ANTONIO VILLANUEVA RODRIGUEZ

IN THE UNITED STATES BANKRUPTCY COURT FOR
THE DISTRICT OF PUERTO RICO
IN RE:
ANTONIO VILLANUEVA RODRIGUEZ,
Debtor.
CASE NO. 24-02613 MAG7
Chapter 7
FILED & ENTERED ON 3/27/2026
OPINION AND ORDER
On June 21, 2024, Antonio Villanueva Rodríguez (“Debtor”) filed a petition for relief
under Chapter 7 of the Bankruptcy Code. Dkt. # 1. On June 22, 2024, the court appointed Noreen
Wiscovitch Rentas as the Chapter 7 Trustee (the “Trustee”) for Debtor’s estate. Dkt. # 5. This is
an asset case. Debtor’s discharge was entered on March 26, 2025. Dkt. # 49.
Extensive litigation has ensued between Debtor and the Trustee concerning Debtor’s
claimed exemptions, which have been amended through multiple filings of schedule C. Dkt. ##
1, 9, 21, 52. The Trustee objected to the exemptions claimed by Debtor, initially as set forth in
the amended schedule C filed at Dkt. # 21, and later as reflected in the further amended schedule
C filed at Docket #52. Dkt. ## 24, 65.
The Trustee’s initial objections to exemptions included those Debtor claimed over two
motor vehicles and the four Individual Retirement Arrangement (“IRA”) accounts. Subsequently,
Debtor amended schedule C at Dkt. # 52 claiming only one of the two motor vehicles as exempt
and including exemptions over the balances of three bank accounts. In response, the Trustee
withdrew her objection to the exemption claimed for the other motor vehicle and objected to the
exemptions over the balance of the bank accounts. Dkt. ## 65 & 74 at p. 8. Accordingly, this
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Opinion and Order addresses only the Trustee’s objections to the exemptions claimed by Debtor
over the IRA accounts and the bank account balances.
Currently pending before the court are the following: the Trustee’s objection to Debtor’s
claimed exemptions (Dkt. # 24); Debtor’s opposition (Dkt. # 27); the Trustee’s reply (Dkt. # 31);
Debtor’s sur-reply (Dkt. # 38); Debtor’s supplemental response (Dkt. # 46); the Trustee’s
objection to Debtor’s amended exemptions (Dkt. # 65); Debtor’s motion in limine to limit the
Trustee’s objection (Dkt. # 70); Debtor’s reply to the Trustee’s objection (Dkt. # 71); the
Trustee’s opposition to Debtor’s motion in limine and to Debtor’s reply (Dkt. # 74); and the
Debtor’s sur-reply to the Trustee’s opposition (Dkt. # 97).
For the reasons stated below, Debtor’s motion in limine is denied, the Trustee’s objection
to Debtor’s claimed exemptions over the IRA accounts is sustained in part and denied in part
and, the Trustee’s objection to Debtor’s claimed exemptions over the bank account balances is
sustained and Debtor’s claimed exemption is disallowed.
I. 	JURISDICTION
This court has jurisdiction over the subject matter and the parties pursuant to 28 U.S.C.
§§ 1334 and 157(a), L. Civ. R. 83K(a), and the General Order of Referral of Title 11 Proceedings
to the United States Bankruptcy Court for the District of Puerto Rico, dated July 19, 1984
(Torruella, C.J.). This is a core proceeding in accordance with 28 U.S.C. § 157(b).
II. 	BACKGROUND
On June 21, 2024, Debtor filed his petition for relief under chapter 7 along with his
schedules, statement of current monthly income and means test calculation, and statement of
financial affairs. Dkt. # 1. The 11 U.S.C. § 341 meeting of creditors commenced on July 18,
2024. Dkt. # 8. On August 7, 2024, Debtor filed his first amended schedule C. Dkt. # 9. The
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meeting of creditors was continued to August 15, 2024, and then to September 17, 2024. Dkt. ##
8, 12.
On September 17, 2024 at Dkt. #21, Debtor filed an amended schedule C listing exempt
properties as follows:
Property description 	Value 	Exemption
amount
Exemption statutory basis
Urb. Jardines De Carolina E-1
Calle E Carolina, PR 00987
$122,400 	$61,200 	P.R. Laws Ann. tit. 31, § 1858
2016 Mazda Cx-5 	$9,325 	$9,325 	P.R. Laws Ann. tit. 32, §
1130(4)(a)
Refrigerator 	$200 	$200 	P.R. Laws Ann. tit. 32, § 1130(14)
Bedroom Set 	$100 	$100 	P.R. Laws Ann. tit. 32,§ 1130(2)
Stove 	$200 	$200 	P.R. Laws Ann. tit. 32, § 1130(14)
Dining Room Set 	$100 	$100 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(b)
Living Room Set 	$100 	$100 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(b)
Washing Machine 	$200 	$200 	P.R. Laws Ann. tit. 32, § 1130(14)
TV 	$75 	$75 	P.R. Laws Ann. tit. 32, § 1130(14)
Cellphone 	$100 	$100 	P.R. Laws Ann. tit. 32, § 1130(14)
Clothes And Shoes 	$100 	$100 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(c)
Wristwatch, Chain 	$200 	$200 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(c)
401k: Fidelity 	$3,200 	$3,200 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(j)
IRA: Universal Life Insurance
Company # 3595
$5,000 	$5,000 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(j)
IRA: Cosvi #0812 	$5,000 	$5,000 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(j)
IRA: Banco Popular de Puerto
Rico #8363
$5,000 	$5,000 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(j)
IRA: Oriental Bank #6147 	$5,000 	$5,000 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(j)
2020 Ford Ecosport 	$9,125 	$9,125 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(g)
Dkt. # 21, pp. 9-11.
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On August 15, 2024, the Trustee filed her initial objection to Debtor’s claimed
exemption, which took issue with the exemptions related to Debtor’s motor vehicles and the IRA
accounts. Dkt. # 24.
Regarding the four IRA accounts, each valued at $5,000 for a total of $20,000, the
Trustee argued that they were improperly created on the eve of bankruptcy using non-exempt
funds. According to the Trustee, the IRA accounts were opened within weeks of the petition
date. The Trustee maintained that Debtor funded the IRAs from a regular bank account, not from
a qualified retirement account or rollover, and the funds used to open the IRA accounts
originated from the sale of real estate in North Carolina on May 17, 2022. The Trustee
emphasized that the IRAs were opened after Debtor filed his 2023 Puerto Rico tax return in
February 2024, confirming they were newly created rather than established retirement accounts.
She asserted that Debtor’s conversion of $20,000 in non-exempt savings into IRAs immediately
before filing was done in bad faith, constituting a fraudulent attempt to shield assets from
creditors. Thus, the Trustee sought the disallowance of all four IRA exemptions.
On October 29, 2024, Debtor opposed the Trustee’s objections. Dkt. # 27. Debtor argued
that his bankruptcy was filed in good faith, and the exemptions were claimed in good faith and
are consistent with the purposes of the Bankruptcy Code. He explained that his financial
situation arose from extraordinary personal circumstances, not from any intent to defraud
creditors. Specifically, Debtor became a widower in February 2024 after his partner of twenty-
three years died following a lengthy battle with cancer. He further explained that unbeknownst to
him, his partner had incurred significant debts during the illness to cover medical treatments both
in Puerto Rico and abroad. Upon his partner’s death, Debtor inherited both assets and debts
under Puerto Rico inheritance law. To protect the home they co-owned, purchased with proceeds
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from a prior property sale in North Carolina, Debtor filed for bankruptcy to discharge his and his
late partner’s debts.
Debtor also emphasized that he surrendered a 2.7-acre lot in Mayagüez valued at
$49,300, sufficient to satisfy all timely filed unsecured claims in full after administrative
expenses.1 He rejected the Trustee’s allegations of bad faith, asserting that all questions at the 11
U.S.C. §341 meetings were answered, his schedules were duly amended as requested, and no
evidence supports a finding of misconduct.
Regarding the four IRA accounts, Debtor explained that they represent what remained of
his retirement savings after years of financial strain from his partner’s illness. He maintained that
those funds are legitimately protected as retirement assets. Debtor further contended that
surrendering significant non-exempt property while protecting modest retirement savings cannot
be construed as bad faith.
On November 27, 2024, the Trustee replied to Debtor’s opposition. Dkt. # 31. The
Trustee argued that Debtor’s response failed to address the substantive legal and factual grounds
of her objections to the claimed exemptions. While Debtor asserted that his actions were taken in
good faith and that the bankruptcy filing was intended to discharge debts inherited from his late
partner, the Trustee contended that such assertions do not rebut the specific statutory objections
raised. The Trustee also pointed out that Debtor admits inheriting both assets and liabilities from
his deceased partner and that there is a will naming Debtor as the sole heir. Thus, Debtor
inherited the equity in the jointly owned residence, a motor vehicle, and various bank account
balances, all of which became property of the bankruptcy estate upon filing under 11 U.S.C. §
1 On July 9, 2025, the Trustee filed a report of sale informing that she sold at a public auction the lot of land located
in Mayagüez, Puerto Rico, for $23,500 and obtained net proceeds for the estate in the amount of $22,044.26. Dkt. #
66.
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541. Accordingly, the Trustee emphasized that there was no “surrender” of property because all
assets automatically became part of the estate by operation of law.
The Trustee further clarified that Debtor is entitled to claim exemptions under state law,
subject to objection, and that the Trustee has not objected to all claimed exemptions, only to
those not properly taken. The Trustee reiterated that the IRA exemptions should be disallowed,
as they involve property acquired or converted into exempt form immediately before bankruptcy
and therefore fall outside the protection of valid exemption law.
On December 17, 2024, Debtor filed a sur-reply to the Trustee’s response. Dkt. # 38. He
argued that his selection of exemptions is permitted under the Bankruptcy Code. He asserted that
he properly exercised his statutory right to choose which assets to exempt, noting that any asset
not claimed as exempt, such as the 2.7 acres in Mayagüez, was effectively surrendered to the
Chapter 7 trustee, while his residence was claimed as exempt pursuant to a prepetition
homestead declaration. Debtor maintained that the Trustee lacked authority to question his
exemption choices, that no bad faith or intent to defraud creditors exists, and that the objection to
his claimed exemptions was without merit.
On March 17, 2025, Debtor’s prior counsel withdrew from representation, and new
counsel entered an appearance on Debtor’s behalf. Dkt. # 45.
On March 18, 2025, the Debtor, through newly retained counsel, filed a supplemental
response in further opposition to the Trustee’s objections to exemptions. Dkt. # 46. In the
supplemental response, Debtor argued that the mere conversion of non-exempt assets into
exempt assets on the eve of bankruptcy was insufficient, standing alone, to warrant disallowance
of the claimed exemptions. Debtor contended that this type of exemption can be denied only
upon a showing of extrinsic fraud. Debtor further asserted that bankruptcy law permitted limited
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pre-bankruptcy planning and that his actions fell within the scope of permissible exemption
planning.
On April 11, 2025, Debtor filed an amended schedule C. Dkt. # 52, pp. 14-17. Debtor
now listed in amended schedule C the following properties as exempt:
Property description 	Value 	Exemption
amount
Exemption statutory basis
Urb. Jardines De Carolina E-1
Calle E Carolina, PR 00987
$122,400 	$122,400 	P.R. Laws Ann. tit. 31, § 1858
2020 Ford Ecosport 	$6,244 	$6,244 	P.R. Laws Ann. tit. 31, § 9302(g)
Refrigerator, 3-bedroom sets,
stove, dining room set, living
room set, washing machine.
$900 	$900 	P.R. Laws Ann. tit. 32, §
1130(14)
TV, Cellphone 	$175 	$175 	P.R. Laws Ann. tit. 32, §
1130(14)
Stamp Collection 	$100 	$100 	P.R. Laws Ann. tit. 32, § 1130(2)
Bycicle 	$50 	$50 	P.R. Laws Ann. tit. 32, § 1130(2)
Clothes And Shoes 	$100 	$100 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(c)
Wristwatch, Chain 	$200 	$200 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(c)
Dog 	$1 	$1 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(f)
Oriental Bank
Checking account
Account No. 5079
$247.01 	$247.01 	P.R. Laws Ann. tit. 32, § 1130(2)
$247.01 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(h)
PenFed Credit Union Savings
& Shares
Savings account
$55.04 	$55.04 	P.R. Laws Ann. tit. 32, § 1130(2)
$55.04 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(d)
Firstbank Checking &
Savings
Savings account
Acct. No. 4692
$2,905.96 	$2,343.37 	15 U.S.C. § 1673
$2,343.37 	P.R. Laws Ann. tit. 32, § 1130(7)
$2,343.37 	P.R. Laws Ann. tit. 31, § 9302(h)
$562.69 	P.R. Laws Ann. tit. 31, § 9302(d)
$562.69 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(d)
401k: Fidelity 	$10,022.99 	$10,022.99 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(j)
$10,022.99 	11 U.S.C. § 522(b)(3)(C)
$5,000 	$5,000 	Law No. 55-2020, Title 3, Ch.
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IRA: Universal Life Insurance
Company # 3595
1, Art. 1157(j)
$5,000 	11 U.S.C. § 522(b)(3)(C)
IRA: Cosvi #0812 	$5,000 	$5,000 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(j)
$5,000 	11 U.S.C. § 522(b)(3)(C)
IRA: Banco Popular de
Puerto
Rico #8363
$5,000 	$5,000 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(j)
$5,000 	11 U.S.C. § 522(b)(3)(C)
IRA: Oriental Bank #6147 	$5,000 	$5,000 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(j)	$5,000
2020 Ford Ecosport 	$6,392 	$6,392 	Law No. 55-2020, Title 3, Ch.
1, Art. 1157(g)
Dkt. # 52, pp. 14-17.
On July 9, 2025, after requesting time to do so, the Trustee renewed her objection to
Debtor’s amended claimed exemptions. Dkt. # 65.
As for the IRA accounts, the Trustee reiterated that these IRA accounts, opened between
May 18 and June 11, 2024, were all created within a few weeks prior to the bankruptcy petition.
According to the Trustee, at the 11 U.S.C. § 341 meeting of creditors, Debtor admitted that the
funds used to purchase the IRAs originated from a regular bank account, not from a qualified
retirement account or through a direct rollover. She further argued that those pre-petition bank
funds, allegedly proceeds from the sale of real estate in North Carolina in May 2022 or money
received upon the death of Debtor’s partner, could have been used to pay creditors and therefore
were not retirement funds under either Puerto Rico fiscal law or the United States Internal
Revenue Code. The Trustee also pointed out that the IRA accounts were opened between May
and June 2024, after the Debtor had filed his 2023 Puerto Rico tax return in February 2024. The
Trustee argued that since the deadline to make IRA contributions applicable to the 2023 tax year
expired on April 15, 2024, any contributions made thereafter could only apply to 2024 and were
therefore outside the permissible period for retroactive tax benefit treatment. This statement is
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unsupported by statute or case law. The Trustee attached to her objection the IRA contract with
Oriental Bank opened on May 18, 2024 which indicates that the taxable year for which this IRA
is being opened is 2023. Dkt. # 65 at p. 17.
Furthermore, the Trustee argued that the total of $20,000 contributed far exceeded the
annual contribution limits. As such, the deposits constitute excess contributions, which are
subject to additional taxation and are not exempt from taxation. “An IRA must meet the
requirements of the Internal Revenue Code/Hacienda to be claimed exempt by a Debtor in
Bankruptcy. Funds contributed [in] excess of the yearly statutory limits are subject to additional
taxes and since they are not exempt from taxation, they cannot be claimed exempt by a debtor
under the Bankruptcy Code. In re Brainard, 652 B.R. 1 (Bankr. D. Conn 2023)”. Dkt. # 65 at pp.
6-7. The Trustee further argued that the Debtor’s transfer of $20,000 into four IRAs on the eve of
bankruptcy was a conversion of non-exempt assets into exempt and that the claimed exemptions
should be disallowed.
As to the bank account balances claimed as exempt for the first time in amended schedule
C at Dkt. # 52, the Trustee explained that she had previously requested turnover of these funds
on the basis that they constitute nonexempt assets, but Debtor failed to comply. The Trustee
argued that the cited exemptions do not apply to funds held in a bank account as of the date of
the petition. Debtor invoked Law 55-2020, Title 3 Ch. 1, Art. 1157(h); 15 U.S.C. §1673 and PR
Laws Ann. tit. 32 §1130(7) but according to the Trustee these are all identical exemption
provisions which do not apply to funds deposited in bank accounts because the Trustee is not a
third-party creditor trying to garnish/embargo the Debtor’s wages exceeding the allowed amount
of 25%.
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On August 20, 2025, Debtor filed a motion in limine to limit the Trustee’s objection to
exemptions. Dkt. # 70. Debtor argued that the Trustee’s objection improperly revisits previously
claimed and uncontested exemptions, which are now time-barred under Fed. R. Bankr. P.
4003(b). Debtor further noted that the retirement accounts were already properly and timely
claimed as exempt before the filing of the third amended schedules at Dkt. #52. The subsequent
amendment did not introduce any new exemption or alter the substance of the prior exemptions
claimed but merely added an additional statutory basis—specifically, 11 U.S.C. §
522(b)(3)(C)—to reinforce the existing exemption already protected under Puerto Rico law.
Debtor argued that this clarification simply strengthened the legal support for the exemption
rather than creating a new one. Therefore, Debtor argued that the Trustee should not be permitted
to renew or expand her prior objection, which had already been fully presented to and considered
by the court.
On August 26, 2025, Debtor filed an answer to Trustee’s objection to amended
exemptions. Dkt. # 71. Debtor argued that the latest amendments to the schedules were made in
good faith to correct inadvertent omissions and update asset values. He explained that the
amendments primarily involved modest bank account balances, household goods, and revised
retirement account values, and argued that the claimed exemptions are fully supported by Puerto
Rico law and applicable federal protections.
On September 24, 2025, the Trustee responded to both, the motion in limine and Debtor’s
answer to her objection. Dkt. # 74. In her response, the Trustee highlighted the changes from
amended schedule C filed at Dkt. # 21 to amended schedule C filed at Dkt. # 52 as to exemptions
in dispute.
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With respect to the motion in limine, the Trustee argued that Debtor failed to identify
with specificity the evidence that should be excluded in connection with her objection to
Debtor’s third amended claimed exemptions. The Trustee maintained that her objection was
properly filed pursuant to Fed. R. Bankr. P. 4003(b) following Debtor’s amendment to schedule
C. She further contended that Debtor was attempting to preclude her from responding to a newly
asserted exemption theory, which invoked additional statutory provisions and altered the legal
characterization of the exemption in an effort to strengthen the foundation for the previously
claimed exemption.
With respect to Debtor’s claimed exemption in the bank account balances, the Trustee
argued that Debtor provided no new factual or legal support and merely reiterated the language
of Article 1157(h) of the 2020 Puerto Rico Civil Code and Article 249 of the Puerto Rico Code
of Civil Procedure, both of which address wage garnishment. The Trustee contended that these
provisions were inapplicable to the funds held in Debtor’s bank accounts as of the petition date.
Specifically, she asserted that Debtor failed to demonstrate that: (i) a judgment creditor had
obtained or executed a garnishment order against his wages; (ii) any such wages were earned
within thirty (30) days prior to execution; or (iii) the funds were being held by a garnishing
creditor at the time of filing.
The Trustee further argued that Article 1157(h) of the 2020 Puerto Rico Civil Code does
not extend to funds deposited in bank accounts. She noted that the legislature specifically
enumerated particular categories of exempt monetary assets and imposed express monetary
limits, including: household goods ($10,000) under Article 1157(b); agricultural tools ($4,000)
under Article 1157(e); professional tools ($10,000) under Article 1157(f); and life insurance
proceeds under Article 1157(i). The Trustee also highlighted that Article 1157(i) was amended
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on August 12, 2024, to clarify that life insurance proceeds are exempt only when the policy
insures the debtor’s life and the beneficiary is a legitimate heir. According to the Trustee, had the
legislature intended to exempt funds held in deposit or bank accounts, it would have done so
expressly. On this basis, the Trustee argued that the exemption claimed in the bank account
balances should be disallowed.
As for the IRA accounts, the Trustee reaffirmed her prior objections to the exemption
claimed over the four IRA accounts, which were purchased on the eve of bankruptcy using funds
from Debtor’s personal bank account. She argued that Debtor failed to meet the requirements
under both the United States Internal Revenue Code and Puerto Rico Treasury laws necessary for
those funds to qualify as exempt under Article 1157(j) of the 2020 Puerto Rico Civil Code.
The Trustee clarified that she does not dispute a debtor’s ability to claim exemptions
provided under federal non-bankruptcy law but emphasizes that Debtor has not done so in this
case. The Trustee noted that Debtor relies on 11 U.S.C. § 522(b)(3)(C), which is a bankruptcy
statute, not a non-bankruptcy exemption provision. The Trustee argued that because Debtor
elected to claim exemptions under state law, he cannot simultaneously invoke § 522(b)(3)(C).
And even if § 522(b)(3)(C) were applicable, the Trustee argued that the underlying requirements
remain unmet. Retirement funds are only exempt if they are held in a qualified account under §§
401, 403, 408, 408A, 414, or 457 of the Internal Revenue Code. Here, the four IRA accounts
were newly created just days before filing and were not funded by rollovers from any prior
qualified account. The funds originated entirely from Debtor’s personal bank account, and the
aggregate contributions of $20,000 exceeded the annual tax-deferred contribution limits under
both federal and Puerto Rico law for 2024.
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On November 25, 2025, Debtor filed a “final” reply to the Trustee’s objections to
exemptions. Dkt. # 97. He maintained that his claimed exemptions are properly grounded in
Puerto Rico law and incorporated into bankruptcy through 11 U.S.C. § 522(b)(3). He contended
that Puerto Rico’s exemption statutes, particularly those protecting one month of provisions and
75% of recent wages under 32 L.P.R.A. § 1130(2) and (7), apply in bankruptcy regardless of
whether a prepetition garnishment existed, and that the Trustee’s contrary interpretation
improperly narrows these protections in a manner inconsistent with the liberal construction
afforded to exemption laws.
Debtor further asserted that the bank account balances represent protected provisions and
recent earnings rather than unrestricted deposits, and that the retirement accounts remain exempt
under Puerto Rico law and 11 U.S.C. § 522(b)(3)(C). He argued that the Trustee’s “eve-of-
bankruptcy conversion” theory does not warrant disallowance of the exemptions absent a proper
avoidance action or proof of fraud. Finally, Debtor contended that any newly advanced theories
are untimely under Fed. R. Bankr. P. 4003(b), that his amendments were made in good faith, and
that they merely clarified overlapping federal and local statutory bases for exemptions.
III. 	APPLICABLE LAW AND DISCUSSION
Upon the filing of a chapter 7 bankruptcy petition, all of debtor's assets become property
of the bankruptcy estate under 11 U.S.C. § 541. However, 11 U.S.C. § 522(b)(1) “allows a
debtor to exempt certain property from the bankruptcy estate that would otherwise be available
for distribution to creditors.” Nealon v. Matthews (In re Nealon), 2016 Bankr. LEXIS 193, at *18
(B.A.P. 1st Cir. Jan. 20, 2016). “A fundamental component of an individual debtor's fresh start in
bankruptcy is the debtor’s ability to set aside certain property as exempt from the claims of
creditors.” Allan N. Resnick and Henry J. Sommer, 4 Collier on Bankruptcy ¶ 522.01 (16th ed.
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2026). “An exemption is an interest withdrawn from the estate (and hence from the creditors) for
the benefit of the debtor.” Ostrander v. Brown (In re Brown), 614 B.R. 416, 423 (B.A.P. 1st Cir.
2020) (quoting Owen v. Owen, 500 U.S. 305, 308, (1991)). “Liberal construction of exemptions
in favor of debtors falls easily within the ambit of the Bankruptcy Code's ‘fresh start’ policy.” In
re Toppi, 378 B.R. 9, 11 (Bankr. D. Me. 2007).
“‘Exemption’ is a term of art in bankruptcy, and . . . while exemption may mean different
things in different contexts, in the context of 11 U.S.C. § 522, it refers to laws enacted by the
legislative branch which explicitly identify property that judgment-debtors can keep away from
creditors for reason of public policy.” In re Corbett, 2013 Bankr. LEXIS 1310, at *5 (Bankr.
W.D. Mo., April 2, 2013) (quoting Benn v. Cole (In re Benn), 491 F.3d 811 (8th Cir. 2007).
“[W]hen a debtor claims a state-created exemption, the exemption's scope is determined by state
law, which may provide that certain types of debtor misconduct warrant denial of the
exemption.” Law v. Siegel, 571 U.S. 415, 425, 134 S. Ct. 1188, 188 L. Ed. 2d 146 (2014) (italics
in original). But, “federal law provides no authority for bankruptcy courts to deny an exemption
on a ground not specified in the Code.” Id. (italics in original). See In re Colon, 2025 Bankr.
LEXIS 852, at *4 (Bankr. D. P.R. April 4, 2025). In other words, the Bankruptcy Code does not
authorize the bankruptcy courts to deny an exemption as a sanction upon finding bad faith
conduct. The United States Supreme Court explained as follows:
Our decision today does not denude bankruptcy courts of the essential “authority
to respond to debtor misconduct with meaningful sanctions. There is ample
authority to deny the dishonest debtor a discharge. See § 727(a)(2)-(6)… In
addition, Federal Rule of Bankruptcy Procedure 9011—bankruptcy’s analogue to
Civil Rule 11—authorizes the court to impose sanctions for bad-faith litigation
conduct, which may include “an order directing payment. . . of some or all of the
reasonable attorneys’ fees and other expenses incurred as a direct result of the
violation.” Fed. Rule Bkrtcy. Proc. 9011(c)(2). The court may also possess further
sanctioning authority under either § 105(a) or its inherent powers. Cf. Chambers
[v. NASCO, Inc.], 501 U. S. [32], at 45-49 [1991], 111 S. Ct. 2123, 115 L. Ed. 2d
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27. And because it arises postpetition, a bankruptcy court’s monetary sanction
survives the bankruptcy case and is thereafter enforceable through the normal
procedures for collecting money judgments. See § 727(b). Fraudulent conduct in a
bankruptcy case may also subject a debtor to criminal prosecution under 18 U. S.
C. §152, which carries a maximum penalty of five years’ imprisonment. But
whatever other sanctions a bankruptcy court may impose on a dishonest debtor, it
may not contravene express provisions of the Bankruptcy Code by ordering that
the debtor’s exempt property be used to pay debts and expenses for which that
property is not liable under the Code.
Law v. Siegel, 571 U.S. at 427-428.
11 U.S.C. § 522(b)(1) provides that a debtor may select the applicable state or the federal
exemptions under § 522 unless a state chooses to “opt out” of the federal exemption scheme,
which is not the case for Puerto Rico. “Debtors who select the federal list waive all state and
nonbankruptcy federal exemptions.” 3 William L. Norton III, Norton Bankr. L. & Prac., 3rd ed. §
56:3 (2026). “The debtor must choose either the state and nonbankruptcy federal list or the
exemptions provided under Code § 522(d); mixing and matching is not permissible.” Id.
Moreover, part 1 of schedule C, which a debtor must use to claim exemptions, allows a debtor to
claim either “state and federal nonbankruptcy exemptions” or “federal bankruptcy exemptions,”
but not both.
As previously noted, at this time, the Trustee is solely objecting to Debtor’s claimed
exemptions over the four IRA accounts and the balances held in three bank accounts. Under Fed.
R. Bankr. P. 4003(c), the Trustee bears the burden of proving that the exemption claimed is
improper and should be disallowed.
The table below compares the original claimed exemptions and the ones claimed on April
11, 2025 in the amended schedule C subject to this order. Dkt. ## 21, 52.
Amended schedule C filed at
Dkt. # 21, pp. 9-11
Amended schedule C filed at
Dkt. # 52, pp. 14-17
Property
description
Value 	Exemption
amount
Exemption
statutory basis
Exemption
amount
Exemption statutory basis
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IRA:
Universal
Life
Insurance
# 3595
$5,000 	$5,000 	Law No. 55-
2020, Title 3,
Ch.
1, Art. 1157(j)
$5,000 	Law No. 55-2020, Title 3,
Ch. 1, Art. 1157(j)
$5,000 	11 U.S.C. § 522(b)(3)(C)
IRA: Cosvi
#0812
$5,000 	$5,000 	Law No. 55-
2020, Title 3,
Ch.
1, Art. 1157(j)
$5,000 	Law No. 55-2020, Title 3,
Ch. 1, Art. 1157(j)
$5,000 	11 U.S.C. § 522(b)(3)(C)
IRA: Banco
Popular de
Puerto Rico
#8363
$5,000 	$5,000 	Law No. 55-
2020, Title 3,
Ch.
1, Art. 1157(j)
$5,000 	Law No. 55-2020, Title 3,
Ch. 1, Art. 1157(j)
$5,000 	11 U.S.C. § 522(b)(3)(C)
IRA:
Oriental
Bank #6147
$5,000 	$5,000 	Law No. 55-
2020, Title 3,
Ch.
1, Art. 1157(j)
$5,000 	Law No. 55-2020, Title 3,
Ch. 1, Art. 1157(j)
$5,000 	11 U.S.C. § 522(b)(3)(C)
Oriental
Bank
Checking
account
# 5079
$247.01 	none 	none 	$247.01 	P.R. Laws Ann. tit. 32, §
1130(2)
$247.01 	Law No. 55-2020, Title 3,
Ch. 1, Art. 1157(h)
PenFed
Credit Union
Savings
Account
$55.04 	none 	none 	$55.04 	P.R. Laws Ann. tit. 32, §
1130(2)
$55.04 	Law No. 55-2020, Title 3,
Ch. 1, Art. 1157(d)
Firstbank
Checking &
Savings
account
# 4692
$2,905.96 	none 	none 	$2,343.37 	15 U.S.C. § 1673
$2,343.37 	P.R. Laws Ann. tit. 32, §
1130(7)
$2,343.37 	P.R. Laws Ann. tit. 31,§
9302(h)
$562.69 	P.R. Laws Ann. tit. 31,§
9302(d)
$562.69 	Law No. 55-2020, Title 3,
Ch. 1, Art. 1157(d)
As reflected above, although Debtor purported to elect the Puerto Rico exemption scheme, his
amended schedule C filed at Dkt. # 52 included both Puerto Rico and Bankruptcy Code statutory
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provisions as the basis for the exemptions claimed in the IRA accounts. Moreover, he asserted,
for the first time, exemptions in the balances held in the bank accounts.
(i) 	Debtor’s motion in limine
In his motion in limine, Debtor requests that the court limit the Trustee’s objection to
exemptions solely to those exemptions newly claimed or amended in the amended schedule C
filed at Dkt. # 52, or alternatively deny the objection based on the de minimis value of the assets
involved. Debtor further argues that the Trustee’s objections to exemptions previously claimed
and unchanged should be disallowed as untimely.
The Trustee opposes the motion, asserting that Debtor failed to identify with specificity
the evidence that should be excluded through the requested motion in limine. The Trustee further
maintains that her objection was properly filed pursuant to Fed. R. Bankr. P. 4003(b) following
Debtor’s amendment to schedule C filed at Dkt. # 52. According to the Trustee, the amendment
not only introduced new exemptions but also added additional statutory basis for exemptions
previously claimed, thereby permitting a renewed challenge.
The court agrees with the Trustee.
Under Fed. R. Evid. 403, the court may exclude relevant evidence “if its probative value
is substantially outweighed by a danger of one or more of the following: unfair prejudice,
confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting
cumulative evidence.” Thus, a motion in limine is intended to exclude specific evidence from
consideration at trial and is not the proper procedural vehicle to resolve the scope or merits of a
substantive objection to exemptions. Debtor’s motion does not identify any evidence that should
be excluded but instead improperly seeks a preemptive ruling restricting the Trustee’s legal
arguments.
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Debtor’s amendment to schedule C introduced additional statutory basis for the IRA
account exemptions and newly asserted exemptions for the bank account balances. Where an
amendment alters the legal basis for a claimed exemption or asserts new exemptions, the trustee
may respond to the exemptions, as amended, pursuant to Fed. R. Bankr. P. 4003(b), which
permits the trustee to object within the applicable period following the filing of the amended
schedules.
Finally, the court declines to deny the Trustee’s objection based on the alleged de
minimis nature of the assets involved, as the exemptions objected to by the Trustee cannot
reasonably be characterized as de minimis.
(ii) 	Debtor’s claimed exemptions over the four IRA Accounts
As previously stated, with respect to the IRA accounts each valued at $5,000, Debtor
initially claimed the exemptions solely under Article 1157(j) of Law No. 55-2020, the Puerto
Rico Civil Code. In the amended schedule C filed at Dkt. # 52, Debtor maintained the same
Puerto Rico statutory basis but added 11 U.S.C. § 522(b)(3)(C) as an additional basis for the
exemption for each IRA account.
The Trustee objects Debtor’s claimed exemption over four IRA accounts listed in
schedule C as follows:
Opening date 	Name of IRA/Account 	Amount 	Applicable year per opening
account documents
June 11, 2024 	Universal Life-3695
FDX Qualified
$5,000.00 	Unknown
June 7, 2024 	Cosvi – 9890
IRA Not exempt
$5,000.00 	2024
June 5, 2024 	Banco Popular -0001
Regular IRA
$5,000.00 	2024
May 18, 2024 	Oriental Bank -6147
Easy IRA
$5,000.00 	2023
Dkt. # 65, at p. 5.
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The Trustee points out that all four IRA accounts were purchased just a few weeks before
the filing of the petition and that Debtor’s intent when purchasing the IRA accounts was to
convert non-exempt funds to exempt funds. The Trustee argues that the IRA accounts must meet
the requirements of the Internal Revenue Code or the Puerto Rico Internal Revenue Code to be
claimed as exempt in bankruptcy and that funds contributed to the accounts in excess of the
authorized limits are subject to additional taxes and are not exempt from taxation, therefore,
cannot be claimed exempt by a debtor under the Bankruptcy Code. Dkt. # 65, p. 7.
The Trustee alleges, as to the IRA accounts, that Debtor cannot claim under both state
and federal exemptions. However, “[i]n addition to exemptions under the laws of the debtor’s
domicile, the debtor is entitled to exempt under section 522(b)(3)(C) retirement funds to the
extent that those funds are in a fund or account that is exempt from taxation under sections 401,
403, 408, 408A, 414, 457 or 501(a) of the Internal Revenue Code.” 5 Collier on Bankruptcy
¶ 522.10. See also In re Roman Rivera, 499 B.R. 175, 190 (Bankr. D. P.R. 2013). “The addition
of 522(b)(3)(C) was intended to expand the protection granted to retirement plans in bankruptcy
that may not have been already protected under state or federal law.” In re Pacheco, 537 B.R.
935, 938 (Bankr. D. Ariz. 2015). Ҥ 522(b)(3)(C) appears in fact to be an explicit minimum for
exemptions involving retirement funds. Nothing suggests, however, that it is the only exemption
now for retirement plans or that a more liberal exemption may not apply. It is simply that a less
liberal exemption will not apply.” Id. at 939 (italics in original). Therefore, a state exemption
may provide a broader protection than the federal exemption scheme but, as to retirement
accounts, it cannot be more restrictive than § 522(b)(3)(C).
Article 1157 of the Puerto Civil Code of 2020 lists the property of a debtor that may not
be seized by a creditor. P.R. Laws Ann. tit. 31, § 9302. Article 1157(j) states that the balance in
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an individual retirement account in the name of the debtor may not be seized. P.R. Laws Ann. tit.
31, § 9302(j) (translation ours). There is no state court jurisprudence discussing this section and
the Puerto Rico Civil Code does not define an individual retirement account. However, Debtor
purchased all four IRA accounts in Puerto Rico. And in Puerto Rico, IRA accounts are financial
instruments created and defined by the Puerto Rico Internal Revenue Code.
Section 30392 of the Puerto Rico Internal Revenue Code defines “individual retirement
account” as follows:
(a) For purposes of this section, the term “individual retirement account” shall
mean a trust created or organized under the laws of the Government of Puerto
Rico for the exclusive benefit of an individual or his/her beneficiaries, or the
share of the individual for his/her exclusive benefit or that of his/her
beneficiaries in a trust created or organized under the laws of the Government
of Puerto Rico, and whose governing instrument states that the participants
shall be those individuals who, through a contract or request to such effect
avail themselves of the provisions of said trust...
P.R. Laws Ann. tit. 13, § 30392.
Also, Section 30392(a) lists eight requirements that should be met for an account to
qualify as an IRA account, and pertinent here, 30392(a)(1) states that any contribution to the
fund must not be in excess of the amount allowed as a deduction pursuant to § 30135(a)(7) per
taxable year on behalf of an individual. P.R. Laws Ann. tit. 13, § 30392(a)(1). Section
30135(a)(7)(B) states that the maximum amount allowed for an individual as a deduction for a
taxable year is five thousand dollars ($5,000) or the adjusted gross income for wages or earnings
attributable to professions or occupations, whichever is less. P.R. Laws Ann. tit. 13, §
30135(a)(7).2
2 The court notes that Law 179-2025 was recently enacted on September 22, 2025 to amend the Puerto Rico Internal
Revenue Code and match the exemptions allowed on IRA accounts in Puerto Rico to the amounts allowed under the
United States Internal Revenue Code.
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As per the definition of an individual retirement account in the Puerto Rico Internal Revenue
Code and its requirements, amounts contributed in excess of those allowed for a taxable year are
not considered individual retirement accounts. Here, Debtor opened four IRA accounts one of
$5,000 for taxable year 2023 and three of 5,000.00 each for taxable year 2024. Therefore, Debtor
opened two IRAs for $5,000.00 each in excess for taxable year 2024. The Trustee alleges that the
contribution of year 2023 was made after Debtor filed his income tax return, and any
contributions made after the April 2024 deadline could only apply to 2024 and therefore was
outside the permissible period for retroactive tax benefit treatment. But the Trustee fails to
explain and support how that affects the IRA contribution or the exemption. In Puerto Rico, tax
returns may be amended and the evidence presented by the Trustee shows that the IRA was
opened for taxable year 2023. Dkt. # 65 at p. 17. The Trustee failed to meet her burden to
establish that this exemption was claimed improperly. Therefore, the objection to the Trustee’s
exemption of Debtor’s IRA account for taxable year 2023 is denied.
As to the 2024 IRAs, Debtor may not claim as exempt the total amount contributed
during year 2024. Debtor may only claim an exemption in the amount of $5,000 for taxable year
2024. Hence, the Trustee’s objection to the additional $10,000 contributed by Debtor in year
2024 is granted. The amounts contributed in excess during year 2024 are not individual
retirement accounts as defined by Puerto Rico Internal Revenue Code and the exemption claimed
for those IRA accounts is disallowed.
The court notes that the Trustee alleges that the exemptions claimed on the IRA accounts
should be denied because the Debtor converted nonexempted assets to exempt assets on the eve
of bankruptcy. The Trustee claims that such transfer was made “fraudulently” but relies
exclusively on the action of converting the assets as an indicator of fraud. However, “[t]he
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legislative history indicates that under section 522, the debtor may convert nonexempt property
into exempt property immediately before the commencement of the case. An eleventh-hour
acquisition of exempt property will not require disallowance of an exemption in the
property.” 4 Collier on Bankruptcy ¶ 522.08. “[ I]ntentional but nonfraudulent conversion of
nonexempt property” is not prohibited by the Bankruptcy Code. Labbadia v. Martin (In re
Martin), 2021 U.S. Dist. LEXIS 80741, at *14 (D. Conn. Apr. 27, 2021). More importantly, even
if this court were to find that this Debtor engaged in improper conduct by converting non-exempt
assets into exempt assets on the eve of bankruptcy, which at this time it cannot, the United States
Supreme Court has stated in the case of Law v. Siegel, 571 U.S. at 415, that whatever sanctions a
bankruptcy court may impose on a dishonest debtor, it may not disallow the exemptions allowed
by the Bankruptcy Code ordering that the debtor’s exempt property be liquidated as non-exempt
funds may be, which is what the Trustee would like this court to do in this case. Id. at 428.
(iii) 	Bank account balances
Regarding the bank accounts, in the amended schedule C filed at Dkt. # 52, Debtor
claimed the balances totaling $3,208.11 exempt under various provisions of Puerto Rico and
federal law, which are addressed below.
a. 	Article 249(2) of the Puerto Rico Code of Civil Procedure (P.R. Laws Ann. tit. 32, §
1130(2))
Debtor claims the balances of his accounts in Oriental Bank ($247.01) and PenFed Credit
Union ($55.04) exempt under Article 249(2) of the Puerto Rico Code of Civil Procedure. This
provision protects from seizure certain basic and essential personal and household items
belonging to a judgment debtor, including household and kitchen furnishings, one sewing
machine, cooking equipment, personal belongings and family items such as clothing, family
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portraits, and artwork created by family members, provisions and food supplies for the individual
or family’s use for one month, and livestock. P.R. Laws Ann. tit. 32, § 1130(2).3
Exemption statutes are generally construed liberally in favor of the debtor to effectuate
their remedial purpose of preserving the debtor’s ability to maintain basic living expenses and
obtain a fresh start. See In re Román Rivera, 499 B.R. at 181. Moreover, “Puerto Rico’s Supreme
Court has ruled that the exemptions afforded in Article 249 of Puerto Rico's Code of Civil
Procedure are repairing in nature, and thus its statutes must be construed in the most liberal light
to effectuate the humanitarian purpose of the lawmaker.” Id. at 183 (quoting Laguna et al. v.
Quiñones, 23 P.R. Dec. 386, 389 (1916)). Nonetheless, the court’s obligation to construe
exemptions liberally does not permit the court to expand the statutory text beyond its clear terms.
Article 249(2) specifically enumerates categories of tangible personal property and basic
subsistence items intended to remain available for the debtor’s household use. The items listed in
subsection (2) reflect the lawmaker’s intent to protect essential household goods and necessities
required for daily living. The statute, however, does not include funds held in bank accounts,
money deposits, or other liquid assets. The absence of any reference to money or bank deposits
indicates that Article 249(2) does not extend to funds held in financial institutions. Moreover,
unlike other subsections of Article 249 that expressly protect certain forms of liquid assets,
subsection (2) is limited to specific types of household goods and provisions.
Accordingly, because the balances held in these accounts constitute funds deposited
rather than the types of tangible household items enumerated in the statute, the court finds that
3 In Puerto Rico, this provision exempts from execution the following: “Necessary household, table and kitchen
furniture belonging to the judgment debtor, including one sewing machine in actual use in the family, or belonging
to a woman, and stove, furniture, beds, bedding and bedsteads, not exceeding in value two hundred (200) dollars,
wearing apparel, hanging pictures, oil paintings and drawings, drawn or painted by any member of the family, and
family portraits and their necessary frames, provisions actually provided for individual or family use sufficient for
one month; one cow with her suckling calf, and one hog with her suckling pigs.” P.R. Laws Ann. tit. 32, § 1130(2).
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these amounts do not fall within the scope of the exemption provided by Article 249(2) of the
Puerto Rico Code of Civil Procedure. Therefore, Debtor’s claimed exemptions under this statute
are denied.
b. 	Article 249 of the Puerto Rico Code of Civil Procedure (P.R. Laws Ann. tit. 32, §
1130(7))
Debtor claims the partial balance of his account in Firstbank ($2,343.37) exempted under
Article 249(7) of the Puerto Rico Code of Civil Procedure. This subsection protects three-fourths
(¾) of a debtor’s earnings from personal services performed within the thirty (30) days prior to a
levy of execution or attachment. P.R. Laws Ann. tit. 32, § 1130(7).4 The Trustee opposes stating
that Debtor has failed to show that the estate is a third-party creditor trying to garnish his wages
but is rather the owner of the funds. The court agrees with the Trustee.
The protection afforded by Article 249(7) is limited in scope. By its plain language, the
provision regulates the amount of wages that a judgment creditor may seize through post-
judgment collection mechanisms such as garnishment or attachment. The statute does not create
a general exemption for monies held in a bank account, nor does it shield wages from becoming
property of the bankruptcy estate. See, e.g. In re Johnson, 593 B.R. 331, 338 (Bankr. D. N.M.
2018) (holding that New Mexico’s garnishment statute applied only to wages or salary due to the
debtor by their employer and did not apply to those wages or salary once they were paid to the
debtor); In re Adcock, 264 B.R. 708, 711 (D. Ka. 2000) (concluding that Kansas wage
garnishment restrictions apply only to wages before they are paid to the debtor).
4 In Puerto Rico, this provision exempts from execution the following: “Three-fourths (¾) of the earnings of the
judgment debtor for personal services rendered at any time within thirty (30) days next preceding the levy of
execution, or levy of attachment, when it appears by the debtor’s affidavit, or otherwise, that such earnings are
necessary for the use of his family residing in this Commonwealth, supported wholly or in part by his labor.” P.R.
Laws Ann. tit. 32, § 1130(7).
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As argued by the Trustee, upon the filing of a bankruptcy petition, all legal or equitable
interests of the debtor in property become property of the estate, including funds held in bank
accounts. 11 U.S.C. § 541(a)(1). Once the petition is filed, the Trustee becomes the
representative of the estate and administers those assets for the benefit of creditors. 11 U.S.C. §§
323, 704. The Trustee is therefore not a third-party creditor attempting to garnish wages, but
rather the statutory administrator of property that already belongs to the estate. As such,
Debtor’s claimed exemption under Article 249(7) of the Puerto Rico Code of Civil Procedure is
denied.
c. 	Law No. 55-202, Title 3. Ch.1, Art. 1157(h) (P.R. Laws. Ann tit. 31, § 9302(h))
Debtor claims the partial balance of his account in Firstbank ($2,343.37) exempted under
P.R. Laws. Ann tit. 31, § 9302(h) and the balance of his account in Oriental Bank ($247.01)
exempted under Law No. 55-202, Title 3. Ch.1, Art. 1157(h). These citations refer to the same
statutory provision, with the latter representing the section as enacted in Law No. 55-202 and the
former corresponding to its codified version in the Puerto Rico Laws Annotated for the 2020
Puerto Rico Civil Code.
This provision exempts three-fourths (¾) of the wages or professional fees earned by the
debtor within the thirty (30) days prior to the issuance of a garnishment or attachment order, if it
is shown, through a sworn written statement by the debtor or otherwise, that such income is
necessary for the debtor’s or their family’s support, when the family depends wholly or partially
on the debtor’s work. P.R. Laws. Ann tit. 31, § 9302(h) (translation ours). This exemption is
likewise inapplicable. The Trustee is not a third-party creditor trying to garnish Debtor’s wage
and the funds held in the bank accounts became property of the bankruptcy estate upon the filing
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of the petition. Therefore, Debtor’s claimed exemption under Law No. 55-202, Title 3. Ch.1,
Art. 1157(h), P.R. Laws. Ann tit. 31, § 9302(h), is also denied.
d. 	Law No. 55-202, Title 3. Ch.1, Art. 1157(d) (P.R. Laws. Ann tit. 31, § 9302(d))
Debtor claims the balance of his account in Oriental Bank ($247.01) and the partial
balance of his account in PenFed ($562.69) exempt under Law No. 55-202, Title 3. Ch.1, Art.
1157(d). Like Article 249(2) of the Puerto Rico Code of Civil Procedure, P.R. Laws Ann. tit. 32,
§ 1130(2), Article 1157(d) also exempts food and provisions that are intended for the individual
or family’s use, provided they are in an amount sufficient for one month. P.R. Laws. Ann tit. 31,
§ 9302(d) (translation ours). Again, this provision does not mention liquid assets or funds held in
a bank account. Thus, these exemptions are denied.
e. 	15 U.S.C. § 1673
Debtor claims the partial balance of his account in Firstbank ($2,343.37) exempted under
15 U.S.C. § 1673. That statute is part of the Consumer Credit Protection Act and limits the
amount of a person’s disposable earnings that may be garnished during any given workweek.
Specifically, the statute provides that the maximum amount that may be garnished is the lesser
of: twenty-five percent (25%) of the individual’s disposable earnings for that week, or the
amount by which the individual’s disposable earnings exceed thirty times the federal minimum
hourly wage under 29 U.S.C. § 206(a)(1).
However, courts have held that 15 U.S.C. § 1673 does not operate as a bankruptcy
exemption. See, In re Bloomstein, 2010 Bankr. LEXIS 3942, at *5 (Bankr. D. Mass. Nov. 5,
2010) (“15 U.S.C. § 1673 restrains the seizure of wages but does not establish an exemption
applicable to bankruptcy cases.”). See also, Smith v. Frazier, 421 B.R. 513, 518 (S.D. Ill. 2009)
(noting that once debtors file for bankruptcy, “the Bankruptcy Code and applicable state and
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federal property exemption statutes governed their rights and remedies-not the limitation on
garnishment of wages contained in 15 U.S.C. § 1673.”). Therefore, Debtor’s exemption claimed
under 15 U.S.C. § 1673 as to the partial balance of Debtor’s account in Firstbank ($2,343.37) is
also denied.
IV. 	CONCLUSION
For the foregoing reasons, Debtor’s motion in limine (Dkt. # 70) is denied.
The Chapter 7 Trustee’s objection to Debtor’s claimed exemptions over the IRA accounts
(Dkt. ## 24, 31, 65, 74) is partially sustained and Debtor’s exemptions are allowed in part and
denied in part. Specifically, Debtor’s claimed exemptions over the IRA accounts for taxable year
2023 ($5,000) and 2024 ($5,000) are allowed. However, the amounts contributed in excess of
$5,000 during year 2024 are not individual retirement accounts as defined by Puerto Rico
Internal Revenue Code and thus the exemptions claimed for two IRA accounts for $5,000 each
opened in 2024 are disallowed.
Moreover, the Chapter 7 Trustee’s objection to Debtor’s claimed exemptions over the
bank account balances (Dkt. ## 65, 74) is sustained. Debtor’s claimed exemptions over the bank
account balances in his Oriental Bank, PenFed Credit Union, and Firstbank Puerto Rico accounts
totaling $3,208.11 are disallowed.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 27th day of March 2026.
María de los Ángeles González
United States Bankruptcy Judge
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