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In re Moore (Case No. 07-71844) 12/05/2008

The Court denied debtor's motion to avoid judgment lien by holding that a debtor may not claim, under Virginia Code § 34-18, an exemption in the amount of the entire value of her real property (an amount that far exceeds the $5,000 homestead exemption provided in Virginia Code § 34-4).  Specifically, the Court noted that despite the debtor's exemption of the entire value of her real property in a prior bankruptcy case, it does not follow that the debtor is now entitled to exempt the entire value of the property in the current case.  Instead, the Court held that debtor is entitled to exempt only the amount of the exemption claimed by her in the prior homestead deed and, in accordance with the trustee's concession, a proportionate share of any appreciation in value of the fractional share of such property represented by such exemption amount based on the prior property value.  Further, the Court held that an increase in the value of a debtor's equity in property resulting from a reduction in the amount of any lien against it is more akin to permanent improvements placed upon real estate funded by the use of non-exempt funds which are not entitled to receive the exemption under the plain language of Virginia Code § 34-18.  The Court also held that a debtor is only entitled to assert against her own creditors her exemptions under Virginia law and not the exemptions of her deceased husband.

Date: 
Friday, December 5, 2008
Category: 
Exemptions
Homestead Deed
Lien Avoidance
Chapter: 
7