Baseball, NASCAR Collectibles Not Exempt in Texas Bankruptcy

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By Diane Davis

Chapter 13 debtors have to turn their baseball cards and NASCAR collectibles over to the trustee and can’t claim them as exempt property under Texas law, the U.S. Bankruptcy Court for the Western District of Texas held Nov. 13.

Texas law permits exemptions for “home furnishings, including heirlooms.” Texas is a state that allows debtors to use state or federal bankruptcy exemptions.

The purpose of the home furnishing exemption is to exempt items used to furnish a house, but these items are what people would want to collect as a hobby, Judge Craig A. Gargotta wrote ( In re Clark , 2017 BL 408494, Bankr. W.D. Tex., No. 17-51130-CAG Chapter 13, 11/13/17 ).

The trustee may object to these claimed exemptions even though David and Diana Clark claimed them in previous Chapter 13 cases that were ultimately dismissed without a discharge, the court said.

The Clarks had filed four such Chapter 13 cases, and a fifth Chapter 13 case that was later converted to Chapter 7. In that case, the Clarks claimed the same items as exempt and ultimately got a discharge.

But allowing the exemptions in that Chapter 7 case isn’t binding on a subsequent Chapter 13 trustee, the court said. The Chapter 7 trustee in that case and the Chapter 13 trustee in this case are different, and litigants can’t be bound by the decisions of different litigants in earlier cases, the court said.

And because there was no final judgment on the merits in the dismissed Chapter 13 cases, the parties returned “to the positions they were in prior to the filing of a case,” the court said. An objection to those exemptions was never made or upheld, the court said.

Thus, the trustee isn’t barred from objecting to the Clarks’ exemptions, the court said.

Heidi McLeod, San Antonio, represented the Clarks; Chapter 13 Trustee Mary K. Viegelahn, San Antonio, represented herself.

To contact the reporter on this story: Diane Davis in Washington at DDavis@bna.com

To contact the editor responsible for this story: Jay Horowitz at JHorowitz@bna.com

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