In re Vigil, Bankruptcy No. 81 B 01886 Mc.

• Decision Date: 20 September 1982
• Docket Number: Bankruptcy No. 81 B 01886 Mc.
• Citation: 23 BR 172
• Parties: In re Jeannine Theresa VIGIL, Debtor.
• Court: U.S. Bankruptcy Court — District of Colorado

23 B.R. 172 (1982)

In re Jeannine Theresa VIGIL, Debtor.

Bankruptcy No. 81 B 01886 Mc.

United States Bankruptcy Court, D. Colorado.

September 20, 1982.

Joseph Genova, Pueblo, Colo., trustee.

James Croshal, Pueblo, Colo., for debtor.

MINUTES OF HEARING, FINDINGS, CONCLUSIONS AND ORDER ON TRUSTEE'S OBJECTION TO CLAIM OF EXEMPTION

JOHN F. McGRATH, Bankruptcy Judge.

The Chapter 7 petition in bankruptcy was filed on April 20, 1981. Prior to the petition, on March 31, 1981, the Debtor had closed the doors to her business. At the time of filing the Debtor was not using the inventory to create income for herself in any way. Schedule B-4 set forth inventory exemptions pursuant to 11 U.S.C. §§ 522(d)(1), (5) and (6) in the amount of $5,650.00. The notice of the meeting of creditors stated that objections to the Debtor's claim of exempt property must be filed within 15 days of the section 341(a) meeting set for May 26, 1981.

The Debtor filed an amended Schedule B-4 on June 29, 1981, reducing the amount claimed for inventory to $750.00 pursuant to section 522(d)(6) only. The file does not reflect an objection to exempt property until July 8, 1982. This was approximately thirteen and one half months after the section 341 meeting. The Trustee held a sale of the inventory at auction which brought in $10,551.50, the sole assets in this case.

The Court, consequently, is faced with a dilemma. First, the claimed exemption is obviously invalid because the reason for an exemption in inventory is to allow a debtor in business to obtain a "fresh start," and to allow it in this case would be to give the Debtor a windfall. Second, any objections to the Debtor's claim of exemptions should be reasonably and timely filed.

The notice sent by the United States Trustee to all creditors informing them of the fact that a certain person has filed for bankruptcy and setting forth, among other things, the time and place of the section 341(a) meeting contains the following provision: "Unless the Court extends the time, objections to the debtor's claim of exempt property (Schedule B-4) must be filed within fifteen (15) days after the above date set for the meeting of creditors." This notice from the Trustee is merely a form notice which sets forth a convenient date for filing of objections to exemptions and consequent hearings on any objections. It does not have the authority of an Order of Court.

Bankruptcy Rule 403, which is undoubtedly the rule upon which the Trustee bases the time frame, does not apply. Bankruptcy Rules in effect at the time that the Bankruptcy Reform Act of 1978 was enacted apply only if not inconsistentent with the Code. Section 522(d)(1) of the Code does not establish any time limitation for the filing of objections to exempt...