Opinion
CASE NO. 12-00337 BKT
07-05-2012
In re: ANABELLE EXCLUSA GREEN ANGEL MANUEL RIVERA LOPEZ XXX-XX-5483 XXX-XX-8375 Debtor(s)
Chapter 13
Amended Opinion & Order
Before the Court is the Chapter 13 Trustee's (the "Trustee") Objection to Exemptions (the "Objection") (Dkt No. 12), Debtors' response to the Objection (Dkt No. 13), and the Trustee's memorandum of law in support of the Objection (Dkt No. 30). The Trustee argues that under the Puerto Rico Home Protection ActNo. 195, enacted on September 13, 2011 (in Spanish titled "Ley del Derecho a la Protección del Hogar Principal y el Hogar Familiar", referred to herein as the "PR Home Protection Act"), the homestead exemption claimed by Debtors is inapplicable to bankruptcy cases. Therefore, the Trustee requests that Debtors' claim for exemptions under the PR Home Protection Act be disallowed. For the reasons set forth below, the Objection to Exemptions is granted and Debtors' claim for homestead exemption pursuant to the PR Home Protection Act is denied.
I. Factual Background
Debtors, Anabelle Exclusa Green and Ángel Manuel Rivera López, filed a voluntary petition under the provisions of Chapter 13 of the Bankruptcy Code on January 23, 2012 (Dkt No. 1). Debtors listed their primary residence in Schedule C with a value, as of the date of the filing of the petition, of $87,500.00. (Dkt. No. 1, p. 27).As it appears from the Schedules, said property is not encumbered with any mortgage liens. Debtors claim a homestead exemption over their primary residence for the totality of the value of the property, pursuant to the PR Home Protection Act. (Dkt. No. 1, p. 27).
The Trustee argues that the recent PR Home Protection Act is inapplicable to bankruptcy cases, and, as such, Debtors' homestead exemption must be disallowed. (Dkt No. 12). The Trustee mainly relies on the specific waivers to the homestead exemption that the PR Home Protection Act incorporates in its Article 4. (Dkt No. 30).
II. Discussion and analysis
Under Section 541 of the Bankruptcy Code, all of Debtors' assets become property of the bankruptcy estate upon the filing of the bankruptcy petition. This, however, is subject to Debtors' right to reclaim certain property as exempt under Section 522. 11 U.S.C. § 522.
Article 4 of the PR Home Protection Act provides that the homestead protection is unwaivable, except in those circumstances expressly enumerated in said article. Applicable to this case, Article 4(d)provides that the homestead protection is waived in those cases where the Bankruptcy Code is applicable. Thus, by its plain terms, the protections of the PR Home Protection Act are exclusive of the exemptions afforded by the Bankruptcy Code. Pursuant to Article 4 of the PR Home Protection Act, when Debtors filed for bankruptcy, they automatically waived the homestead protection provided therein. See In re Hernández, -- B.R. --,2012 WL 1255126*3 (Bkrtcy.D.Puerto Rico, Hon. E. Lamoutte).
III. Conclusion
For the reasons set forth herein, the Trustee's Objection to Exemptions is granted.
IT IS SO ORDERED.
San Juan, Puerto Rico this 05 day of July, 2012.
_______________
Brian K. Tester
U.S. Bankruptcy Judge