Opinion

SIGNED THIS: March 11, 2026

Peter W. Henderson

Chief United States Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT

CENTRAL DISTRICT OF ILLINOIS

In re:

RANDOLPH NEIL CHAPMAN Case No. 25-80843

and SHERYL E. CHAPMAN,

Debtors.

OPINION

Everyone in Illinois is entitled to an estate of homestead in their residence up to a

certain value (until recently, $15,000). 735 ILCS 5/12-901. The homestead estate is

broadly exempt from liability for debts. Id. When the homestead is sold, the proceeds of

the estate are also exempt for one year. 735 ILCS 5/12-906. And if the proceeds are

reinvested in anew homestead, they are entitled to the same exemption as the original

homestead. Id.

The Debtors in this Chapter 13 case sold their homestead in May 2025. When

they filed their bankruptcy petition in November 2025, money representing the

proceeds of the homestead estate was still in their bank accounts. They have claimed a

$30,000 exemption ($15,000 each) in that money under §12-906. The Chapter 13 Trustee

objects to the exemption on two grounds. First, she argues the proceeds are not exempt

under state law, even within one year of the sale, because the Debtors do not intend to

reinvest the money in a new homestead. Second, even if the proceeds are exempt now,

they would not be exempt in May 2026, and the bankruptcy case will still be open then,

so the money should be available for distribution to creditors. Both arguments are

supported by decisions of this Court. In re Ziegler, 239 B.R. 375 (Bankr. C.D. Ill. 1999)

(Altenberger, J.); In re Stewart, 452 B.R. 726 (Bankr. C.D. Ill. 2011) (Perkins, J.).

The objection will be overruled for largely the same reasons given in a third

decision of this Court. In re Awayda, 574 B.R. 692 (Bankr. C.D. Ill. 2017) (Gorman, J.).

Under Illinois law, the proceeds were exempt in November 2025. Under federal law,

exemptions in bankruptcy are measured on the date the petition is filed. The Debtors,

who filed their petition in November 2025, are therefore entitled to exempt the

proceeds. Nothing in Chapter 13, as opposed to Chapter 7, alters that conclusion.

Background

Randolph and Sheryl Chapman are retired and subsist on Social Security and

pension income. They sold the house they owned in Joliet, Illinois, in May 2025, and

they now rent an apartment in Milan, Illinois. The house sold for $349,000, of which

they received about $100,000 after the mortgage and closing costs were paid. When they

filed their Chapter 13 bankruptcy petition in November 2025, they held $15,000 in a

checking account and $25,000 in an 18-month certificate of deposit. The Debtors claimed

an exemption in $30,000 of that money as proceeds of a homestead sale under the

Illinois homestead exemption, 735 ILCS 5/12-906. The Chapter 13 Trustee objects to the

claim of exemption.

The Debtors propose in their Chapter 13 plan to make monthly payments of $725

over 36 months, for a total of $26,100. No secured claims are provided for. After

deducting attorney and trustee fees, about $20,000 will be paid to unsecured creditors,

who have filed $100,000 worth of claims. The Chapter 13 Trustee objects to confirmation

of the plan under 11 U.S.C. §1325(a)(4), also known as the “best interest of creditors”

test. Should her objection to the homestead exemption be sustained, at least $30,000

would have to be paid into the plan because that amount would be paid to unsecured

creditors if the Debtors’ estate were liquidated under Chapter 7.

The Court has jurisdiction to resolve the objection to the claim of exemption. 28

U.S.C. §157(a), (b)(1), (b)(2)(B); 28 U.S.C. §1334; see ILCD LR 40.2.

Discussion

An exemption is an interest withdrawn from the bankruptcy estate (and hence

the creditors) for the benefit of the debtor. Owen v. Owen, 500 U.S. 305, 308 (1991).

Section 522 of the Bankruptcy Code determines what property a debtor may exempt. Id.

Illinois has opted out of the federal exemptions, 735 ILCS 5/12-1201, so a bankruptcy

debtor here may exempt any property that is exempt under Illinois law in effect on the

date of the filing of the petition. 11 U.S.C. §522(b)(2), (b)(3)(A). Property exempted

under §522 is (with some exceptions not relevant here) immunized during and after the

case against liability for prebankruptcy debts. Owen, 500 U.S. at 308; 11 U.S.C. §522(c).

The Trustee’s arguments raise one issue of state law and two issues of federal

law. To resolve her objection, I must (1) determine whether the Debtors’ $30,000 was

exempt under state law in effect in November 2025, and, if so, (2) determine whether

that exemption shields the money from creditors (A) in bankruptcy in general, and

(B) in Chapter 13 in particular.

I. Under Illinois law, homestead proceeds are exempt for one year.

The first determination requires me to interpret state law. Given the lack of an

authoritative decision by an Illinois court on the issue presented, I must guess how a

state court would interpret the homestead exception. See Giovanelli v. Walmart Inc., 164

F.4th 1052, 1054–55 (7th Cir. 2026). That requires following principles of statutory

interpretation as articulated by the Illinois Supreme Court. Shipley v. Chicago Bd. of

Election Commissioners, 947 F.3d 1056, 1061 (7th Cir. 2020).

Section 12-901 of the Illinois Code of Civil Procedure, as it existed in November

20251, provides that every individual is entitled to an estate of homestead to the extent

of $15,000 of an individual’s interest in property occupied by him or her as a residence.

735 ILCS 5/12-901. Section 12-906 protects the proceeds of that estate when the residence

is sold. It reads, in relevant part, and with a line break added:

1 The homestead statutes were amended to increase the amount of the exemption from $15,000

per owner to $50,000 per owner (for up to 2 owners) on January 1, 2026. The relevant statutes

are otherwise unchanged. Citations to the homestead statutes in this opinion refer to those in

effect in November 2025. See 11 U.S.C. §522(b)(3)(A).

When a homestead is conveyed by the owner thereof, … the proceeds

thereof, to the extent of the amount of $15,000, shall be exempt from

judgment or other process, for one year after the receipt thereof, by the

person entitled to the exemption,

and if reinvested in a homestead the same shall be entitled to the same

exemption as the original homestead.

735 ILCS 5/12-906.

The primary goal of statutory interpretation in Illinois is to “ascertain and give

effect to the intent of the legislature.” Rainey v. Retirement Bd. of Policemen’s Annuity and

Benefit Fund of City of Chicago, 2025 IL 131305 ¶12 (2025). A statute’s text, if

unambiguous, must be applied without resort to other aids of statutory construction,

because a “statute’s plain language is the best indicator of legislative intent.” Id. I

conclude below that the statute’s text is unambiguous, so the plain meaning controls:

proceeds are unconditionally exempt for one year. Lest there be doubt, the plain

meaning is consistent with other states’ approaches and the history of the legislation.

A. The plain language of §12-906 does not require an intent to reinvest.

Proceeds from the sale of a homestead are plainly exempt for one year. Awayda,

574 B.R. at 698–99; Stewart, 452 B.R. at 736. “If [the proceeds are] derived from a sale of

the homestead, and represent[] that estate, the spirit of the statute exempts [them] for

one year.” Watson v. Saxer, 102 Ill. 585, 592 (1882). And if the proceeds are reinvested in

a new homestead, then they will retain their exempt status. Cochran v. Cutler, 350 N.E.2d

59, 63 (Ill. App. Ct. 1976). The statute contains two provisions that address separate

issues and do not conflict with each other. Under a plain reading, the Debtors’ $30,000

was exempt in November 2025 because it was derived from the sale of the homestead,

which occurred within one year, and it represented that estate. The language about

reinvesting the proceeds is simply inapplicable here.

Judge Altenberger concluded that “[a]lthough §12-906 does not specifically

require that the debtor intend to use the proceeds to acquire another homestead, …

such a requirement [is] implicit in the statute.” Ziegler, 239 B.R. at 378. With respect, that

conclusion does not follow from Illinois rules on statutory interpretation. Illinois courts

do not depart from the plain language and meaning of a statute by reading into it

exceptions, limitations, or conditions that the legislature did not express. People v. Reed,

2025 IL 130595 ¶26 (2025); see Matter of Robinson, 811 F.3d 267, 272 (7th Cir. 2016)

(refusing to “read a restriction” into Illinois exemption statute).

The strongest argument under Illinois interpretive rules to support Ziegler’s

conclusion would rely on the idea that an ambiguity may exist when the legislature is

silent on an issue that implicates the statute’s purpose. People v. Marshall, 950 N.E.2d

668, 674 (Ill. 2011). And the purpose of §12-906, according to Ziegler, is to protect

proceeds until they may be reinvested in a new homestead. 239 B.R. at 379. But on this

subject the legislature was not silent, it was explicit: proceeds are exempt for one year.

Ziegler relied upon an analogy to Florida law to read an intent requirement into §12-906.

Id. at 378–79. But as discussed below, Florida’s homestead provision actually is silent on

the treatment of proceeds, while §12-906 is not. Because there is no ambiguous silence, it

would be inappropriate to read additional terms into the statute.

This is also not an instance in which the statute is ambiguous because it is

“capable of being understood by reasonably well-informed persons in two or more

different ways.” People v. Brown, 2026 IL 130930 ¶46 (Ill. 2026). Despite their differences,

my three colleagues have all understood that the plain text does not include an intent-

to-reinvest requirement. Their disagreements have to do with the purpose of the statute

and how federal bankruptcy law should incorporate that purpose; they do not

understand the statutory language itself in different ways.

Relying on plain language can be unsatisfying, even if it makes things simple.

For a better understanding as to why §12-906’s plain text is not potentially ambiguous

or absurd, it helps to know about state homestead exemptions in general and the

history of §12-906 in particular.

B. The plain language of §12-906 is consistent with other states’ laws.

Illinois is not alone in providing exemptions for homesteads. Although the

common law recognized exemptions for certain real and personal property, the

homestead exemption is an American statutory innovation. Haskins, Homestead

Exemptions, 63 Harv. L. Rev. 1289, 1289 (1950). Most states have a homestead exemption,

and each state’s homestead exemption may differ based upon statutory text or judicial

attitudes towards the exemption. Id. at 1290–91.

1. Some states make no provision for the proceeds of voluntary homestead

sales. Naturally, some of those states do not exempt homestead proceeds. E.g., In re

Mason, 607 B.R. 360, 365–66 (Bankr. N.D. Ga. 2019) (Georgia). Others, like Florida, have

recognized that proceeds ought to be protected even in the absence of statutory

language. See Fla. Const. Art. X §4(a)(1). “In recognition of the liberal interpretation of

the homestead exemption,” the Florida Supreme Court held that proceeds are exempt

“if, and only if, the vendor shows … an abiding good faith intention … to reinvest the

proceeds thereof in another homestead within a reasonable time.” Orange Brevard

Plumbing & Heating Co. v. La Croix, 137 So. 2d 201, 206 (1962). That judicial gloss

expanded the reach of the homestead exemption in Florida. See also Obenshain v.

Obenshain, 480 S.W.2d 567, 568 (Ark. 1972); Millsap v. Faulkes, 20 N.W.2d 40, 41 (Iowa

1945); Schumann v. Davis, 183 N.W. 740, 741 (Mich. 1921).

Other states have specific statutory provisions governing homestead proceeds.

Their approaches vary based primarily on (1) how much time is “reasonable” to exempt

proceeds and (2) whether an intent to reinvest is required to maintain the proceeds as

exempt. On one end, Mississippi protects the proceeds as exempt “in all circumstances.”

Davis v. Lammons, 151 So. 2d 907, 909 (Miss. 1963); see Miss. Code §85-3-49. On the other

end, Oregon and Washington condition the exemption, which lasts one year, on an

intent to reinvest the proceeds in another homestead. ORS §18.395(2); RCW §6.13.070(3);

see also Wis. Stat. §815.20 (two years with intent to reinvest). In the middle are states

like Texas, which exempts proceeds for six months, full stop, Tex. Prop. Code

§41.001(c); London v. London, 342 S.W.3d 768, 775 (Tex. Ct. App. 2011); California, which

does the same unless the debtor claims a homestead exemption on other property

during those six months, Cal. Civ. Proc. Code §704.720(b); and South Dakota, which

keeps the proceeds “absolutely exempt” for one year, S.D. Codified Laws §43-45-3(2).

2. Clearly, the homestead exemption’s purpose, which my colleagues have all

thoroughly discussed, cannot dictate §12-906’s interpretation. All states enacted their

homestead exemptions, broadly speaking, to provide for the security of the family.

Haskins, supra, 63 Harv. L. Rev. at 1289. The stingiest states share that purpose with the

states most generous to debtors. Compare Hardeman v. Downer, 39 Ga. 425 (1869), with

Hill v. Franklin, 54 Miss. 632 (1877). And yet the actual homestead exemptions vary

widely according to the particulars of state law. A number of state legislatures have

agreed with Illinois’ that an unconditional exemption for a certain period of time is

consistent with the purpose behind homestead laws. Section 12-906’s purpose therefore

does not conflict with a plain reading of the statute.

3. That said, the purpose is relevant in one respect. Exemption statutes in

Illinois, like the exemption provision in Florida, are liberally construed in favor of

debtors, not restricted in favor of creditors, due to their remedial nature. Cole v. Marple,

98 Ill. 58, 64 (1880); Matter of Barker, 768 F.2d 191, 196 (7th Cir. 1985) (applying Illinois

law). If a court is to depart from the text of the homestead exemption, its departure

should expand, not restrict, the availability of the exemption. In Florida, legislation did

not extend the homestead exemption to proceeds; the judiciary, by reading in a

protection for proceeds (subject to an intent to reinvest within a reasonable time),

expanded the availability of the exemption. Orange Brevard Plumbing & Heating Co., 137

So. 2d at 206. Section 12-906, by contrast, already protects proceeds for one year; the

judiciary, by reading in an intent to reinvest, would restrict the availability of the

homestead exemption. The lesson from Florida is to apply a liberal construction to the

homestead exemption, not to require an intent to reinvest in all circumstances. Compare

with Ziegler, 239 B.R. at 378–79.

4. Section 12-906 does not just exempt proceeds for one year. It also provides,

in its second clause, that if the proceeds are reinvested in a new homestead “the same

shall be entitled to the same exemption as the original homestead.” A few other states

have comparable provisions, and the clarity in their statutes can help a reader

understand the murkier language in §12-906.

In Iowa, for example, “[w]here there has been a change in the limits of the

homestead, or a new homestead has been acquired with the proceeds of the old, the

new homestead, to the extent in value of the old, is exempt from execution in all cases

where the old or former one would have been.” Iowa Code §561.20. Hawaii’s

homestead exemption is closer still:

The [proceeds] shall be entitled, for the period of six months thereafter, to

the same protection [as the homestead]…. If the defendant, within such

six-month period, applies such proceeds to the purchase of real property,

the date of acquisition and commencement of residence for the purpose of

[the homestead exemption] shall be considered to be the date of the

acquisition of interest in and commencement of residence on the real

property whose sale resulted in such proceeds.

HRS §651-96. Iowa and Hawaii contemplate that (1) people move and (2) the value of

the exemption changes from time to time. In both states, the original homestead is

maintained when those events happen so long as the debtor complies with the statutory

conditions. As I explain below, Illinois follows the same rule.

C. The history of §12-906 reveals why it contains two provisions.

The history of §12-906 shows that its second clause—“and if reinvested in a

homestead the same shall be entitled to the same exemption as the original

homestead”—is to preserve the original homestead in case one moves and the law

changes. It does not affect the unconditional nature of the one-year proceeds exemption.

The original Illinois Homestead Act of February 11, 1851, exempted the

homestead “to the value of one thousand dollars.” The Act concerned involuntary sales

and made no provision for voluntary conveyances. Section 5 of the Act provided that

when a homestead was sold on execution the officer conducting the sale was to pay

“out of the proceeds of such sale … to each execution debtor the said sum of one

thousand dollars, which shall be exempt from execution for one year thereafter.” The

1851 Act did not mention reinvesting those proceeds in a new homestead.

The Illinois Constitution of 1870 directed the general assembly to “pass liberal

homestead and exemption laws.” The legislature thus amended the Homestead Act to

apply to both voluntary and involuntary sales of homesteads. See Watson, 102 Ill. at 592.

Effective July 1, 1872, section 6 of the Act provided:

When a homestead is conveyed by the owner thereof, … the proceeds

thereof, to the extent of the amount of fifteen hundred dollars, shall be

exempt from execution or other process for one year after the receipt

thereof by the person entitled to the exemption.

Act of Mar. 22, 1872 (emphasis added). In short, the exemption amount went up to

$1,500 and the first clause of our modern statute, §12-906, was enacted. (Section 1 of the

Act, now §12-901, provided for an estate of homestead of up to $1,500.) The statute still

said nothing about reinvesting the proceeds.

The General Assembly amended the law just a year later. Effective July 1, 1873,

section 6 of the Homestead Act now provided:

When a homestead is conveyed by the owner thereof, … the proceeds

thereof, to the extent of the amount of one thousand dollars, shall be

exempt from execution or other process for one year after the receipt

thereof by the person entitled to the exemption, and if reinvested in a

homestead the same shall be entitled to the same exemption as the original

homestead.

Act of Apr. 30, 1873 (revisions in italic). Similarly, section 1 reduced the value of the

homestead estate back to $1,000. In short, the second clause of §12-906 was added at the

very same time the legislature reduced the exemption amount from $1,500 to $1,000.

The inference is inescapable: the second clause of §12-906 serves as a saving

clause, not an alteration of the unconditional one-year exemption in homestead

proceeds. In 1873, Illinois did not have a general savings clause; what is now codified at

5 ILCS 70/4 was enacted a year later, in 1874. People v. Glisson, 782 N.E.2d 251, 255 (Ill.

2002). Illinois has always limited the right of the legislature to deprive its citizens of

vested estates, see Henson v. Moore, 104 Ill. 403, 408–09 (1882), and §12-906’s second

clause ensures that the homestead estate cannot be diminished by later legislation. It

also ensures that a person is not stuck in their home if they wish to preserve an older,

more generous exemption. One who acquired a homestead in July 1872 could protect

their $1,500 estate in homestead even if they moved after the 1873 revision to the law.

* * *

The Trustee’s argument that the reinvestment language “suggests that §12-906

was intended to be limited to individuals reinvesting in a replacement homestead” is

not supported by a plain reading of the statute and is belied by the historical record.

Like Hawaii and Iowa, Illinois has chosen to permit a debtor to “grandfather in” an

original homestead’s value even if they move and the law changes. The first clause of

§12-906 unconditionally exempts proceeds for one year, and the second clause permits a

debtor to retain the value of their original homestead estate when they move. The two

clauses address separate issues.

II. Under federal bankruptcy law, a debtor’s exemptions are fixed on the date

they file their bankruptcy petition.

The Debtors’ homestead proceeds were exempt under state law in November

2025. Property that is exempt under state law may be exempted in bankruptcy. 11

U.S.C. §522(b)(1), (b)(3)(A). A debtor’s exemptions are fixed in bankruptcy as of the date

of filing. Awayda, 574 B.R. at 695, citing White v. Stump, 266 U.S. 310, 313 (1924); Owen v.

Owen, 500 U.S. 305, 314 n.6 (1991). Therefore, the homestead proceeds that were exempt

under state law in November 2025 are exempt in this bankruptcy case filed in

November 2025. It is no more complicated than that.

A. Burciaga requires the Court to apply the snapshot rule.

And yet—it is not that simple, according to a number of appellate and trial

courts, including this one in Stewart. The so-called “snapshot” rule of White v. Stump

applies to claims of exemptions. But Judge Perkins articulately explained why the

snapshot rule might not serve the purposes of the homestead-proceeds exemption.

Stewart, 452 B.R. at 739–43. In particular, he noted that the exemption is temporary—it

expires if the proceeds have not been reinvested within one year—and that the purpose

of the exemption under state law was to provide a one-year bridge between homes. Id.

Creditors who wait a year to collect face no obstacle under §12-906 when a debtor does

not reinvest the proceeds, so why should a bankruptcy trustee be prevented from ever

collecting even when a year has passed without reinvestment? Id.

Judge Perkins did not stand alone in his view. Remember that Texas has a

straightforward exemption scheme: homestead proceeds are exempt for six months, full

stop. Tex. Prop. Code §41.001(c). The Fifth Circuit recognized that proceeds could not

be reached for six months under state law. In re Zibman, 268 F.3d 298, 305 (5th Cir. 2001).

And yet it denied an exemption to debtors who filed their bankruptcy petition about

two months after selling their homestead. Id. at 300–01. The court framed its decision as

applying “the entire Texas law that is applicable.” Id. at 304. Because the state only

“freezes” the proceeds for six months, a bankruptcy court cannot freeze them

indefinitely. Id.; see also In re Golden, 789 F.2d 698, 700 (9th Cir. 1986) (same in

California). The Fifth Circuit has more recently twisted itself into knots trying to

distinguish Zibman, see Matter of Hawk, 871 F.3d 287, 293–96 (5th Cir. 2017), but it

remains good law in that jurisdiction.

The Seventh Circuit, by contrast, adheres to the snapshot rule because federal

law, not state law, governs bankruptcy exemptions. Matter of Burciaga, 944 F.3d 681

(2019). It describes the straightforward rule:

What is exempt, and what is not, depends on the state of affairs when

bankruptcy begins. 11 U.S.C. §522(b)(3)(A); Owen v. Owen, 500 U.S. 305,

314 n.6 (1991) []; White v. Stump, 266 U.S. 310, 313 (1924) []. Like most other

states, Illinois exempts some of a home’s value and some of an auto’s

value. If a person sells a car for cash and files for bankruptcy the next day,

creditors can reach the cash; the estate never had a car that could be

exempt.

Property vests in the estate on the day bankruptcy begins. 11 U.S.C.

§541(a)(1). This is the property available to satisfy creditors’ pre-filing

claims. 11 U.S.C. §522(c). If the debtor has cash on that day, its treatment

depends on how much cash a state exempts. If the debtor has a car on that

day, its treatment depends on how much of a car’s value the state

exempts. And, if a debtor has a wage claim, how much the creditors can

reach depends on how the state treats unpaid wages.

We must assess the legal effect of things as they were when this

bankruptcy began, not as they might have been. That a car may be sold

while bankruptcy is under way does not make all of the proceeds

available to satisfy pre-bankruptcy claims; the debtor retains any

exempted amount. See, e.g., … Pasquina v. Cunningham, 513 F.3d 318, 324

(1st Cir. 2008).

Burciaga, 944 F.3d at 684–85. To the extent that the application of state exemption

statutes in federal court produces inequitable results, that is a matter for Congress,

because “the Bankruptcy Code is what it is and cannot be overridden in the name of

equity.” Id. at 685, citing Law v. Siegel, 571 U.S. 415 (2014). Burciaga confirms that Judge

Gorman’s approach in Awayda was correct. That an exempt asset may lose its exempt

character while bankruptcy is under way does not make it available to satisfy pre-

bankruptcy claims. Burciaga, 944 F.3d at 685; see also In re Rockwell, 590 B.R. 19, 28–29

(Bankr. D. Me. 2018) (relying on Cunningham).

The idea that an exception to the snapshot rule should exist because of the

purpose behind the Illinois homestead exemption, see Stewart, 452 B.R. at 741–42, is a

non-starter after Burciaga. Section 522 asks only what is exempt under state law at the

time of the petition, not what state legislators intended or understood would happen in

federal court. 944 F.3d at 683–84. Burciaga also dispatched with the rationale that led the

Fifth Circuit astray in Zibman. “[E]xemption in bankruptcy happens as a result of §522,

not as a result of state legislators’ plans or desires or understanding.” Burciaga, 944 F.3d

at 683–84.

Though Burciaga is binding precedent, it would not bind if it conflicted with

Supreme Court authority. Zibman suggests that applying the snapshot rule here would

run afoul of Myers v. Matley, 318 U.S. 622 (1943). But Zibman mangled the holding of

Myers by thinking that post-petition events may alter a debtor’s right to a homestead

exemption. 268 F.3d at 303–04. In fact, Myers held the opposite. The debtor’s right to a

homestead there was established under state law on the date his petition was filed. A

later act to vindicate that right “did not change” the “relative status of the claimant and

the trustee,” so it was allowed. 318 U.S. at 628. Contrast with White v. Stump, where the

debtor’s homestead right was not established under state law on the date his petition

was filed, so he was not entitled to an exemption based upon a later attempt to claim

the right. 266 U.S. at 311, 313. Here, under Illinois law, the Debtors had a right on the

date they filed their petition to exempt homestead proceeds. Under both Myers and

White, they are therefore entitled to an exemption under federal bankruptcy law.

Section 12-906 is no different from any other exemption. All exemptions are

conditional in this ephemeral world. No one knows what tomorrow will bring. The

snapshot rule accepts that truth and chooses a particular point in time to fix the debtor’s

rights and obligations. “When the law speaks of property which is exempt and of rights

to exemptions, it of course refers to some point of time.” White, 266 U.S. at 313. That

point of time under federal bankruptcy law is the filing of the petition. 11 U.S.C.

§522(b)(3)(A); Burciaga, 944 F.3d at 684. Creditors under state law were unable to reach

the Debtors’ $30,000 in November 2025; creditors under federal bankruptcy law are

treated the same. 11 U.S.C. §522(c).

B. Chapter 13 is no different than Chapter 7 when it comes to exemptions.

The Trustee finally points out that all cases mentioned so far arose under

Chapter 7. She notes that Judge Gorman’s reliance on the snapshot rule was in part

based upon the need to efficiently administer cases “in Chapter 7.” Awayda, 574 B.R. at

696. Chapter 13, by contrast, lasts for three to five years, 11 U.S.C. §1322(d). It would be

simple, the Trustee argues, to determine whether the proceeds are reinvested within a

year in Chapter 13 cases; and if they are not, the proceeds should be made available to

creditors lest the debtors retain $30,000 that they would not have been able to keep

away from creditors after one year.

Section 522 applies equally in Chapter 7 and Chapter 13. 11 U.S.C. §103(a).

Burciaga interprets §522 and that interpretation is binding in both chapters. In addition,

exemptions are relevant in Chapter 13 only under 11 U.S.C. §1325(a)(4). Chapter 13

debtors remain in possession of both exempt and nonexempt property throughout the

case. 11 U.S.C. §1306(b). A debtor who exempts nothing still keeps all their property.

Exemptions affect only a debtor’s monthly payments. Section 1325(a)(4) requires that

the payments leave unsecured creditors no worse off in Chapter 13 than they would

have been under Chapter 7. That “best interest of creditors” test analyzes the petition as

if it were filed under Chapter 7, which of course is subject to the snapshot rule

articulated in Burciaga, as discussed above.

The Trustee also notes that Chapter 13 also contains a good-faith requirement.

See 11 U.S.C. §1325(a)(3), (a)(7). She has not yet objected to confirmation of the plan on

good-faith grounds, so I do not resolve here whether the Debtors’ plan was filed in

good faith. But I am skeptical that I could find that a debtor who does nothing more

than take an exemption they are legally entitled to is not acting in good faith. The “focus

of the good faith inquiry” is whether, under the totality of the circumstances, “the filing

is fundamentally fair in a manner that complies with the spirit of the Bankruptcy Code’s

provisions.” Matter of Love, 957 F.2d 1350, 1357 (7th Cir. 1992). It is not whether the

debtor is committing every resource they possibly could—including exempt assets that

are not liable during or after the case for any prepetition debt, §522(c)—to fund their

plan. See Matter of Smith, 848 F.2d 813, 820 (7th Cir. 1988); cf. In re Jones, 73 Bankr. Ct.

Dec. 218, 2024 WL 4229130, at *5 (Bankr. C.D. Ill. 2024) (Henderson, J.), citing Anderson

v. Cranmer, 697 F.3d 1314, 1319 (10th Cir. 2012).

“Good faith” is often invoked the same way 11 U.S.C. §105(a) is invoked when

application of the Bankruptcy Code yields—in the view of a party or a judge—an

unsatisfactory answer. Section 105(a) does not provide a reason to depart from the

detailed exemption scheme of §522, and I see no reason why the good-faith

requirements of §1325 would do so either. “Section 522 does not give courts discretion

to grant or withhold exemptions based on whatever considerations they deem

appropriate.” Law, 571 U.S. at 423. To the extent that the Trustee argues that the

Debtors’ exemption should be denied in Chapter 13 because of the good faith

requirement, I disagree. Section 522, which governs exemptions, means the same thing

in Chapter 13 as it does in Chapter 7.

The objection to the Debtors’ claim of exemption is OVERRULED.

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