Bankruptcy

One Ring to Rule Them All, And In the Darkeness Bind Them!

By Joseph McDaniel, Esq.

But wedding and engagement rings continue to be issues in cases, and it may get a little worse over time before it gets better.

But don't stop breathing; I have written two different blog entries about wedding rings, and this is just an update. Read the other two so you'll understand this one.

And bear in mind that we're talking about only one issue: do you keep the ring or not? In every case where a client of mine wanted to keep the ring, they kept the ring.

Therefore, the only issue is, do you have to pay anything to the trustee for the ring?

There is a fiendishly smart (actually, he's a nice guy, trying to do a good job for his clients) trustee's lawyer in town named Terry Dake.

Terry has formulated an opinion that, while you can stack every other exemption in Arizona except the homestead exemption, you can't stack the wedding ring exemption.

The reason you can't stack the homesteads is that the homestead exemption statute is designed to prevent that.

The reason, Terry believes, that you might not be able to stack the wedding ring exemption and put both the husband's and wife's wedding ring exemption on her ring is simple. Terry believes that the wife's ring is not community property, because it was a gift.

What does that mean to a couple contemplating a Chapter 7 bankruptcy in Arizona, when she has a ring that cost $10,000 when new? Well, that all depends.

But she'll get to keep it, whether or not it's fully or partially exempt, depending on the valuation and the willingness of the couple to pay any overage and appear at an auction, to deal with overbids.

Do you begin to understand why I'm only 20 years old, and yet have this full head of silver hair, with a silver beard? I used to be six-four, two hundred fifty pounds of muscle, with GIGANTIC biceps; blond hair, blue eyes!

Then I became a bankruptcy lawyer in Arizona, and look at me now!

p.s. as to the ring, if it's not paid off, there's a huge chance that the jewelry store has a security interest in the ring. The good news is that it reduces the equity in the ring, so you won't have to pay the trustee to keep the ring. But you would need to pay the jewelry store what they are owed to keep the ring!

p.p.s. if I wrote the laws, this whole process would be very, very simple. I'd simply look at the value of all the exemptions. Then there would be one and only one exemption: the debtors can exempt property with a fair market value as of the date of the filing of a buncha dollars.

Done! Eezy-peezy!

But I didn't write the exemption laws, so we get to work with the laws we have. And Arizona has fairly generous exemption laws, although they're uneven as all get out!

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on February 24, 2010 (boomark / email).