66 B.R. 39 (Bkrtcy.W.D.Ark. 1986), 85, In re Johnson

Docket Nº:Bankruptcy No. FA 85-214F.
Citation:66 B.R. 39
Party Name:In re William E. JOHNSON and Harriet M. Johnson, Debtors.
Case Date:September 29, 1986
Court:United States Bankruptcy Courts, Eighth Circuit

Page 39

66 B.R. 39 (Bkrtcy.W.D.Ark. 1986)

In re William E. JOHNSON and Harriet M. Johnson, Debtors.

Bankruptcy No. FA 85-214F.

United States Bankruptcy Court, W.D. Arkansas, Fayetteville Division.

September 29, 1986

Jill Jacoway, Fayetteville, Ark., for debtor.

John T. Lee, Siloam Springs, Ark., trustee.

ORDER

ROBERT F. FUSSELL, Chief Judge.

Following the August 19, 1986 hearing the Court took one issue under advisement upon the parties' stipulations and briefs. The issue is whether the Court should grant or deny the trustee's objection to the debtors' claim as exempt all interests in four whole life insurance policies.

Page 40

This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B), (O). The following constitute the Court's findings of fact and conclusions of law as required by Bankruptcy Rule 7052.

Facts

On November 15, 1985, William E. Johnson and Harriet M. Johnson, the debtors, filed their original chapter 7 bankruptcy petition. The debtors amended their petition on June 4, 1986, by claiming as exempt all interests in four whole life insurance policies with surrender values as follows:

Surrender

Policy Value

------ ---------

VA #V8130613 $1,191.03

NW Mutual #2759255 1,002.79

Bankers Life #1568984 560.62

Bankers Life #1640126 1,142.52

---------

$3,896.96

Mr. Johnson is the insured and Mrs. Johnson is the beneficiary of each of the policies.

The trustee has objected to the debtors' exemption and claims that the cash surrender value totalling $3,896.96 should be turned over to the bankruptcy estate.

Conclusions of Law

In Ark.Stat.Ann. § 36-211, the Arkansas Legislature has brought together all of the state exemptions allowed for Arkansas debtors. Subsection 36-211(b)(7) lists specifically the exemption of life insurance proceeds as contained in Ark.Stat.Ann. § 30-208. That statute states in relevant part:

All moneys paid or payable to any resident of this state as the insured or beneficiary designated under any insurance policy or policies providing for the payment of life, sick, accident and/or disability benefits shall be exempt from liability or seizure under judicial process of any court, and shall not be subjected to the payment of any debt or contract or otherwise by any writ, order, judgment, or decree of any court....

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