5205 - Can sweep computers in under A5 - Law books- tools of trade section but needs to be below $3K - Moped/ mGA - 5205 5 i- insurance ** most important exemption is alternative cash exemptionmost dont have stuff or houses but can use the cash exemption to survive the bankruptcy 4.2 in all states life insurance policies are exempt! Can hide your money there 4.3- Lin tran - forget about equity b/c downpayment doesnt matterlook at what property is worth - judgment creditor- placed 2nd lien for 25K - how much will judgemtn creditor get? - if she voluntarily sells it and real estate guy charged 6% then secured creditor would get 135K and the debtor would get the next 30K ( 165K) which would leave over 4 or 5K for unsecured creditors - property is worth 180K and she only has $130K exemptionwhy is she able to keep itexemptions dont beat consensual liens..it looks at debtors interests above the lien. Order of money distribution: Mortgage lender, debtors interest, unsecured if sold at auction by sheriff will debtor get- homestead exemption (yes).. but first money goes to mortgage holder, nothing goes to debtor or the unsecured person judgment creditor cant grab it -- mortgage gets paid down the mortgage lender still gets paid Priority: costs of sale, first lien holder (in order of priority), followed by debtors exemption, judgment creditors - Judgment creditor is residual claimant on left over asset General point: want person with skin in the game to make decisions.if company is solvent junior most interest holder (shareholder) is losing so they should make decision In re Sumerell- issue: have 21K worth of stuff and Q is if its sold in bankruptcy how much will creditor actually get? - Court had to figure out what the value was-- 2 diff appraisers show up - 20 cents on dollar OR 19K Court needed to decide what the right valuation is for stuff! Court uses fair market valueb/c debtor ends up keeping the stuff Different ways to calculate the exemptions:-- CHECK WHO IS GETTING THE STUFF to properly valuate the items at hand By what the value is to the debtor Byw aht the fair market value is - By what the value is - 506A of the bankruptcy code: o The valuation should be calculated byu the disposition of the property
If the debtor is keeping it , you find the value to the debtor
If the creditor is getting itwhat the value is to the creditor
Pg. 101- for certain kinds of liens
- Consensual liens beat exemptions - 522 F if a debtor grants non possessory security interest in property that are usually exempt under state law and its not to get money to buy stuff but to cover other debts then that lien will be invalidated to extent that it impairs exemption - Cant use stuff as collateral o Bankruptcy code paternalismprevents certain things from being used as collateral/ hoc Asset protection trust - Domestic - Foreign- take money and put it in a bank account in cayman/ cook islands Questions- 5.1 - No one place where guy has had domicile in 730 days - Florida exemptions should applymaybe unlimited homestead exemption o Within 2 years someone will move from a small exmeption state to a large to buy a large house - Wyoming may not be able to apply property if its not in the actual state o If directed to a state where the person will get no exemptions you can elect federal exemptions 5.2- tenancy by the entiretymarried couple owns the property 522 b3Bneed to be creditors of both husband and wifein case these are only the husbands creditors - not an exemption but allows debtors to insulate certain property from creditors 5.3 - 522p1 value of homestead has increased by more than 146K in last 1200 days (4 years) then homestead increase is limited to 125K million they paid is fine but the running up of 3 mill they only get to keep 140K