*This order and judgment is not binding precedent, except under the doctrines of

law of the case, res judicata, and collateral estoppel. The court generally disfavors the

citation of orders and judgments; nevertheless, an order and judgment may be cited under

the terms and conditions of 10th Cir. R. 36.3.

UNITED STATES COURT OF APPEALS

Filed 10/3/96

TENTH CIRCUIT

IN RE: CHARLES R. HOFFMEISTER,

also known as Rick Hoffmeister, doing

business as Hoffmeister’s Carpet

Cleaning; and COLLEEN C.

HOFFMEISTER,

Debtors,

------------------------------

CHARLES R. HOFFMEISTER, also

known as Rick Hoffmeister, doing

business as Hoffmeister’s Carpet

Cleaning; and COLLEEN C.

HOFFMEISTER,

Appellants, No. 96-3079

v. D. Kansas

SUPER CHIEF CREDIT UNION,

Appellee,

-------------------------------

WILLIAM H. GRIFFIN,

Trustee.

(D.C. No. 95-CV-4088) 

ORDER AND JUDGMENT*
-2-

Before ANDERSON, BARRETT, and MURPHY, Circuit Judges.

After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of this

appeal. See Fed. R. App. P. 34 (a); 10th Cir. R. 34.1.9. This cause is therefore ordered

submitted without oral argument.

Charles R. and Colleen Hoffmeister appeal the district court’s order affirming the

bankruptcy court’s ruling that certain casualty insurance proceeds were property of the

Chapter 13 bankruptcy estate. They contend that the district court erred in finding that 

the proceeds were not entitled to an exemption as proceeds of exempt property. We

affirm. 

The relevant facts, fully set forth in the district court’s opinion, are undisputed. In

re Hoffmeister, 191 B.R. 875 (D. Kan. 1996). On January 29, 1993, the Hoffmeisters

filed a Chapter 13 petition. They claimed an exemption for a 1988 Chevrolet Beretta

valued at $2,600, and they listed Super Chief Credit Union (“Credit Union”) as the holder

of an $8,000 lien. In an agreed order of valuation, the bankruptcy court found that Credit

Union had a perfected security interest in the car, and that the debtors must pay it the sum
1Neither the petition, nor the agreed order of valuation, nor the confirmed plan are

part of the record on appeal. 

2The district court noted that the significance of exemptions is greatly diminished

under Chapter 13 where the debtors’ fresh start is assured by their retention of non-

(continued...)

-3-

of $2,600 plus interest.1

 On April 6, 1993, the bankruptcy court entered an order

confirming the debtors’ Chapter 13 plan. Appellants’ App. at 1-2. 

In 1994, a hailstorm damaged the car. The insurance company issued a check for

$1,101.36, payable jointly to the Hoffmeisters and Credit Union. At that time, according

to the terms of the Chapter 13 plan, the Hoffmeisters still owed Credit Union $338.56. 

The Hoffmeisters tendered the insurance check to Credit Union, proposing that Credit

Union take the $338.56 owed under the plan and return the remaining $762.80 to the

Hoffmeisters who intended to use it to pay their federal taxes. Credit Union rejected the

proposal, insisting that the entire check be deposited with the Chapter 13 Trustee who

would first pay Credit Union on its secured claim, and then use the balance to pay

unsecured general creditors. 

The Hoffmeisters filed a “Motion to Determine Distribution of Proceeds of

Exempt Property.” The bankruptcy court concluded that, since the Hoffmeisters did not

intend to use the insurance proceeds to repair their car, the money was nonexempt

property which must be distributed to creditors under the Chapter 13 plan. Appellant’s

App. at 5. Affirming on slightly different grounds, the district court distinguished the

treatment of exemptions under Chapter 13 from their treatment under Chapter 7.2 The
2

(...continued)

disposable income, and where the debtors may keep possession of all their property,

exempt or not, in exchange for paying their creditors out of future disposable income. By

contrast, in a liquidation under Chapter 7, it is the debtors’ retention of exempt assets that

assures their fresh start. In re Hoffmeister, 191 B.R. at 877 n.1 (citing In re Schnabel, 153

B.R. 809, 817 (Bankr. N.D. Ill. 1993)). 

3Additionally, the district court noted that 11 U.S.C. § 1327 provides that “the

confirmation of a plan vests all of the property of the estate in the debtor” unless

“otherwise provided in the . . . order confirming the plan,” and it observed that the

bankruptcy court’s order confirming the Hoffmeisters’ plan specifically provided

otherwise. Hoffmeister, 191 B.R. at 878. That is, according to the bankruptcy court’s

order, Appellants’ App. at 2, none of the estate property revests in the Hoffmeisters until

approval of the trustee’s final report and account, which approval had not occurred at the

time the insurance check was issued. Thus, the district court reasoned that the order

confirming the plan effectively prevented the car from revesting in the Hoffmeisters, and

as an alternative holding, the court found that insurance proceeds which covered damage

to estate property belonged to the estate. Id. at 878-79.

-4-

district court correctly noted that 11 U.S.C. § 1306 brings into the estate all property

which the “‘debtor acquires after the commencement of the case but before the case is

closed, dismissed, or converted.’” Hoffmeister, 191 B.R. at 878. Therefore, the district

court concluded that, as property which the debtors acquired after commencement of the

case, the insurance proceeds were part of the estate pursuant to § 1306.3 

The parties contest the legal conclusions which the bankruptcy court and the

district court drew from the undisputed facts. We review such legal conclusions de novo. 

Osborn v. Durant Bank & Trust Co. (In re Osborn), 24 F.3d 1199, 1203 (10th Cir. 1994). 

Citing 11 U.S.C. § 541 which provides that the bankruptcy estate includes all of

the debtor’s legal or equitable property interests as of the commencement of the case, 

Hoffmeisters acknowledge that the car became property of the estate on the date they
4Since the Hoffmeisters do not dispute it, we do not review the bankruptcy court’s

ruling that, under nonbankruptcy Kansas law, property must retain its exempt character to

receive protection from creditors. 

-5-

filed their Chapter 13 petition. However, they contend that the car was automatically

exempted from the bankruptcy estate under 11 U.S.C. § 522(l), which provides that

debtor(s) may file a list of property that they claim as exempt, and “[u]nless a party in

interest objects, the property claimed as exempt on such list is exempt.” Id., see Taylor v.

Freeland & Kronz, 503 U.S. 638, 643 (1992) (holding listed property to be absolutely 

exempt when no objection is made in Chapter 7 proceedings, even when no legal basis

exists for the claimed exemption). 

Hoffmeisters concede that Kansas case law exempts proceeds from exempt

property only if they are reinvested in exempt property.4 Appellants’ Br. at 6 (citing

Independence Savings & Loan Ass’n v. Sellars, 88 P.2d 1059 (1939)). However, they

argue that the state rule is irrelevant in the bankruptcy context, where properly exempted

assets are withdrawn from the estate. They contend that, regardless of state law, the

estate has no interest in withdrawn assets or in proceeds related to them. Id. at 7 (citing In

re Rutherford, 73 B.R. 665 (Bankr. W.D. Mo. 1986)). 

We agree with the bankruptcy court and the district court, that the bankruptcy

cases cited by the Hoffmeisters are not controlling. Not only do they concern estates

under Chapter 7 rather than Chapter 13; they do not address state law requirements for

extending exemption to proceeds. With limited exceptions, a Chapter 7 estate is fixed as
-6-

of the date of filing, while § 1306(a)(1) expands a Chapter 13 estate to include “all

property of the kind specified in [§ 541] that the debtor acquires after the commencement

of the case.” See Calder v. Job (In re Calder), 973 F.2d 862, 864-66 (10th Cir. 1992). 
5

In such a case, we have upheld an exemption in proceeds under applicable state

law, but only after specifically noting that the state’s requirement for extending the

exemption was satisfied. Region 12 Revolving Loan Fund Corp. v. Raymond (In re

Raymond), 987 F.2d 675, 676-77 (10th Cir. 1993) (citing Colo. Rev. Stat. § 38-41-207

which preserves an exemption in the proceeds of the sale of a homestead for one year so

long as they are used to acquire another home, and holding that the exemption extended

to the proceeds from the postpetition sale of a homestead where the bankrupt debtor

intended to purchase another home within the period). See also Englander v. Mills (In re

Englander), _____F.3d ____, 1996 WL 498851 at *3 (11th Cir. Sept. 19, 1996) (No.

94-2823) (applying Florida case law to allow an exemption and allocation of proceeds

which are reinvested in new homestead); Winchester v. Watson (In re Winchester), 46

B.R. 492, 494 (Bankr. 9th Cir. 1984) (applying Oregon law to disallow a claimed

exemption in the proceeds of the sale a homestead, because the proceeds were not

reinvested in another homestead within the statutory period). 

-7-

 Even if the car were automatically revested in the debtors under § 522, the insurance

proceeds are clearly property of the kind specified in § 541, which Hoffmeisters acquired

after they filed their bankruptcy petition. Those proceeds do not automatically follow the

car. Rather, § 1306 brings them under the court’s jurisdiction, so that any claim of

exemption must be determined at the time of acquisition. 

Section 522 allows the states to “opt out” of the federal exemption list, in which

case state or local law will control the availability of exemptions.5

 11 U.S.C.

§§ 522(b)(1), 522(b)(2)(A); Kulp v. Zeman (In re Kulp), 949 F.2d 1106, 1107 (10th Cir.

1991). Kansas has opted out of the federal list. See Kan. Stat. Ann. §§ 60-2312. 

Accordingly, Kansas law governs the availability of any exemption in the proceeds of

exempt personal property. See In re Sipka, 149 B.R. 181, 182 (D. Kan. 1992). Kansas

law requires that such proceeds be reinvested in exempt property to retain their exempt
-8-

character. Since the Hoffmeisters have indicated that they intend to use the proceeds for a

nonexempt purpose, they are not entitled to an exemption. 

AFFIRMED.

ENTERED FOR THE COURT

Stephen H. Anderson

Circuit Judge