The BAP for the Eighth Circuit found that, under the relevant Iowa exemption statute, the debtor could not exempt a vehicle in which she had no equity. In re Goben, No. 13-6039 (Sept. 23, 2013). Acting pro se, the debtor appealed the bankruptcy court’s decision sustaining the creditor’s objection to exemption under Iowa Code section 627.6(9), which provides that “[a] debtor who is a resident of [Iowa] may hold exempt from execution . . . [t]he debtor’s interest in one motor vehicle, not to exceed in value seven thousand dollars.” The court found that because the debtor had no equity in the vehicle she had no “interest” to exempt. The case touches on the question of whether a bankruptcy exemption applies to the debtor’s equity interest in property or in the property itself. In re Iuliano, 457 B.R. 124 (Bankr. M.D. Fla. 2010) (homestead exemption under Florida law applies only to equity in residence). Where a state has opted out of the federal exemptions, the resolution of the issue is controlled by state law. In re Goldman, 70 F.3d 1028 (9th Cir. 1995). Finding that the Iowa law specifies that the exemption is limited to the debtor’s equity, and that the debtor had no right to avoid the lien under section 522(f), the BAP affirmed the decision of the lower court.
[…] State Exemption Limited to Amount of Equity – National Consumer … http://www.ncbrc.org/Acting pro se, the debtor appealed the bankruptcy court's decision sustaining the creditor's objection to exemption under Iowa Code section 627.6(9), which provides that “[a] debtor who is a resident of [Iowa] may hold exempt … […]