Nevada family-law case summaries

When a person files for bankruptcy, most of what they own goes into a "bankruptcy estate" that can be used to pay creditors. But state law lets debtors keep - or "exempt" - certain property from that process. In Nevada, the list of exempt property is set out in a statute, NRS 21.090. Two of those exemptions were at issue here: one that lets a debtor keep a single vehicle if the debtor's equity in it does not exceed $15,000, and a catch-all "wildcard exemption" that lets a debtor protect up to $1,000 of other personal property. Ana Fox filed for Chapter 7 bankruptcy in May 2010. Her husband did not join her bankruptcy case and did not file his own. Even so, because Nevada is a community property state, the couple's shared marital property became part of Fox's bankruptcy estate. Fox then claimed exemptions for two vehicles and more than $1,400 in other property - in effect, one set of exemptions for herself and a second set for her husband. The bankruptcy trustee, Yvette Weinstein, objected, arguing that a debtor gets only one vehicle exemption and one $1,000 wildcard exemption, and that a non-debtor spouse has no right to claim exemptions in someone else's bankruptcy. The federal bankruptcy court sided with Fox, which effectively doubled her exemptions. The trustee appealed, and the federal appellate panel asked the Nevada Supreme Court to answer the underlying question of Nevada law: can a debtor claim these exemptions on behalf of a spouse who isn't in bankruptcy? The Nevada Supreme Court said no. The court looked at the words of the statute itself, which refer to the "judgment debtor" - the person against whom the exemptions operate - and said nothing about a non-debtor spouse or a dependent. Following the reasoning of an Idaho bankruptcy court decision that addressed the same question under Idaho law, In re DeHaan, the court held that "based on NRS 21.090(1)(f) and (z)'s plain language, Nevada law does not allow debtors to claim motor vehicle and wildcard exemptions on behalf of their non-debtor spouses." A debtor in Nevada is therefore limited to one motor vehicle exemption not to exceed $15,000 and other personal property exemptions not to exceed $1,000.