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Traditional badges of fraud used for § 522(o) analysis. Although the BAP applies traditional badges of fraud for purposes of whether § 522(o)'s intent to defraud element is found, there must be extrinsic evidence of fraud before the homestead exemption is limited, and mere conversion of nonexempt assets to exempt on the eve of bankruptcy is not enough. The addition of § 522(o) by BAPCPA did not change the evidentiary standard for fraudulent conversion in the 8th Circuit; rather, it "marks out a look-back period of ten years....It also extends what was the law in the Eighth Circuit and made it uniform national law." Clark v. Wilmoth (In re Wilmoth), ___ B.R. ___, 2008 WL 5135721, at * 4 (B.A.P. 8th Cir. Dec. 9, 2008) (quoting Addison v. Seaver (In re Addison), 540 F.3d 805 (8th Cir. 2008)).
Section 522(o) not triggered by debtors' move and surrender of prior home. When the Chapter 7 debtors moved from larger home to smaller one on another lot prior to bankruptcy and surrendered first home for foreclosure, § 522(o) was not triggered; this is not the type of transfer the section addresses and has no effect on the value of the new home for exemption purposes; moreover, there is no evidence of transfer with the intent described in § 522(o). In re Jones, ___ B.R. ___, 2008 WL 5159247 (Bankr. D. S.C. Nov. 26, 2008).
Deduction of vehicle ownership expenses when vehicle has no debt continues to divide courts. The Seventh Circuit held that an abovemedian income debtor owning a vehicle free of debt may still deduct the IRS Local Standard for ownership expenses, reversing the district court at Neary v. Ross-Tousey (In re Ross-Tousey), 368 B.R. 762 (E.D. Wis. 2007). After deduction of those expenses, as well as operating expenses, the debtors had no disposable income and were eligible for Chapter 7 relief, with the panel concluding that § 707(b)(2)(A)(ii)(I)'s use of the term "'applicable monthly expense amount' cannot mean the same thing as 'actual monthly expenses.' Under the statute, a debtor's 'actual monthly expenses' are only relevant with regard to the IRS's 'Other Necessary Expenses;' they are not relevant to deductions taken under the Local Standards, including the transportation ownership
©2009 Hon. William Houston Brown
