- Ag Docket
(case involves construction of homestead exemption in bankruptcy; consolidated case involving debtors from Arizona and Washington and debtors argued that value of home locked-in at time of filing Chapter 7 petition and full value of equity claimed as exempt under state law; trustee made no objection to exemption but case remained open and trustee later sought sale of property for benefit of creditors after fair market value had increased beyond sum of encumbrances against the home and debtor's exemption; trustee allowed to sell the property because debtor who claims homestead exemption at specific dollar amount holds only exempt interest in amount claimed exempt and not the entire property - any additional value in the property remains the property of the bankruptcy estate, regardless of whether the extra value was present at time of filing or whether property increased in value after filing; result is that Chapter 7 debtor will never know the exact status of homestead property until the bankruptcy case is closed or the trustee abandons the property; court cited In re Reilly, 130 S. Ct. 2652 (2010) for its holding).
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