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Bankruptcy Court Rules That Debtors Did Not Abandon Their Home

Posted By admin || 31-May-2010

Court Rules Debtors Did Not Abandon HomeIn the Chapter 13 bankruptcy case of Curry, James K. and Diana M.; In re, a bankruptcy court overruled a bankruptcy trustee who tried to revoke the debtors' homestead exemption by claiming they had abandoned their home.

The details of the bankruptcy case:

The Chapter 13 debtors owned a home in Pleasanton, Kan., but lived in Topeka "while school is in session." Pleasanton is about 120 miles from Topeka. The Pleasanton house was the debtor-wife's childhood home, which she inherited in about 2000. The debtors moved into the house prior to the mother's death. During the school year, the debtor-husband lives in a rent-subsidized apart­ment in Topeka where he worked as a school bus driver and received free health care, which was unavailable in Pleasanton. The debtor-wife split time between the house and the apartment. The debtors listed the house as their address on their bankruptcy schedules. The trustee ob­jected to the debtors' assertion that the Pleasanton house was their exempt homestead. The trustee also objected to confirmation of the debtors' plan.

The bankruptcy court ruled that the debtors in fact had not abandoned their property and subsequently overruled the bankruptcy trustee's objections.  Furthermore, the bankruptcy court stated that the Pleasanton home was the debtors' homestead because the debtors considered it their home and clearly intended to return their permanently. The fact that the debtors spent a great deal of time in Topeka did not matter because they never intended to stay there and the fact that they maintained their Pleasanton home, kept it fully furnished, maintained utilities there and never rented it out further indicated that they planned to return giving their a right to the homestead exemption in bankruptcy.

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