In Re Irwin Hyman Janice Hyman, Debtors. Irwin Hyman Janice Hyman v. Gary A. Plotkin, Trustee
Opinion
Opinion
Kozinski, J.
More than 40 states, including California, have statutes that place a debtor’s homestead or a portion thereof beyond the reach of creditors. This protection carries over into bankruptcy to shelter the debtor from forced sale of his homestead by a bankruptcy trustee unless certain conditions are satisfied. In this case we explore the conditions to be met before a bankruptcy trustee may sell a debtor’s homestead in accordance with California’s homestead exemption statute and the United States Bankruptcy Code.
Facts
On November 21, 1988, Appellants Irwin and Janice Hyman filed a voluntary petition for bankruptcy under Chapter 7 of the Bankruptcy Code. Appellee Gary Plotkin was appointed as trustee to liquidate the Hymans’ estate pursuant to 11 U.S.C. § 704 .
The only real property the Hymans owned was their home, which they valued at $415,000 and which was encumbered by $347,611 in consensual liens. On their bankruptcy schedule of exempt property, the Hymans claimed their “homestead” as exempt under Cal.Civ.Proc.Code § 704.720, listing the value of the exemption as $45,-000. The trustee did not object to this claim of exemption within the 30-day window created by Bankruptcy Rule…