Question

Dr. Morris Lebovitz and Kerrye Hill Levobitz, husband and wife, were residents of the state of Tenessee. Dr. Lebovitz (Debtor) filed for bankruptcy because she had co-signed on a large loan with Dr. Levobitz. The Debtor is the owner of the following pieces of jewelry: A tiffany 5-carat diamond engagement ring (purchase price $40,000 = $50,000), a pair of diamond stud earring of approximately 1 carat each, a diamond drop necklace of approximately 1 carat, and a Cartier watch. All of these items were gifts from Dr. Lebovitz.

Tennessee opted out of the federal bankruptcy exemption provisions and adopted its own bankruptcy exemption provisions. Tennessee does not provide for an exemption for jewerly. Tennessee does not provide for an exemption for jewelry. Tennessee does provide for an exemption for “necessary and proper wearing apparel”. Debtor claimed that her jewelry was necessary and proper wearing apparel and was therefore exempt property from the bankruptcy estate. The bankruptcy trustee filed and objection to the claim of exemption, arguing that the Debtor’s jewelry does not qualify for an exemption and should be part of the bankruptcy estate. Does Debtor’s jewelry qualify as necessary and proper wearing apparel, and should it us be exempt property from the bankruptcy estate? Using IRAC, determine whether the Lebovitzzes are entitled to keep their jewelry or whether the jewelry must become part of the bankruptcy estate. Please, original answer (no copy from google). Thank you.

Answer 1

Bankruptcy Estate:

It alludes to the Debtor's benefits and different properties which are associated with the liquidation procedures. In any case, certain property is absolved to be incorporated into the insolvency procedures, for example, endowments and legacies.

The individual L claimed a property. Later L and his better half petitioned for a non liquidation appeal because of ailment. L's better half additionally petitioned for an insolvency appeal since she likewise marked the home loan and credit report.

At the point when the liquidation trustee moved the chapter 11 application for procedures L's better half guaranteed her property which comprised of gems things which were endowments given to her and she wore them all the time.

The things possessed by the spouse can't be considered as things of chapter 11 procedures since they are not a piece of the domain. The Jewelry things are blessings that include her wedding band, a watch, a precious stone neckband and ear studs.

Every one of the things given to her are worn by her all the time and in this way they can't be appended to the property of the insolvency home. Hence, it very well may be presumed that the gems of L's better half can't be considered as a feature of the chapter 11 home.