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  1. Bankruptcy Glossary
  2. Objection to Exemptions

What is Objection to Exemptions?

Debtors are able, under Bankruptcy Code Section 522, to claim certain exemptions and maintain designated assets which a creditor can not seize or which can not be liquidated by a trustee. An objection to an exemption may occur if a party of interest (trustee or creditor) objects to the bankruptcy exemption. All bankruptcy exemption objections must be made within 30 days from the date of the creditors' meeting. If creditors fail to make an objection to the exemption within the specified time period the objection is rejected and the property or asset is considered fully exempt. Most creditor objections to exemptions are made because they believe the debtor has assessed a value to the asset which is too low.

A trustee can also make objections to bankruptcy exemptions which are improperly claimed. The trustee must analyze the list of property which the debtor has claimed as exempt and determine if the method the debtor used to assess the property value is valid. Like creditors, the trustee must make their objections to the bankruptcy exemptions within 30 days from the date of the first creditors' meeting. All objections to exemptions must be filed with the bankruptcy court. The debtor is given a chance to respond to all objections and the bankruptcy court will also analyze and make a determination about the exemptions at a bankruptcy hearing. Talk to a bankruptcy attorney who is familiar with your state's laws to determine exempt property values. Federal exemptions allowed vary with inflationary changes and bankruptcy laws can also periodically change.