Christiane Perkins

1 The funds were obtained as a result of a prepetition garnishment of Debtor’s bank account. They were turned over
to the Trustee by the Toledo Municipal Court after Debtor filed her Chapter 7 petition.
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF OHIO
WESTERN DIVISION
In Re:
Christiane Perkins,
Debtor.
) 	Case No. 10-31614
)
) 	Chapter 7
)
)
) 	JUDGE MARY ANN WHIPPLE
ORDER
This case came before the court for hearing on Debtor’s “Objection to the Trustee’s Notice of
Assets,” which the court construes as a motion for turnover (“Motion”). [Doc. # 15]. In the Motion, Debtor
asks the court to order the Chapter 7 Trustee to turnover to her certain funds in the Trustee’s possession that
are being treated as assets of the bankruptcy estate.1 The basis of Debtor’s request is that the funds in the
Trustee’s possession constitute student loan funds awarded under Title 20 of the United States Code and,
as such, are exempt under 20 U.S.C. § 1095a. At the hearing, Debtor offered testimony and other evidence
in support of her position, and both the Trustee and Debtor offered argument in support of their respective
positions.
On further consideration, however, the court finds the procedural posture of Debtor’s Motion
The court incorporates by reference in this paragraph and adopts as the findings
and orders of this court the document set forth below. This document has been
entered electronically in the record of the United States Bankruptcy Court for the
Northern District of Ohio.
Dated: March 25 2011
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problematic. 	“When a debtor files a Chapter 7 petition, all of the debtor’s assets become property of the
bankruptcy estate, see 11 U.S.C. § 541, subject to the debtor’s right to reclaim certain property as ‘exempt,’
§ 522(l).” Schwab v. Reilly, 130 S. Ct. 2652, 2657 (2010). Debtor does not dispute the fact that the funds
are property of the bankruptcy estate subject to a claim of exemption. However, Debtor has not properly
claimed her interest in the funds as exempt.
Section 522 of the Bankruptcy Code sets forth the manner in which exemptions must be claimed.
“The debtor shall file a list of property that the debtor claims as exempt under subsection (b) of this
section. . . . Unless a party in interest objects, the property claimed as exempt on such list is exempt.” 11
U.S.C. § 522(l) (emphasis added). Rule 4003 of the Federal Rules of Bankruptcy Procedure direct the
debtor to list exempt property on the schedule of assets required to be filed by Federal Rule of Bankruptcy
Procedure 1007, which in turn requires the debtor to file a schedule of assets as prescribed by the
appropriate Official Forms. See Fed. R. Bankr. P. 4003(a) and 1007(b)(1). Official Form 6 includes a
Schedule C on which the debtor must claim property as exempt. See Reilly, 130 S. Ct. at 2660 (recognizing
that “the list of property” to which § 522(l) refers is “currently known as ‘Schedule C’”); Olson v. Anderson
(In re Anderson), 377 B.R. 865, 874 (B.A.P. 6th Cir. 2007) (“proposed exemptions must be listed on the
debtor’s Schedule C”); In re Zaidi, 293 B.R. 861, 862-63 (Bankr. E.D. Va. 2002) (“In order to claim an
exemption in bankruptcy, the exemption must be scheduled on Schedule C of the debtor’s schedules.”).
In this case, Debtor has neither scheduled the funds at issue as assets on bankruptcy Schedule B nor
has she listed her interest in the funds as exempt on Schedule C. Until an exemption is properly claimed,
Debtor has no basis for asserting a right to the funds. This requirement is more than a mere formality. It
provides notice to all interested parties, including creditors, as to property interests in which the debtor is
claiming an exemption. Rule 4003 specifies the time within which interested parties must object to the
exemptions claimed on Schedule C. 	Reilly, 103 S. Ct. at 2661 n.6. 	Rule 4003 also provides that the
objecting party has the burden of proving that the exemptions are not properly claimed. 	Fed. R. Bankr. P.
4003(c). By contrast, with respect to a motion for turnover, the burden of proof is on the party seeking
turnover. United States v. Chalmers (In re Wheeler), 252 B.R. 420, 425 (W.D. Mich. 2000).
The court will, therefore, deny Debtor’s Motion without prejudice as the exemption issues raised
are not before the court in the procedural context required by § 522(l) and Rule 4003. 	Debtor will be
granted twenty-one days to file an amended Schedule C to claim an exemption in the funds at issue in the
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2 To the extent that an objection to any claimed exemption in the funds at issue is filed, it may be appropriate to
incorporate the record of the hearing on Debtor’s Motion into the record of any further proceeding, at which the court would
entertain further evidence and argument on the appropriate method of tracing exempt funds commingled with other funds in a bank
account.
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Trustee’s possession. 2 See Fed. R. Bankr. P. 1009(a).
THEREFORE, for the foregoing reasons, good cause appearing,
IT IS ORDERED that Debtor’s Motion captioned Objection to the Trustee’s Notice of Assets [Doc.
# 15] be, and hereby is, DENIED; and
IT IS FURTHER ORDERED that Debtor is granted twenty-one days from the date of this order
to file an amended Schedule C.
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