The opinion
USCA11 Case: 20-12823 Date Filed: 01/24/2022 Page: 1 of 10
[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 20-12823
____________________
In re: TIMOTHY RUSSELL HOFFMAN,
Debtor.
___________________________________________________
TIMOTHY RUSSELL HOFFMAN,
Plaintiff-Appellant,
versus
SIGNATURE BANK OF GEORGIA,
Defendant-Appellee.
USCA11 Case: 20-12823 Date Filed: 01/24/2022 Page: 2 of 10
2 Opinion of the Court 20-12823
____________________
Appeal from the United States District Court
for the Northern District of Georgia
D.C. Docket No. 3:19-cv-00095-TCB
____________________
Before WILSON, LAGOA, and ED CARNES, Circuit Judges.
WILSON, Circuit Judge:
Appellant-Debtor Timothy Hoffman appeals the district
court’s affirmance of the bankruptcy court’s order granting Appel-
lee-Creditor Signature Bank of Georgia’s (the Bank) objection to
Hoffman’s claimed bankruptcy estate exemptions. The Bank ob-
jected to Hoffman’s claimed exemptions of various retirement ac-
counts. The bankruptcy court granted the Bank’s objections as to
Hoffman’s Roth Individual Retirement Accounts (IRA), concluding
that Roth IRAs—unlike traditional IRAs and 401(k) accounts—are
not excluded from bankruptcy estates. The district court affirmed
the bankruptcy court’s order.
This appeal presents an issue of first impression for this
court: Are Roth IRAs excluded from Georgia debtors’ bankruptcy
estates pursuant to federal law? Because we answer the question in
the affirmative, we reverse the district court’s affirmance of the
bankruptcy court’s order and remand for further proceedings con-
sistent with this opinion.
USCA11 Case: 20-12823 Date Filed: 01/24/2022 Page: 3 of 10
20-12823 Opinion of the Court 3
I.
Timothy Hoffman is a retired U.S. Air Force Colonel and
private pilot. Hoping to help his son-in-law pursue his dream of
opening a restaurant, Hoffman guaranteed a loan of approximately
$432,000 with the Bank. The restaurant ultimately failed, resulting
in Hoffman defaulting on his loan from the Bank and filing for
Chapter 7 bankruptcy.
In his bankruptcy schedules, Hoffman disclosed an interest
in the following retirement accounts: (1) Traditional IRA, (2) Roth
Conversion IRA, (3) Roth Contributory IRA, and (4) Fidelity
401(k). Hoffman claimed all of the accounts as exempt on his bank-
ruptcy Schedule C. 1
The Bank filed an objection in the bankruptcy court to Hoff-
man’s claimed exemptions, asserting that his retirement accounts
either were not qualified retirement plans or did not otherwise
qualify as exempt. In reply, Hoffman maintained that all of his re-
tirement accounts are legally exempt. Specifically regarding the
Roth IRAs, Hoffman asserted that they either were excluded from
the estate pursuant to 11 U.S.C. § 541(c)(2), or, if not excluded,
1 One of the many forms a debtor has to complete when filing for bankruptcy
is Schedule C: The Property You Claim as Exempt. Schedule C is where debt-
ors list all of the legally exempt property that they want to keep.
USCA11 Case: 20-12823 Date Filed: 01/24/2022 Page: 4 of 10
4 Opinion of the Court 20-12823
were exempt under O.C.G.A. § 44-13-100(a)(2)(E). 2 As to exclusion,
Hoffman argued that Georgia’s revised garnishment statute applies
to Roth IRAs. Accordingly, Hoffman contended that the court
should revisit precedent analyzing a prior version of Georgia’s gar-
nishment statute—a version that applied only to traditional IRAs.
The bankruptcy court entered a final order overruling the
Bank’s objections as to Hoffman’s traditional IRA and 401(k) ac-
count but sustaining the objections as to Hoffman’s two Roth IRAs.
Regarding Hoffman’s Roth IRAs, the bankruptcy court acknowl-
edged that Georgia’s garnishment statute underwent an expansive
overhaul but noted that there appeared to be no recent authority
addressing the contention that Roth IRAs should be excluded un-
der § 541(c)(2). 3
2Pursuant to 11 U.S.C. § 522(b)(2), Georgia has opted out of the federal bank-
ruptcy estate exemptions, and O.C.G.A. § 44-13-100 governs the exemptions
available to a debtor in bankruptcy in Georgia.
3 The bankruptcy court also found that a Roth IRA is exempt under O.C.G.A.
§ 44-13-100(a)(2)(E), but only to the extent that it is reasonably necessary for
the support of the debtor and his dependents. The court concluded that Hoff-
man’s Roth IRAs were not exempt under state law, and thus properly included
in the estate, because the funds were not reasonably necessary to support him
and his wife. Hoffman does not take issue with this alternative finding on ap-
peal. Instead, Hoffman argues only that his Roth IRAs should be excluded
from the bankruptcy estate pursuant to federal law (11 U.S.C. § 541(c)(2))—
not that they should be exempt under state law (O.C.G.A. § 44-13-
100(a)(2)(E)).
USCA11 Case: 20-12823 Date Filed: 01/24/2022 Page: 5 of 10
20-12823 Opinion of the Court 5
Hoffman appealed the bankruptcy court’s ruling that the un-
distributed funds in his Roth IRAs are not excluded from his bank-
ruptcy estate. The district court agreed with the bankruptcy court’s
assessment, declining to rule otherwise on an issue of first impres-
sion. Hoffman timely appealed.
This appeal requires us to determine what is properly in-
cluded in, and excluded from, the property of a bankruptcy estate.
After a careful review of the record and with the benefit of oral
argument, we reverse the ruling of the district court. Statutory in-
terpretation as well as the development of caselaw in this area con-
vince us that IRAs—whether they be traditional IRAs or Roth
IRAs—are excluded from the bankruptcy estates of Georgia debt-
ors pursuant to the Bankruptcy Code and Georgia’s garnishment
statute. This conclusion follows naturally from the applicable law
and statutory amendments, an overview of which we provide be-
low.
II.
We act as a second court of review in bankruptcy appeals,
independently examining the factual and legal determinations of
the bankruptcy court and applying the same standard of review as
the district court. In re Brown, 742 F.3d 1309, 1315 (11th Cir. 2014).
When, as here, the district court affirms the bankruptcy court’s or-
der, we consider the bankruptcy court’s decision directly. Id. Be-
cause the sole issue in this case is a pure question of law—the
proper construction and interpretation of the Bankruptcy Code—
USCA11 Case: 20-12823 Date Filed: 01/24/2022 Page: 6 of 10
6 Opinion of the Court 20-12823
we conduct a de novo review. See In re Meehan, 102 F.3d 1209,
1210 (11th Cir. 1997).
III.
The Bankruptcy Code provides that property of a bank-
ruptcy estate includes “all legal or equitable interests of the debtor
in property as of the commencement of the case.” 11 U.S.C.
§ 541(a)(1). The Code, however, “excludes from the bankruptcy es-
tate property of the debtor that is subject to a restriction on transfer
enforceable under ‘applicable nonbankruptcy law.’” Patterson v.
Shumate, 504 U.S. 753, 755 (1992) (quoting § 541(c)(2)). “[A]pplica-
ble nonbankruptcy law” has been interpreted to include “any rele-
vant nonbankruptcy law”—whether it be federal or state law. Id.
at 759.
On appeal, Hoffman contends that his Roth IRAs should be
excluded from his estate pursuant to 11 U.S.C. § 541(c)(2). Section
541(c)(2) provides that “[a] restriction on the transfer of a beneficial
interest of the debtor in a trust that is enforceable under applicable
nonbankruptcy law is enforceable in a case under this title.” Thus,
a debtor’s property is excluded from his bankruptcy estate pursuant
to § 541(c)(2) if three elements are met: (1) the debtor has “a bene-
ficial interest in a trust”; (2) the interest has a restriction on transfer;
and (3) the restriction is enforceable under either state or federal
law. See id.; see also In re Upshaw, 542 B.R. 619, 622 (Bankr. N.D.
Ga. 2015).
USCA11 Case: 20-12823 Date Filed: 01/24/2022 Page: 7 of 10
20-12823 Opinion of the Court 7
The relevant state law here is the exemptions provision of
Georgia’s garnishment statute, O.C.G.A. § 18-4-6 (exemptions pro-
vision). Georgia’s current exemptions provision provides that
“[c]ertain earnings or property” may be exempt from the process
of garnishment. Id. § 18-4-6(a)(1). One such example of exempt
property concerns funds from an IRA: “Funds or benefits from an
individual retirement account or from a pension or retirement pro-
gram shall be exempt from the process of garnishment until paid
or otherwise distributed to a member of such program or benefi-
ciary thereof.” Id. § 18-4-6(a)(2).
We have found that the prior version of the exemptions pro-
vision, § 18-4-22(a), 4 “clearly constitutes ‘applicable nonbankruptcy
law’” and that the prohibition on garnishment is an enforceable re-
striction on transfer for the purposes of 11 U.S.C. § 541(c)(2). See
Meehan, 102 F.3d at 1211–12. We therefore concluded that an IRA
established under 26 U.S.C. § 408—a traditional IRA—is excluded
from a debtor’s estate under § 541(c)(2) because it is exempt from
garnishment pursuant to Georgia law. Id. at 1211–14.
At the time that we decided Meehan, traditional IRAs were
the only type of IRAs in existence. It was not until the following
4 The prior version of the exemptions provision provided that “funds or bene-
fits from an individual retirement account as defined in Section 408 of the
United States Internal Revenue Code of 1986, as amended, shall be exempt
from the process of garnishment until paid or otherwise transferred to a mem-
ber of such program or beneficiary thereof.” O.C.G.A. § 18-4-22(a) (amended
2006) (current version at § 18-4-6).
USCA11 Case: 20-12823 Date Filed: 01/24/2022 Page: 8 of 10
8 Opinion of the Court 20-12823
year, 1998, that Roth IRAs were created with the enactment of 26
U.S.C. § 408A. Section 408A(a) instructs us that “a Roth IRA shall
be treated for purposes of this title in the same manner as an indi-
vidual retirement plan.”
In 2005, eight years after Meehan and seven years after the
creation of Roth IRAs, the Bankruptcy Court for the Northern Dis-
trict of Georgia considered whether Meehan’s reasoning should ex-
tend to a Roth IRA. See In re Bramlette, 333 B.R. 911, 914 (Bankr.
N.D. Ga. 2005). The Bramlette court declined to extend Meehan’s
reasoning, finding that Roth IRAs should be included in a debtor’s
bankruptcy estate when they were not statutorily exempt from gar-
nishment. Id. The court reasoned that the exemptions provision
“applies only to an individual retirement account within the mean-
ing of 26 U.S.C. § 408 and Georgia law provides no similar protec-
tion for a Roth IRA established under 26 U.S.C. § 408A.” Id.
However, in April 2006—the year after Bramlette was de-
cided—the Georgia Assembly amended the exemptions provision
to include IRAs listed under 26 U.S.C. § 408 or § 408A. The
amended statute stated that “funds or benefits from an individual
retirement account as defined in Section 408 or 408A . . . shall be
exempt from the process of garnishment.” O.C.G.A. § 18-4-22(a)
(amended 2016) (current version at § 18-4-6).
A decade later, in 2016, the Georgia Assembly further
amended the exemptions provision, now codified at § 18-4-6, to
state that “[f]unds or benefits from an individual retirement ac-
count . . . shall be exempt from the process of garnishment.”
USCA11 Case: 20-12823 Date Filed: 01/24/2022 Page: 9 of 10
20-12823 Opinion of the Court 9
O.C.G.A. § 18-4-6(a)(2). Georgia’s current exemptions provision
thus no longer differentiates between a traditional IRA and a Roth
IRA, referring solely to “an individual retirement account.” See id.
IV.
We find that the development of the caselaw in this area and
the subsequent amendments to the Georgia Code reflect the Geor-
gia Assembly’s intention to clarify that both traditional IRAs as de-
fined in 26 U.S.C. § 408 and Roth IRAs as defined in § 408A are
exempt from garnishment, thus subjecting IRAs to a restriction on
transfer by state statute, see Meehan, 102 F.3d at 1211–12, and mak-
ing both types of IRAs eligible for exclusion under the Bankruptcy
Code. The current version of the exemptions provision compels
this result. By no longer listing the kinds of retirement accounts
that are exempt from garnishment, and instead exempting “indi-
vidual retirement account[s],” there is no basis for us to conclude
that Georgia intended to treat traditional IRAs differently than
Roth IRAs for the purpose of garnishment. It is undisputable that a
Roth Individual Retirement Account, by its very name and defini-
tion, is “an individual retirement account.” See O.C.G.A. § 18-4-
6(a)(2); see also 26 U.S.C. § 408A(a) (noting that Roth IRAs shall be
treated “in the same manner” as IRAs for the purposes of this title).
As noted above, a debtor’s property is excluded from his
bankruptcy estate pursuant to federal law if: (1) the debtor has “a
beneficial interest in a trust”; (2) the interest has a restriction on
transfer; and (3) the restriction is enforceable under either state or
federal law. See § 541(c)(2); Upshaw, 542 B.R. at 622. Roth IRAs
USCA11 Case: 20-12823 Date Filed: 01/24/2022 Page: 10 of 10
10 Opinion of the Court 20-12823
meet all three requisite elements. No one contests that, just like a
traditional IRA’s corpus, a Roth IRA’s corpus qualifies as a benefi-
cial interest in a trust. And, pursuant to both the 2006 and the 2016
amendments to the exemptions provision, Roth IRAs have a re-
striction on transfer that is enforceable under state law. The Bank
offers no viable reason why Roth IRAs should not be treated like
traditional IRAs in the context of bankruptcy estate exclusion.
V.
We accordingly now hold that Roth IRAs are excluded from
a Georgia debtor’s bankruptcy estate pursuant to federal law. The
judgment of the district court is therefore reversed, and the case is
remanded so that the district court may reverse the order of the
bankruptcy court.
REVERSED and REMANDED.