Appellate Law

CA1: non-nondischargeable debt doesn?t pierce homestead exemption

By S. COTUS

Pasquina v. Cunningham, No. 06-2786 concludes that the proceeds from the sale of the home that was subject to a state-law homestead exemption retain the exempt status of the home itself under 11 U.S.C. § 522(c). I thought the law on this way pretty clear (though there are exceptions for certain kinds of debts).      

The subject matter is somewhat interesting because it involves lawyers getting into stupid fights with each other resulting in a judgment in an  adversary proceeding that one lawyer had caused willful and malicious financial injury to the other.  The appellant had argued that because the debtor did some things the bankruptcy court considered bad, but the First had said that these kinds of debts would be nondischargeable (as the Bankruptcy court so found), but wouldn?t have some kind of special properties that would allow the creditor to go after the proceeds of the sale of exempt property. 

Full post as published by Appellate Law and Practice on January 22, 2008 (boomark / email).