of the current statute and no reported Georgia case has discussed the meaning of “tools of the trade” in said statute.
Id. at 742. Respectfully, the Court fails to see how the deletion of the word “common“—meaning “of or relating to a community at large“—materially changes the meaning of the phrase “tools of the trade.” MERRIAM-WEBSTER DICTIONARY (online ed. 2025).
To be sure, the Court does not hold that the modern tools-of-the-trade exemption is limited to those items that would have been exemptible in, say, 1904, when Burt was decided. In that respect, the Court agrees with Judge Norton‘s analysis in Schneider:
Within recent time no Georgia state court has interpreted “tool of the trade” in the exemption section. Many of the Georgia decisions were rendered prior to the more modern mechanical or technological age we now live in. We must recognize that trades and uses of implements may change and evolve, and prior definitions and concepts must be revised to be consistent with technological or trade changes and uses.
Schneider, 37 B.R. at 750-51. In other words, the exemption‘s scope can change with the passage of time and the advent of new technologies. No doubt many skilled workers today use tools undreamt of by legislators a century or more ago. We no
But it does not follow that a motor vehicle is a tool of the trade. Without attempting to define the precise contours of the tools-of-the-trade exemption, the Court finds that Lenoir, Kirksey, and Burt preclude a debtor from exempting a motor vehicle as a tool of the trade under
[I]n Georgia a tool of the trade is an implement used by a person in that person‘s work. Tools of the trade may be far more sophisticated today than they were when the Supreme Court of Georgia considered the question, but the term still contemplates that the person uses the tool with his hands, and that the person‘s work requires some degree of manual skill.
Curry, 18 B.R. at 359. This interpretation is only bolstered by the statute‘s grouping of tools of the trade with implements and professional books, by the separate motor vehicle exemption, and by the relatively low dollar amount of the tools-of-the-trade exemption. Bringing together these disparate threads, the Court finds that the Debtor
IV. Conclusion
As mentioned, the Court fully accepts the Debtor‘s testimony that she cannot perform her job as a realtor without using a motor vehicle. If the Georgia exemption statute allowed a debtor to exempt a motor vehicle as a tool of the trade, then the Court would permit her to claim that exemption in this case. But the statute does not so allow. Consistent with this Opinion, the Court will, by separate order, sustain the Chapter 7 Trustee‘s Objection to Exemptions. (Dekt. 23).
Dated at Savannah, Georgia, this 4th day of June, 2025.
Edward J. Coleman, III, Judge
United States Bankruptcy Court
Southern District of Georgia