(Slip Opinion) OCTOBER TERM, 2009 1 

Syllabus 

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader. 

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 

SUPREME COURT OF THE UNITED STATES 

Syllabus 

SCHWAB v. REILLY 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 

THE THIRD CIRCUIT 

No. 08–538. Argued November 3, 2009—Decided June 17, 2010 

Respondent Reilly filed for Chapter 7 bankruptcy when her catering 

business failed. She supported her petition with, inter alia, Schedule 

B, on which debtors must list their assets, and Schedule C, on which 

they must list the property they wish to reclaim as exempt. Her 

Schedule B assets included cooking and other kitchen equipment, to 

which she assigned an estimated market value of $10,718. On 

Schedule C, she claimed two exempt interests in this “business

equipment”: a “tool[s] of the trade” exemption for the statutorymaximum “$1,850 in value,” 11 U. S. C. §522(d)(6); and $8,868 under

the statutory provisions allowing miscellaneous, or “wildcard,” exemptions up to $10,225 in value. The claimed exemptions’ total value

($10,718) equaled Reilly’s estimate of the equipment’s market value.

Property claimed as exempt will be excluded from the bankruptcy estate “[u]nless a party in interest” objects, §522(l), within a certain 30-

day period, see Fed. Rule Bkrtcy. Proc. 4003(b). Absent an objection,

the property will be excluded from the estate even if the exemption’s

value exceeds what the Code permits. See, e.g., §522(l); Taylor v. 

Freeland & Kronz, 503 U. S. 638, 642–643. 

Although an appraisal revealed that the equipment’s total market

value could be as much as $17,200, petitioner Schwab, the bankruptcy estate’s trustee, did not object to the claimed exemptions because the dollar value Reilly assigned to each fell within the limits of

§§522(d)(5) and (6). Schwab moved the Bankruptcy Court for permission to auction the equipment so Reilly could receive the $10,718 

she claimed exempt and the estate could distribute the remaining

value to her creditors. Reilly countered that by equating on Schedule

C the total value of her claimed exemptions in the equipment with

the equipment’s estimated market value, she had put Schwab and 
2 SCHWAB v. REILLY 

Syllabus 

her creditors on notice that she intended to exempt the equipment’s 

full value, even if it turned out to be more than the amounts she declared and that the Code allowed. She asserted that the estate had 

forfeited its claim to any portion of that value because Schwab had 

not objected within the Rule 4003(b) period, and that she would dismiss her petition rather than sell her equipment. 

The Bankruptcy Court denied Schwab’s motion and Reilly’s conditional motion to dismiss. The District Court denied Schwab relief, rejecting his argument that neither the Code nor Rule 4003(b) requires 

a trustee to object to a claimed exemption where the amount the

debtor declares as the exemption’s value is within the limits the Code

prescribes. Affirming, the Third Circuit agreed that Reilly’s Schedule

C entries indicated her intent to exempt the equipment’s full value. 

Relying on Taylor, it held that Schwab’s failure to object entitled

Reilly to exempt the full value of her equipment, even though that 

value exceeded the amounts that Reilly declared and the Code permitted. 

Held: Because Reilly gave “the value of [her] claimed exemption[s]” on

Schedule C dollar amounts within the range the Code allows for what 

it defines as the “property claimed as exempt,” Schwab was not required to object to the exemptions in order to preserve the estate’s

right to retain any value in the equipment beyond the value of the 

exempt interest. Pp. 6–23.

(a) Reilly’s complicated view of the trustee’s statutory obligation, 

and her reading of Schedule C, does not accord with the Code. Pp. 6– 

15. 

(1) The parties agree that this case is governed by §522(l), which 

states that a Chapter 7 debtor must “file a list of property that the

debtor claims as exempt under subsection (b) of this section,” and

that “[u]nless a party in interest objects, the property claimed as exempt on such list is exempt.” Reilly asserts that the “property

claimed as exempt” refers to all of the information on Schedule C, including the estimated market value of each asset. Schwab and 

amicus United States counter that because the Code defines such 

property as an interest, not to exceed a certain dollar amount, in a 

particular asset, not as the asset itself, the value of the property 

claimed exempt should be judged on the dollar value the debtor assigns the interest, not on the value the debtor assigns the asset. 

Pp. 6–9.

(2) Schwab and the United States are correct. The portion of 

§522(l) that resolves this case is not, as Reilly asserts, the provision 

stating that the “property claimed as exempt on [Schedule C] is exempt” unless an interested party objects. Rather, it is the portion 

that defines the objection’s target, namely, the “list of property that 
Cite as: 560 U. S. ____ (2010) 3 

Syllabus 

the debtor claims as exempt under subsection (b).” Section 522(b) 

does not define the “property claimed as exempt” by reference to the 

estimated market value. It refers only to property defined in §522(d),

which in turn lists 12 categories of property that a debtor may claim 

as exempt. Most of these categories and all the ones applicable here

define “property” as the debtor’s “interest”—up to a specified dollar

amount—in the assets described in the category, not as the assets 

themselves. Schwab had no duty to object to the property Reilly

claimed as exempt because its stated value was within the limits the

Code allows. Reilly’s contrary view does not withstand scrutiny because it defines the target of a trustee’s objection based on Schedule 

C’s language and dictionary definitions of “property” at odds with the

Code’s definition. The Third Circuit failed to account for the Code’s 

definition and for provisions that permit debtors to exempt certain

property in kind or in full regardless of value. See, e.g., §522(d)(9).

Schwab was entitled to evaluate the claimed exemptions’ propriety 

based on three Schedule C entries: the description of the business 

equipment in which Reilly claimed the exempt interests; the Code

provisions governing the claimed exemptions; and the amounts Reilly

listed in the column titled “value of claimed exemption.” This conclusion does not render Reilly’s market value estimate superfluous. It 

simply confines that estimate to its proper role: aiding the trustee in

administering the estate by helping him identify assets that may

have value beyond the amount the debtor claims as exempt, or whose 

full value may not be available for exemption. This interpretation is

consistent with the historical treatment of bankruptcy exemptions.

Pp. 9–15.

(b) Taylor does not dictate a contrary conclusion. While both Taylor and this case concern the consequences of a trustee’s failure to object to a claimed exemption within Rule 4003’s time period, Taylor establishes and applies the straightforward proposition that an 

interested party must object to a claimed exemption if the amount

the debtor lists as the “value claimed exempt” is not within statutory

limits. In Taylor, the value listed in Schedule C (“$ unknown”) was

not plainly within those limits, but here, the values ($8,868 and

$1,850) are within Code limits and thus do not raise the warning flag

present in Taylor. Departing from Taylor would not only ignore the

presumption that parties act lawfully and with knowledge of the law;

it would also require the Court to expand the statutory definition of 

“property claimed as exempt” and the universe of information an interested party must consider in evaluating an exemption’s validity.

Even if the Code allowed such expansions, they would be ill advised.

Basing the definition of “property claimed exempt,” and thus an interested party’s obligation to object under §522(l), on inferences that 
4 SCHWAB v. REILLY 

Syllabus 

party must draw from preprinted bankruptcy schedules that evolve

over time, rather than on the facial validity of the value the debtor

assigns the “property claimed as exempt” as defined by the Code, 

would undermine the predictability the statute is designed to provide. Pp. 16–18. 

(c) Reilly’s argument threatens to convert the Code’s goal of giving 

debtors a fresh start into a free pass. By permitting a debtor “to

withdraw from the estate certain interests in property, . . . up to certain values,” Rousey v. Jacoway, 544 U. S. 320, 325, Congress balanced the difficult choices that exemption limits impose on debtors

with the economic harm that exemptions visit on creditors. This 

Court should not alter that balance by requiring trustees to object to

claimed exemptions based on form entries beyond those governing an

exemption’s validity under the Code. In rejecting Reilly’s approach,

the Court does not create incentives for trustees and creditors to 

sleep on their rights. The decision reached here encourages a debtor

wishing to exempt an asset’s full market value or the asset itself to 

declare the value of the claimed exemption in a way that makes its

scope clear. Such declarations will encourage the trustee to object

promptly and preserve for the estate any value in the asset beyond

relevant statutory limits. If the trustee fails to object, or his objection

is overruled, the debtor will be entitled to exclude the asset’s full 

value. If the objection is sustained, the debtor will be required either 

to forfeit the portion of the exemption exceeding the statutory allowance or to revise other exemptions or arrangements with creditors to

permit the exemption. See Rule 1009(a). Either result will facilitate 

the expeditious and final disposition of assets, and thus enable the

debtor and creditors to achieve a fresh start free of Reilly’s finality

and clouded-title concerns. Pp. 19–22. 

534 F. 3d 173, reversed and remanded. 

THOMAS, J., delivered the opinion of the Court, in which STEVENS, 

SCALIA, KENNEDY, ALITO, and SOTOMAYOR, JJ., joined. GINSBURG, J., 

filed a dissenting opinion, in which ROBERTS, C. J., and BREYER, J., 

joined. 
_________________ 

_________________ 

Cite as: 560 U. S. ____ (2010) 1 

Opinion of the Court 

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press. 

SUPREME COURT OF THE UNITED STATES 

No. 08–538 

WILLIAM G. SCHWAB, PETITIONER v. NADEJDA

REILLY 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE THIRD CIRCUIT

[June 17, 2010] 

JUSTICE THOMAS delivered the opinion of the Court. 

When a debtor files a Chapter 7 bankruptcy petition, all 

of the debtor’s assets become property of the bankruptcy 

estate, see 11 U. S. C. §541, subject to the debtor’s right to 

reclaim certain property as “exempt,” §522(l). The Bankruptcy Code specifies the types of property debtors may 

exempt, §522(b), as well as the maximum value of the 

exemptions a debtor may claim in certain assets, §522(d). 

Property a debtor claims as exempt will be excluded from 

the bankruptcy estate “[u]nless a party in interest” objects. §522(l).

This case presents an opportunity for us to resolve a 

disagreement among the Courts of Appeals about what 

constitutes a claim of exemption to which an interested 

party must object under §522(l). The issue is whether an 

interested party must object to a claimed exemption

where, as here, the Code defines the property the debtor is 

authorized to exempt as an interest, the value of which

may not exceed a certain dollar amount, in a particular

type of asset, and the debtor’s schedule of exempt property 

accurately describes the asset and declares the “value of 
2 SCHWAB v. REILLY 

Opinion of the Court 

[the] claimed exemption” in that asset to be an amount

within the limits that the Code prescribes. Fed. Rule 

Bkrtcy. Proc. Official Form 6, Schedule C (1991) (hereinafter Schedule C). We hold that, in cases such as this, an 

interested party need not object to an exemption claimed 

in this manner in order to preserve the estate’s ability to

recover value in the asset beyond the dollar value the

debtor expressly declared exempt. 

I 

Respondent Nadejda Reilly filed for Chapter 7 bankruptcy when her catering business failed. She supported

her petition with various schedules and statements, two of 

which are relevant here: Schedule B, on which the Bankruptcy Rules require debtors to list their assets (most of 

which become property of the estate), and Schedule C, on

which the Rules require debtors to list the property they

wish to reclaim as exempt. The assets Reilly listed on 

Schedule B included an itemized list of cooking and other

kitchen equipment that she described as “business equipment,” and to which she assigned an estimated market 

value of $10,718. App. 40a, 49a–55a. 

On Schedule C, Reilly claimed two exempt interests in 

this equipment pursuant to different sections of the Code. 

Reilly claimed a “tool[s] of the trade” exemption of $1,850

in the equipment under §522(d)(6), which permits a debtor 

to exempt his “aggregate interest, not to exceed $1,850 in 

value, in any implements, professional books, or tools, of

[his] trade.” See also 69 Fed. Reg. 8482 (2004) (Table).

And she claimed a miscellaneous exemption of $8,868 in 

the equipment under §522(d)(5), which, at the time she 

filed for bankruptcy, permitted a debtor to take a “wildcard” exemption equal to the “debtor’s aggregate interest 

in any property, not to exceed” $10,225 “in value.”1 See 

—————— 

1The 1994 version of 11 U. S. C. §522(d)(5) allowed debtors to exempt 
Cite as: 560 U. S. ____ (2010) 3 

Opinion of the Court 

App. 58a. The total value of these claimed exemptions 

($10,718) equaled the value Reilly separately listed on

Schedules B and C as the equipment’s estimated market 

value, see id., at 49a, 58a. 

Subject to exceptions not relevant here, the Federal

Rules of Bankruptcy Procedure require interested parties

to object to a debtor’s claimed exemptions within 30 days

after the conclusion of the creditors’ meeting held pursuant to Rule 2003(a). See Fed. Rule Bkrtcy. Proc. 4003(b).

If an interested party fails to object within the time allowed, a claimed exemption will exclude the subject property from the estate even if the exemption’s value exceeds 

what the Code permits. See, e.g., §522(l); Taylor v. Freeland & Kronz, 503 U. S. 638, 642–643 (1992). 

Petitioner William G. Schwab, the trustee of Reilly’s 

bankruptcy estate, did not object to Reilly’s claimed exemptions in her business equipment because the dollar 

value Reilly assigned each exemption fell within the limits 

that §§522(d)(5) and (6) prescribe. App. 163a. But because an appraisal revealed that the total market value of

Reilly’s business equipment could be as much as $17,200,2 

Schwab moved the Bankruptcy Court for permission to 

auction the equipment so Reilly could receive the $10,718

she claimed as exempt, and the estate could distribute the

equipment’s remaining value (approximately $6,500) to 

Reilly’s creditors. App. 141a–143a. 

—————— 

an “aggregate interest in any property, not to exceed in value $800 plus 

up to $7,500 of any unused amount of the [homestead or burial plot] 

exemption provided under [§522(d)(1)].” In 2004, pursuant to 

§104(b)(2), the Judicial Conference of the United States published 

notice that §522(d)(5) would impose the $975 and $9,250 ($10,225 total)

limits that governed Reilly’s April 2005 petition. See 69 Fed. Reg. 8482 

(Table). In 2007 and 2010 the limits were again increased. See 72 id., 

at 7082 (Table); 75 id., at 8748 (Table). 2Schwab concedes that the appraisal occurred before Rule 4003(b)’s

30-day window for objecting to the claimed exemptions had passed. See 

Brief for Petitioner 15. 
4 SCHWAB v. REILLY 

Opinion of the Court 

Reilly opposed Schwab’s motion. She argued that by

equating on Schedule C the total value of the exemptions 

she claimed in the equipment with the equipment’s estimated market value, she had put Schwab and her creditors on notice that she intended to exempt the equipment’s 

full value, even if that amount turned out to be more than 

the dollar amount she declared, and more than the Code 

allowed. Id., at 165a. Citing §522(l), Reilly asserted that

because her Schedule C notified Schwab of her intent to 

exempt the full value of her business equipment, he was 

obliged to object if he wished to preserve the estate’s right 

to retain any value in the equipment in excess of the

$10,718 she estimated. Because Schwab did not object 

within the time prescribed by Rule 4003(b), Reilly asserted 

that the estate forfeited its claim to such value. Id., at 

165a. Reilly further informed the Bankruptcy Court that

exempting her business equipment from the estate was so 

important to her that she would dismiss her bankruptcy 

case if doing so was the only way to avoid the equipment’s 

sale at auction.3 

The Bankruptcy Court denied both Schwab’s motion to

auction the equipment and Reilly’s conditional motion to

dismiss her case. See In re Reilly, 403 B. R. 336 (Bkrtcy. 

Ct. MD Pa. 2006). Schwab sought relief from the District 

Court, arguing that neither the Code nor Rule 4003(b) 

requires a trustee to object to a claimed exemption where

the amount the debtor declares as the “value of [the 

—————— 

3Reilly’s desire to avoid the equipment’s auction is understandable

because the equipment, which Reilly’s parents purchased for her 

despite their own financial difficulties, has “ ‘extraordinary sentimental 

value.’ ” Brief for Respondent 5 (quoting App. 152a–153a). But the 

sentimental value of the property cannot drive our decision in this case,

because sentimental value is not a basis for construing the Bankruptcy 

Code. Because the Code imposes limits on exemptions, many debtors 

who seek to take advantage of the Code are, no doubt, put to the 

similarly difficult choice of parting with property of “extraordinary 

sentimental value.” Id., at 152a−153a; see infra, at 19–23. 
Cite as: 560 U. S. ____ (2010) 5 

Opinion of the Court 

debtor’s] claimed exemption” in certain property is an

amount within the limits the Code prescribes. The District Court rejected Schwab’s argument, and the Court of

Appeals affirmed. See In re Reilly, 534 F. 3d 173 (CA3 

2008).

The Court of Appeals agreed with the Bankruptcy Court

that by equating on Schedule C the total value of her 

exemptions in her business equipment with the equipment’s market value, Reilly “indicate[d] the intent” to 

exempt the equipment’s full value. Id., at 174. In reaching this conclusion, the Court of Appeals relied on our

decision in Taylor: 

“[W]e believe this case to be controlled by Taylor. 

Just as we perceive it was important to the Taylor

Court that the debtor meant to exempt the full

amount of the property by listing ‘unknown’ as both 

the value of the property and the value of the exemption, it is important to us that Reilly valued the business equipment at $10,718 and claimed an exemption

in the same amount. Such an identical listing put

Schwab on notice that Reilly intended to exempt the

property fully. 

. . . . . 

“‘[A]n unstated premise’ of Taylor was ‘that a debtor 

who exempts the entire reported value of an asset is

claiming the “full amount,” whatever it turns out to 

be.’” 534 F. 3d, at 178−179. 

Relying on this “unstated premise,” the Court of Appeals

held that Schwab’s failure to object to Reilly’s claimed 

exemptions entitled Reilly to the equivalent of an in-kind

interest in her business equipment, even though the value 

of that exemption exceeded the amount that Reilly declared on Schedule C and the amount that the Code allowed her to withdraw from the bankruptcy estate. Ibid. 

As noted, the Court of Appeals’ decision adds to dis­
6 SCHWAB v. REILLY 

Opinion of the Court 

agreement among the Circuits about what constitutes a 

claim of exemption to which an interested party must

object under §522(l).4 We granted certiorari to resolve this

conflict. See 556 U. S. ___ (2009). We conclude that the 

Court of Appeals’ approach fails to account for the text of 

the relevant Code provisions and misinterprets our decision in Taylor. Accordingly, we reverse. 

II 

The starting point for our analysis is the proper interpretation of Reilly’s Schedule C. If we read the Schedule 

Reilly’s way, she claimed exemptions in her business

equipment that could exceed statutory limits, and thus 

claimed exemptions to which Schwab should have objected 

if he wished to enforce those limits for the benefit of the 

estate. If we read Schedule C Schwab’s way, Reilly 

claimed valid exemptions to which Schwab had no duty to 

object. The Court of Appeals construed Schedule C Reilly’s way and interpreted her claimed exemptions as improper, and therefore objectionable, even though their 

declared value was facially within the applicable Code

limits. In so doing, the Court of Appeals held that trustees 

evaluating the validity of exemptions in cases like this

cannot take a debtor’s claim at face value, and specifically 

—————— 

4Compare In re Williams, 104 F. 3d 688, 690 (CA4 1997) (holding

that interested parties have no duty to object to a claimed exemption

where the dollar amount the debtor assigns the exemption is facially

within the range the Code allows for the type of property in issue); In re 

Wick, 276 F. 3d 412 (CA8 2002) (employing reasoning similar to Williams, but stopping short of articulating a clear rule), with In re Green, 

31 F. 3d 1098, 1100 (CA11 1994) (“A debtor who exempts the entire

reported value of an asset is claiming the [asset’s] ‘full amount,’ whatever it turns out to be”); In re Anderson, 377 B. R. 865 (Bkrtcy. App. 

Panel CA6 2007) (similar); and In re Barroso-Herrans, 524 F. 3d 341, 

344 (CA1 2008) (focusing on “how a reasonable trustee would have

understood the filings under the circumstances”); In re Hyman, 967 

F. 2d 1316 (CA9 1992) (applying an analogous totality-of-thecircumstances approach). 
Cite as: 560 U. S. ____ (2010) 7 

Opinion of the Court 

cannot rely on the fact that the amount the debtor declares as the “value of [the] claimed exemption” is within

statutory limits. Instead, the trustee’s duty to object turns 

on whether the interplay of various schedule entries supports an inference that the debtor “intended” to exempt a

dollar value different than the one she wrote on the form. 

534 F. 3d, at 178. This complicated view of the trustee’s

statutory obligation, and the strained reading of Schedule 

C on which it rests, is inconsistent with the Code.5 

The parties agree that this case is governed by §522(l),

which states that a Chapter 7 debtor must “file a list of 

property that the debtor claims as exempt under subsection (b) of this section,” and further states that “[u]nless a

party in interest objects, the property claimed as exempt

on such list is exempt.” The parties further agree that the 

“list” to which §522(l) refers is the “list of property . . .

claim[ed] as exempt” currently known as “Schedule C.”

See Schedule C.6 The parties, like the Courts of Appeals, 

disagree about what information on Schedule C defines

the “property claimed as exempt” for purposes of evaluating an exemption’s propriety under §522(l). Reilly asserts

that the “property claimed as exempt” is defined by reference to all the information on Schedule C, including the

estimated market value of each asset in which the debtor 

claims an exempt interest. Schwab and the United States 

as amicus curiae argue that the Code specifically defines

the “property claimed as exempt” as an interest, the value 

of which may not exceed a certain dollar amount, in a

particular asset, not as the asset itself. Accordingly, they 

—————— 

5The forms, rules, treatise excerpts, and policy considerations on 

which the dissent relies, see post, at 4−16, must be read in light of the

Bankruptcy Code provisions that govern this case, and must yield to 

those provisions in the event of conflict. 6Bankruptcy Rule 4003 specifies the time within which the debtor

must file Schedule C, as well as the time within which interested 

parties must object to the exemptions claimed thereon. 
8 SCHWAB v. REILLY 

Opinion of the Court 

argue that the value of the property claimed exempt, i.e., 

the value of the debtor’s exempt interest in the asset,

should be judged on the value the debtor assigns the

interest, not on the value the debtor assigns the asset.

The point of disagreement is best illustrated by the relevant portion of Reilly’s Schedule C: 

Schedule C─Property Claimed as Exempt 

Description of

Property 

Specify Law

Providing Each 

Exemption 

Value of 

Claimed 

Exemption 

Current Market Value 

of Property Without 

Deducting Exemptions 

Schedule B 

Personal 

Property 

. . . . 

See attached 

list of business 

equipment. 

. . . . 

11 U. S. C. 

§522(d)(6) 

11 U. S. C. 

§522(d)(5) 

. . . . 

1,850 

8,868 

. . . . 

10,718 

According to Reilly, Schwab was required to treat the

estimate of market value she entered in column four as 

part of her claimed exemption in identifying the “property

claimed as exempt” under §522(l). See Brief for Respondent 22–28. Relying on this premise, Reilly argues that 

where, as here, a debtor equates the total value of her 

claimed exemptions in a certain asset (column three) with

her estimate of the asset’s market value (column four), she 

establishes the “property claimed as exempt” as the full 

value of the asset, whatever that turns out to be. See ibid. 

Accordingly, Reilly argues that her Schedule C clearly put 

Schwab on notice that she “intended” to claim an exemption for the full value of her business equipment, and that 

Schwab’s failure to oppose the exemption in a timely 

manner placed the full value of the equipment outside the 

estate’s reach. 

Schwab does not dispute that columns three and four 

apprised him that Reilly equated the total value of her 

claimed exemptions in the equipment ($1,850 plus $8,868) 
Cite as: 560 U. S. ____ (2010) 9 

Opinion of the Court 

with the equipment’s market value ($10,718). He simply

disagrees with Reilly that this “identical listing put [him] 

on notice that Reilly intended to exempt the property 

fully,” regardless whether its value exceeded the exemption limits the Code prescribes. 534 F. 3d, at 178. Schwab 

and amicus United States instead contend that the Code 

defines the “property” Reilly claimed as exempt under

§522(l) as an “interest” whose value cannot exceed a certain dollar amount. Brief for Petitioner 20–26; Reply Brief 

for Petitioner 3–6; Brief for United States as Amicus 

Curiae 12–18. Construing Reilly’s Schedule C in light of 

this statutory definition, they contend that Reilly’s

claimed exemption was facially unobjectionable because

the “property claimed as exempt” (i.e., two interests in her 

business equipment worth $8,868 and $1,850, respectively) is property Reilly was clearly entitled to exclude

from her estate under the Code provisions she referenced

in column 2. See supra, at 8 (citing §§522(d)(5) and (6)). 

Accordingly, Schwab and the United States conclude that

Schwab had no obligation to object to the exemption in 

order to preserve for the estate any value in Reilly’s business equipment beyond the total amount ($10,718) Reilly 

properly claimed as exempt. 

We agree. The portion of §522(l) that resolves this case 

is not, as Reilly asserts, the provision stating that the 

“property claimed as exempt on [Schedule C] is exempt” 

unless an interested party objects. Rather, it is the portion of §522(l) that defines the target of the objection,

namely, the portion that says Schwab has a duty to object 

to the “list of property that the debtor claims as exempt 

under subsection (b).” (Emphasis added.) That subsection, §522(b), does not define the “property claimed as

exempt” by reference to the estimated market value on

which Reilly and the Court of Appeals rely. Brief for 

Respondent 22–23; 534 F. 3d, at 178. Section 522(b) 

refers only to property defined in §522(d), which in turn 
10 SCHWAB v. REILLY 

Opinion of the Court 

lists 12 categories of property that a debtor may claim as 

exempt. As we have recognized, most of these categories 

(and all of the categories applicable to Reilly’s exemptions)

define the “property” a debtor may “clai[m] as exempt” as

the debtor’s “interest”—up to a specified dollar amount—

in the assets described in the category, not as the assets 

themselves. §§522(d)(5)–(6); see also §§522(d)(1)–(4), (8); 

Rousey v. Jacoway, 544 U. S. 320, 325 (2005); Owen v. 

Owen, 500 U. S. 305, 310 (1991). Viewing Reilly’s form

entries in light of this definition, we agree with Schwab 

and the United States that Schwab had no duty to object

to the property Reilly claimed as exempt (two interests in 

her business equipment worth $1,850 and $8,868) because 

the stated value of each interest, and thus of the “property claimed as exempt,” was within the limits the Code

allows.7 

Reilly’s contrary view of Schwab’s obligations under

§522(l) does not withstand scrutiny because it defines the

target of a trustee’s objection—the “property claimed as 

exempt”—based on language in Schedule C and dictionary 

definitions of “property,” see Brief for Respondent 24–25,

40–41, that the definition in the Code itself overrides.8 

—————— 

7Schwab’s statutory duty to object to the exemptions in this case 

turns solely on whether the value of the property claimed as exempt 

exceeds statutory limits because the parties agree that Schwab had no

cause to object to Reilly’s attempt to claim exemptions in the equipment

at issue, or to the applicability of the Code provisions Reilly cited in

support of her exemptions. 8The dissent’s approach suffers from a similar flaw, and misstates

our holding in critiquing it. See post, at 1−2 (asserting that by refusing 

to subject “challenges to the debtor’s valuation of exemptible assets” to 

the “30-day” objection period in Federal Rule of Bankruptcy Procedure 

4003(b), we “drastically reduc[e] Rule 4003’s governance”). Challenges

to the valuation of what the dissent terms “exemptible assets” are not

covered by Rule 4003(b) in the first place. Post, at 1. Challenges to

“property claimed as exempt” as defined by the Code are covered by

Rule 4003(b), but in this case that property is not objectionable, so the

lack of an objection did not violate the Rule. Our holding is confined to 
Cite as: 560 U. S. ____ (2010) 11 

Opinion of the Court 

Although we may look to dictionaries and the Bankruptcy

Rules to determine the meaning of words the Code does 

not define, see, e.g., Rousey, supra, at 330, the Code’s 

definition of the “property claimed as exempt” in this case 

is clear. As noted above, §§522(d)(5) and (6) define the 

“property claimed as exempt” as an “interest” in Reilly’s 

business equipment, not as the equipment per se. Sections 

522(d)(5) and (6) further and plainly state that claims to

exempt such interests are statutorily permissible, and 

thus unobjectionable, if the value of the claimed interest is 

below a particular dollar amount.9 That is the case here, 

and Schwab was entitled to rely upon these provisions in

evaluating whether Reilly’s exemptions were objectionable

under the Code. See Lamie v. United States Trustee, 540 

U. S. 526, 534 (2004); Hartford Underwriters Ins. Co. v. 

Union Planters Bank, N. A., 530 U. S. 1, 6 (2000). The 

Court of Appeals’ contrary holding not only fails to account

for the Code’s definition of the “property claimed as exempt.” It also fails to account for the provisions in §522(d) 

that permit debtors to exempt certain property in kind or

in full regardless of value. See, e.g., §§522(d)(9) (professionally prescribed health aids), (10)(C) (disability benefits), (7) (unmatured life insurance contracts). We decline 

to construe Reilly’s claimed exemptions in a manner that 

—————— 

this point. Accordingly, our holding does not “reduc[e] Rule 4003’s

governance,” nor does it express any judgment on what constrains

objections to the type of “market value” estimates, post, at 1, the 

dissent equates with the dollar value a debtor assigns the “property

claimed as exempt” as defined by the Code, see, e.g., post, at 2, 6. 9Treating such claims as unobjectionable is consistent with our precedents. See, e.g., Rousey, 544 U. S., at 325. It also accords with 

bankruptcy court decisions holding that where, as here, a debtor claims

an exemption pursuant to provisions that (like §522(d)(6)) permit the

debtor to exclude from the estate only an “interest” in certain property, 

the “property” that becomes exempt absent objection, §522(l), is only

the “partial interest” claimed as exempt and not “the asset as a whole,” 

e.g., In re Soost, 262 B. R. 68, 72 (Bkrtcy. App. Panel CA8 2001). 
12 SCHWAB v. REILLY 

Opinion of the Court 

elides the distinction between these provisions and provisions such as §§522(d)(5) and (6), see, e.g., Duncan v. 

Walker, 533 U. S. 167, 174 (2001), particularly based upon

an entry on Schedule C—Reilly’s estimate of her equipment’s market value—to which the Code does not refer in 

defining the “property claimed as exempt.”10 

For all of these reasons, we conclude that Schwab was 

entitled to evaluate the propriety of the claimed exemptions based on three, and only three, entries on Reilly’s 

Schedule C: the description of the business equipment in

which Reilly claimed the exempt interests; the Code provi­

—————— 

10The dissent’s approach does not avoid these concerns. The dissent 

insists that “a debtor’s market valuation [of the equipment in which she

claims an exempt interest] is an essential factor in determining the

nature of the ‘interest’ [the] debtor lists as exempt” (and thus in determining whether the claimed exemption is objectionable), because 

“without comparing [the debtor’s] market valuation of the equipment to

the value of her claimed exemption” the trustee “could not comprehend 

whether [the debtor] claimed a monetary or an in-kind ‘interest’ in [the]

equipment.” Post, at 9, n. 9. This argument overlooks the fact that 

there is another way the trustee could discern from the “face of the

debtor’s filings,” post, at 7, n. 6, whether the debtor claimed as exempt

a “monetary or an in-kind ‘interest’ in” her equipment, post, at 9, n. 9: 

The trustee could simply consult the Code provisions the debtor listed

as governing the exemption in question. Here, those provisions,

§§522(d)(5) and (d)(6), expressly describe the exempt interest as an

“interest” “not to exceed” a specified dollar amount. Accordingly, it was

entirely appropriate for Schwab to view Reilly’s schedule entries as

exempting an interest in her business equipment in the (declared and

unobjectionable) amounts of $1,850 and $8,868. Viewing the entries 

otherwise, i.e., as exempting the equipment in kind or in full no matter

what its dollar value, would unnecessarily treat the exemption as

violating the limits imposed by the Code provisions that govern it, as

well as ignore the distinction between those provisions and the provisions that “authoriz[e] reclamation of the property in full without any

cap on value,” post, at 7, n. 5. And it would do all of this based on 

information (identical dollar amounts in columns three and four of

Schedule C) that Schwab and one of his amici say often result from a

default setting in commercial bankruptcy software. See Reply Brief for

Petitioner 15; Brief for Nat. Assn. of Bankruptcy Trustees 13, n. 15. 
Cite as: 560 U. S. ____ (2010) 13 

Opinion of the Court 

sions governing the claimed exemptions; and the amounts

Reilly listed in the column titled “value of claimed exemption.” In reaching this conclusion, we do not render the 

market value estimate on Reilly’s Schedule C superfluous.

We simply confine the estimate to its proper role: aiding

the trustee in administering the estate by helping him 

identify assets that may have value beyond the dollar 

amount the debtor claims as exempt, or whose full value 

may not be available for exemption because a portion of 

the interest is, for example, encumbered by an unavoidable

lien. See, e.g., 3 W. Norton, Bankruptcy Law and Practice 

§56:7 (3d ed. 2009); Brief for United States as Amicus Curiae 

16; Dept. of Justice, Executive Office for U. S. Trustees, 

Handbook for Chapter 7 Trustees, p. 8–1 (2005), http://

www.justice.gov/ust/eo/private_trustee/library/chapter07/

docs/7handbook1008/Ch7_Handbook.pdf (as visited June 

14, 2010, and available in Clerk of Court’s case file). As 

noted, most assets become property of the estate upon

commencement of a bankruptcy case, see 11 U. S. C. §541, 

and exemptions represent the debtor’s attempt to reclaim

those assets or, more often, certain interests in those 

assets, to the creditors’ detriment. Accordingly, it is at

least useful for a trustee to be able to compare the value of

the claimed exemption (which typically represents the 

debtor’s interest in a particular asset) with the asset’s

estimated market value (which belongs to the estate subject to any valid exemption) without having to consult

separate schedules.11 

—————— 

11The dissent’s argument that the estimate plays a greater role, and

is “vital,” post, at 8, to determining whether the value a debtor assigns

the “property claimed as exempt” (here, an interest in certain business

equipment) is objectionable, see post, at 8−9, lacks statutory support

because the governing Code provisions phrase the exemption limit as a

simple dollar amount. The dissent’s view, see post, at 7−9, might be

plausible if the Code stated that the debtor could exempt an interest in

her equipment “not to exceed” a certain percentage of the equipment’s 
14 SCHWAB v. REILLY 

Opinion of the Court 

Our interpretation of Schwab’s statutory obligations is 

not only consistent with the governing Code provisions; it

is also consistent with the historical treatment of bankruptcy exemptions. Congress has permitted debtors to

exempt certain property from their bankruptcy estates for 

more than two centuries. See Act of Apr. 4, 1800, ch. 19, 

§5, 2 Stat. 23.12 Throughout these periods, debtors have

validly exempted property based on forms that required 

the debtor to list the value of a claimed exemption without 

also estimating the market value of the asset in which the 

—————— 

market value, because then it might be necessary to “compar[e] [the

debtor’s] market valuation of the equipment to the value of her claimed

exemption” to determine the exemption’s propriety. Post, at 9, n. 9. 

But the Code does not phrase the exemption cap in such terms. Moreover, even accepting that the equivalent Schedule C entries the dissent

relies upon represent a claim to exempt an asset’s full value, the 

dissent does not explain why this equivalence precludes a trustee from 

relying on the dollar amount the debtor expressly assigns both entries.

According to the dissent, a trustee faced with such entries should 

assume not only that the debtor reclaims from the estate what she 

believes to be the full value of an asset in which the Code allows her to 

exempt an interest “not to exceed” a certain dollar amount, e.g., 

§522(d)(6), but also that the debtor would continue to claim the asset’s 

full value as exempt even if that value exceeds her estimate to a point 

that would cause her claim to violate the Code. The schedule entries 

themselves do not compel this assumption, and the Code provisions

they invoke undercut it. The evidence that the debtor in this case 

would have chosen that course is external to her exemption schedule. 

See, e.g., supra, at 4 (citing statements in Reilly’s motion to dismiss); 

post, at 4, n. 3, 6 (same). And in the ordinary case, particularly if the 

equivalent entries the dissent relies upon result from a software default, see n. 10, supra, there is no reason to assume that a debtor would 

want to violate the Code or jeopardize other exemptions if her market 

value estimate turns out to be wrong. 12See also Act of Aug. 19, 1841, ch. 9, §3, 5 Stat. 442; Act of Mar. 2, 

1867, ch. 176, §11, 14 Stat. 521, amended by Act of June 22, 1874, 18

Stat., Pt. 3, p. 182; Bankruptcy Act of July 1, 1898, ch. 541, §6, 30 Stat.

548, 11 U. S. C. §24 (1926 ed.); Chandler Act, ch. 575, §1, 52 Stat. 847, 

11 U. S. C. §24 (1934 ed., Supp. IV); §522 (1976 ed., Supp. II); §522

(2000 ed. and Supp. V). 
Cite as: 560 U. S. ____ (2010) 15 

Opinion of the Court 

debtor claimed the exempt interest. See Brief for Respondent 46, n. 7 (citing Sup. Ct. Bkrtcy. Form 20 (1877)).13 

Indeed, it was not until 1991 that Schedule B–4 was redesignated as Schedule C and amended to require the

estimate of market value on which Reilly so heavily relies. 

See Schedule C. This amendment was not occasioned by

legislative changes that altered the Code’s definition of 

“the property claimed as exempt” in this case as an “interest,” not to exceed a certain dollar amount, in Reilly’s

business equipment.14 Accordingly, we agree with Schwab

and the United States that this recent amendment to the 

exemption form does not compel Reilly’s view of Schwab’s

statutory obligations, or render the claimed exemptions in 

this case objectionable under the Code. See Reply Brief 

for Petitioner 9–11; Brief for United States as Amicus 

Curiae 16–17.15 

—————— 

13See also General Forms in Bankruptcy, Official Form 1, Schedule 

B. (5) (1898); Fed. Rule Bkrtcy. Proc. Official Form 6, Schedule B–4 

(1971). 14The precise reason for the amendment is unclear. See Communication from THE CHIEF JUSTICE of the United States Transmitting 

Amendments to the Federal Rules of Bankruptcy Procedure Prescribed 

by the Court, Pursuant to 28 U. S. C. 2075, H. R. Doc. 102–80, p. 558,

reprinted in 11 Bankruptcy Rules Documentary History (1990–1991)

(referencing only the fact of the amendment). It may have been to

consolidate and reconcile the separate forms debtors were previously 

required to file in Chapter 7 and Chapter 13 cases, see, e.g., In re 

Beshirs, 236 B. R. 42, 46−47 (Bkrtcy. Ct. Kan. 1999), or simply to make

it easier for trustees to evaluate whether certain assets were viable 

candidates for liquidation. Whatever the case, it did not result from 

statutory changes to the Code provisions that govern this dispute. 15Because the Code provisions we rely upon to resolve this case do

not obligate trustees to object under Rule 4003(b) to a debtor’s estimate 

of the market value of an asset in which the debtor claims an exempt 

interest, our analysis does not depend on whether the schedule of

“property claimed as exempt” (currently Schedule C) calls for such an 

estimate or not. We engage the point only because Reilly suggests that

the 1991 schedule revisions requiring debtors to provide such an 

estimate on the schedule of “property claimed as exempt” means that 
16 SCHWAB v. REILLY 

Opinion of the Court 

III 

The Court of Appeals erred in holding that our decision 

in Taylor dictates a contrary conclusion. See 534 F. 3d, at 

178. Taylor does not rest on what the debtor “meant” to 

exempt. 534 F. 3d, at 178. Rather, Taylor applies to the

face of a debtor’s claimed exemption the Code provisions

that compel reversal here.

The debtor in Taylor, like the debtor here, filed a schedule of exemptions with the Bankruptcy Court on which the 

debtor described the property subject to the claimed exemption, identified the Code provision supporting the

exemption, and listed the dollar value of the exemption. 

Critically, however, the debtor in Taylor did not, like the 

debtor here, state the value of the claimed exemption as a 

specific dollar amount at or below the limits the Code

allows. Instead, the debtor in Taylor listed the value of 

the exemption itself as “$ unknown”: 

Schedule B-4. ─Property Claimed Exempt 

Type of 

Property 

Location, Description,

and, So Far As Relevant 

to the Claim of Exemption, Present Use of 

Property 

Specify the 

Statute 

Creating the 

Exemption 

Value Claimed 

Exempt 

Proceeds from 

lawsuit 

Winn v. TWA 

Claim for lost wages 

11 U. S. C. 

522(b)(d) 

$ unknown 

The interested parties in Taylor agreed that this entry 

—————— 

the estimate must be viewed as part of the exemption and is therefore 

subject to the Rule. See Brief for Respondent 40−41. The dissent 

ranges far beyond even this unavailing argument in suggesting that the

market value estimate served as “an essential factor in determining the 

nature of the ‘interest’ a debtor lists as exempt,” post, at 9, n. 9, even 

before 1991 when that estimate did not appear on the schedule of

“property claimed as exempt” (former Schedule B−4), but rather appeared on former “Schedule B–2,” post, at 7, n. 6, which merely listed

the debtor’s “personal property” as of the date of the petition filing.

Interim Fed. Rule Bkrtcy. Proc. Official Form 6, Schedules B–2, B–4 

(1979). 
Cite as: 560 U. S. ____ (2010) 17 

Opinion of the Court 

rendered the debtor’s claimed exemption objectionable on 

its face because the exemption concerned an asset (lawsuit

proceeds) that the Code did not permit the debtor to exempt beyond a specific dollar amount. See 503 U. S., at 

642. Accordingly, although this case and Taylor both 

concern the consequences of a trustee’s failure to object to

a claimed exemption within the time specified by Rule 

4003, the question arose in Taylor on starkly different 

facts. In Taylor, the question concerned a trustee’s obligation to object to the debtor’s entry of a “value claimed

exempt” that was not plainly within the limits the Code 

allows. In this case, the opposite is true. The amounts 

Reilly listed in the Schedule C column titled “Value of

Claimed Exemption” are facially within the limits the

Code prescribes and raise no warning flags that warranted

an objection.16 See supra, at 8. 

Taylor supports this conclusion. In holding otherwise,

the Court of Appeals focused on what it described as Taylor’s “‘unstated premise’” that “‘a debtor who exempts the

entire reported value of an asset is claiming the “full

amount,” whatever it turns out to be.’” 534 F. 3d, at 179. 

But Taylor does not rest on this premise. It establishes 

and applies the straightforward proposition that an interested party must object to a claimed exemption if the 

—————— 

16See, e.g., Barroso-Herrans, 524 F. 3d, at 345 (explaining that Schedule C entries listing the value of a claimed exemption as “unknown,” 

“to be determined,” or “100%” are “ ‘red flags to trustees and creditors,’ 

and therefore put them on notice that if they do not object, the whole 

value of the asset—whatever it might later turn out to be—will be

exempt” (quoting 1 Collier on Bankruptcy ¶8.06[1][c][ii] (15th ed. rev. 

2007); citation and some internal quotation marks omitted)). The 

dissent concedes that a debtor’s exemption schedule “must give notice

sufficient to cue the trustee that an objection may be in order,” and 

rightly observes that the sufficiency of a particular cue, or “ ‘ warning 

flag,’ ” may lie “in the eye of the beholder.” Post, at 14. In this case, 

however, the Code itself breaks the tie between what might otherwise 

be two equally tenable views. 
18 SCHWAB v. REILLY 

Opinion of the Court 

amount the debtor lists as the “value claimed exempt” is

not within statutory limits, a test the value ($ unknown)

in Taylor failed, and the values ($8,868 and $1,850) in this 

case pass.

We adhere to this test. Doing otherwise would not only 

depart from Taylor and ignore the presumption that parties act lawfully and with knowledge of the law, cf. United 

States v. Budd, 144 U. S. 154, 163 (1892); it would also 

require us to expand the statutory definition of “property

claimed as exempt” and the universe of information an 

interested party must consider in evaluating the validity

of a claimed exemption. Even if the Code allowed such 

expansions, they would be ill advised. As evidenced by the

differences between Reilly’s Schedule C and the schedule

in Taylor, preprinted bankruptcy schedules change over 

time. Basing the definition of the “property claimed as

exempt,” and thus an interested party’s obligation to 

object under §522(l), on inferences that party must draw

from evolving forms, rather than on the facial validity of 

the value the debtor assigns the “property claimed as 

exempt” as defined by the Code, would undermine the 

predictability the statute is designed to provide.17 For all 

of these reasons, we take Reilly’s exemptions at face value 

and find them unobjectionable under the Code, so the 

—————— 

17Reilly insists that our conclusion should nonetheless be avoided

because “procedures that burden the debtor’s exemption entitlements,

like those that impair a debtor’s discharge generally, are to be construed narrowly.” Brief for Respondent 33 (citing Kawaauhau v. 

Geiger, 523 U. S. 57, 62 (1998)). This argument misses the mark for 

two reasons. First, the only burdens our conclusion imposes are burdens the Code itself prescribes, specifically, the burdens the Code

places on debtors to state their claimed exemptions accurately and to

conform such claims to statutory limits. Second, and in any event, 

Geiger and the other cases Reilly cites emphasize in the discharge 

context the importance of limiting exceptions to discharge to “those

plainly expressed,” a principle that supports our approach here. Ibid. 

(internal quotation marks omitted). 
Cite as: 560 U. S. ____ (2010) 19 

Opinion of the Court 

objection deadline we enforced in Taylor is inapplicable

here. 

IV 

In a final effort to defend the Court of Appeals’ judgment, Reilly asserts that her approach to §522(l) is necessary to vindicate the Code’s goal of giving debtors a fresh 

start, and to further its policy of discouraging trustees and 

creditors from sleeping on their rights. See Brief for Respondent 21, 55–68. Although none of Reilly’s policy 

arguments can overcome the Code provisions or the aspects of Taylor that govern this case, our decision fully

accords with all of the policies she identifies. We agree

that “exemptions in bankruptcy cases are part and parcel

of the fundamental bankruptcy concept of a ‘fresh start.’” 

Brief for Respondent 21 (quoting Rousey, 544 U. S., at 

325); see Marrama v. Citizens Bank of Mass., 549 U. S. 

365, 367 (2007). We disagree that this policy required

Schwab to object to a facially valid claim of exemption on

pain of forfeiting his ability to preserve for the estate any 

value in Reilly’s business equipment beyond the value of 

the interest she declared exempt. This approach threatens to convert a fresh start into a free pass. 

As we emphasized in Rousey, “[t]o help the debtor obtain

a fresh start, the Bankruptcy Code permits him to withdraw from the estate certain interests in property, such as 

his car or home, up to certain values.” 544 U. S., at 325 

(emphasis added). The Code limits exemptions in this

fashion because every asset the Code permits a debtor to

withdraw from the estate is an asset that is not available 

to his creditors. See §522(b)(1). Congress balanced the

difficult choices that exemption limits impose on debtors

with the economic harm that exemptions visit on creditors, 

and it is not for us to alter this balance by requiring trustees to object to claimed exemptions based on form entries 

beyond those that govern an exemption’s validity under 
20 SCHWAB v. REILLY 

Opinion of the Court 

the Code. See Lamie, 540 U. S., at 534, 538; Hartford, 530 

U. S., at 6; United States v. Locke, 471 U. S. 84, 95 (1985). 

Reilly nonetheless contends that our approach creates 

perverse incentives for trustees and creditors to sleep on

their rights. See Brief for Respondent 64, n. 10, 67–69. 

Again, we disagree. Where a debtor intends to exempt

nothing more than an interest worth a specified dollar 

amount in an asset that is not subject to an unlimited or 

in-kind exemption under the Code, our approach will 

ensure clear and efficient resolution of competing claims to

the asset’s value. If an interested party does not object to

the claimed interest by the time the Rule 4003 period 

expires, title to the asset will remain with the estate pursuant to §541, and the debtor will be guaranteed a payment in the dollar amount of the exemption. If an interested party timely objects, the court will rule on the

objection and, if it is improper, allow the debtor to make

appropriate adjustments.18 

Where, as here, it is important to the debtor to exempt

the full market value of the asset or the asset itself, our 

decision will encourage the debtor to declare the value of

her claimed exemption in a manner that makes the scope 

of the exemption clear, for example, by listing the exempt 

value as “full fair market value (FMV)” or “100% of 

—————— 

18We disagree that Reilly’s approach to exemptions would more efficiently dispose of competing claims to the asset. On Reilly’s view, a

trustee would be encouraged (if not obliged) to object to claims to 

exempt a specific dollar amount of interest in an asset whenever the 

value of the exempt interest equaled the debtor’s estimate of the asset’s 

market value. Where the debtor genuinely intended to claim nothing 

more than the face value of the exempt interest (which is rational if a

debtor wishes to ensure that his aggregate exemptions remain within

statutory limits), such an approach would engender needless objections

and litigation, particularly if the equation that would precipitate the 

objection often results from a default software entry. See Reply Brief

for Petitioner 15; Brief for Nat. Assn. of Bankruptcy Trustees 13, n. 15. 
Cite as: 560 U. S. ____ (2010) 21 

Opinion of the Court 

FMV.”19 Such a declaration will encourage the trustee to

object promptly to the exemption if he wishes to challenge

it and preserve for the estate any value in the asset beyond relevant statutory limits.20 If the trustee fails to 

object, or if the trustee objects and the objection is overruled, the debtor will be entitled to exclude the full value 

of the asset. If the trustee objects and the objection is

sustained, the debtor will be required either to forfeit the 

portion of the exemption that exceeds the statutory allowance, or to revise other exemptions or arrangements with

her creditors to permit the exemption. See Fed. Rule 

—————— 

19The dissent’s observations about the poor fit between our admonition and a form entry calling for a dollar amount, see post, at 15, simply

reflect the tension between the Code’s definition of “property claimed

as exempt” (i.e., an interest, not to exceed a certain dollar amount, in 

Reilly’s business equipment) and Reilly’s attempt to convert into a

dollar value an improper claim to exempt the equipment itself, “ ‘whatever [its value] turns out to be.’ ” In re Reilly, 534 F. 3d 173, 178−179 

(CA3 2008). As the dissent concedes, “[s]ection 522(d) catalogs exemptions of two types.” Post, at 7, n. 5. “Most exemptions—and all of those

Reilly invoked—place a monetary limit on the value of the property the

debtor may reclaim,” and such exemptions are distinct from those made

pursuant to Code provisions that “authoriz[e] reclamation of the property in full without any cap on value.” Ibid. Nothing about Reilly’s

Schedule entries establishes that Schwab should have treated Reilly’s 

claim for $10,718, an unobjectionable amount under the Code provisions she expressly invoked, as an objectionable claim for thousands of

dollars more than those provisions allow, or as a claim for an uncapped 

exemption under Code provisions she did not invoke and the dissent

admits are “not at issue here.” Ibid. 20A trustee will not always file an objection. As the United States 

observes, Schwab did not do so in this case with respect to certain 

assets (perishable foodstuffs from Reilly’s commercial kitchen) that 

could not be readily sold. See Brief for United States as Amicus Curiae 

28, n. 7 (explaining that Schwab could have objected to Reilly’s claim of 

a wildcard exemption for an interest in the food totaling $2,036 because 

this claim, combined with her wildcard claims for an interest of $8,868 

in her business equipment and interests totaling $26 in her bank

accounts, placed the total value of the interests she claimed exempt 

under the wildcard provision $975 above then-applicable limits). 
22 SCHWAB v. REILLY 

Opinion of the Court 

Bkrtcy. Proc. 1009(a). Either result will facilitate the 

expeditious and final disposition of assets, and thus enable 

the debtor (and the debtor’s creditors) to achieve a fresh 

start free of the finality and clouded-title concerns Reilly 

describes. See Brief for Respondent 57–59 (arguing that 

“[u]nder [Schwab’s] interpretation of Rule 4003(b), a

debtor would never have the certainty of knowing whether 

or not he or she may keep her exempted property until the

case had ended”); id., at 66.21 

For all of these reasons, the policy considerations Reilly 

cites support our approach. Where, as here, a debtor 

accurately describes an asset subject to an exempt interest

and on Schedule C declares the “value of [the] claimed 

exemption” as a dollar amount within the range the Code 

allows, interested parties are entitled to rely upon that

value as evidence of the claim’s validity. Accordingly, we

hold that Schwab was not required to object to Reilly’s

claimed exemptions in her business equipment in order to 

—————— 

21Reilly’s clouded-title argument arises only if one accepts her flawed

conception of the exemptions in this case. According to Reilly, “once the

thirty-day deadline passed without objection” to her claim, she was 

“entitled to know that she would emerge from bankruptcy with her 

cooking equipment intact.” Brief for Respondent 57. There are two 

problems with this argument. First, it assumes that the property she 

claimed as exempt was the full value of the equipment. That assumption is incorrect for the reasons we explain. Second, her argument

assumes that a claim to exempt the full value of the equipment would,

if unopposed, entitle her to the equipment itself as opposed to a payment equal to the equipment’s full value. That assumption is at least 

questionable. Section 541 is clear that title to the equipment passed to

Reilly’s estate at the commencement of her case, and §§522(d)(5) and

(6) are equally clear that her reclamation right is limited to exempting

an interest in the equipment, not the equipment itself. Accordingly, it 

is far from obvious that the Code would “entitle” Reilly to clear title in

the equipment even if she claimed as exempt a “full” or “100%” interest

in it (which she did not). Of course, it is likely that a trustee who fails 

to object to such a claim would have little incentive to do anything but

pass title in the asset to the debtor. But that does not establish the 

statutory entitlement Reilly claims. 
Cite as: 560 U. S. ____ (2010) 23 

Opinion of the Court 

preserve the estate’s right to retain any value in the 

equipment beyond the value of the exempt interest. In 

reaching this conclusion, we express no judgment on the

merits of, and do not foreclose the courts from entertaining

on remand, procedural or other measures that may allow 

Reilly to avoid auction of her business equipment. 

* * * 

We reverse the judgment of the Court of Appeals for the 

Third Circuit and remand this case for further proceedings

consistent with this opinion. 

It is so ordered. 
_________________ 

_________________ 

Cite as: 560 U. S. ____ (2010) 1 

GINSBURG, J., dissenting 

SUPREME COURT OF THE UNITED STATES 

No. 08–538 

WILLIAM G. SCHWAB, PETITIONER v. NADEJDA

REILLY 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE THIRD CIRCUIT

[June 17, 2010] 

JUSTICE GINSBURG, with whom THE CHIEF JUSTICE and 

JUSTICE BREYER join, dissenting. 

In Chapter 7 bankruptcies, debtors must surrender to

the trustee-in-bankruptcy all their assets, 11 U. S. C.

§541, but may reclaim for themselves exempt property,

§522. Within 30 days after the meeting of creditors, the

trustee or a creditor may file an objection to the debtor’s

designation of property as exempt. Fed. Rule Bkrtcy. 

Proc. 4003(b). Absent timely objection, “property claimed 

[by the debtor] as exempt . . . is exempt.” §522(l).

The trustee in this case, petitioner William G. Schwab, 

maintains that the obligation promptly to object to exemption claims extends only to the qualification of an asset as

exemptible, not to the debtor’s valuation of the asset. 

Respondent Nadejda Reilly, the debtor-in-bankruptcy, 

urges that the timely objection requirement applies not 

only to the debtor’s designation of an asset as exempt; the

requirement applies as well, she asserts, to her estimate of

the asset’s market value. That is so, she reasons, because 

the asset’s current dollar value is critical to the determination whether she may keep the property intact and 

outside bankruptcy, or whether the trustee, at any time

during the course of the proceedings, may sell it. 

The Court holds that challenges to the debtor’s valuation of exemptible assets need not be made within the 30­
2 SCHWAB v. REILLY 

GINSBURG, J., dissenting 

day period allowed for “objection[s] to the list of property 

claimed as exempt.” Rule 4003(b). Instead, according to

the Court, no time limit constrains the trustee’s (or a 

creditor’s) prerogative to place at issue the debtor’s 

evaluation of the property as fully exempt. 

The Court’s decision drastically reduces Rule 4003’s 

governance, for challenges to valuation have been, until 

today, the most common type of objection leveled against

exemption claims. See 9 Collier on Bankruptcy ¶4003.04, 

p. 4003–15 (rev. 15th ed. 2009) (hereinafter Collier) (“Normally, objections to exemptions will focus primarily on

issues of valuation.”). In addition to departing from the

prevailing understanding and practice, the Court’s decision exposes debtors to protracted uncertainty concerning

their right to retain exempt property, thereby impeding

the “fresh start” exemptions are designed to foster. In 

accord with the courts below, I would hold that a debtor’s 

valuation of exempt property counts and becomes conclusive absent a timely objection. 

I 

Nadejda Reilly is a cook who operated a one-person 

catering business. Unable to cover her debts, she filed a 

Chapter 7 bankruptcy petition appending all required 

schedules and statements. Relevant here, her filings

included a form captioned “Schedule B - Personal Property,” which called for enumeration of “all personal property of the debtor of whatever kind.” App. 40a. On that 

all-encompassing schedule, Reilly listed “business equipment,” i.e., her kitchen equipment, with a current market

value of $10,718. Id., at 49a. 

Reilly also filed the more particular form captioned 

“Schedule C - Property Claimed as Exempt.” Id., at 56a. 

Schedule C contained four columns, the first headed “Description of Property”; the second, “Specify Law Providing

Each Exemption”; the third, “Value of Claimed Exemp­
Cite as: 560 U. S. ____ (2010) 3 

GINSBURG, J., dissenting 

tion”; and the fourth, “Current Market Value of Property

Without Deducting Exemptions.” Id., at 57a. In the first 

column of Schedule C, Reilly wrote, as she did in Schedule 

B’s description-of-property column: “See attached list of

business equipment.” Id., at 58a. On the list appended to

Schedules B and C, Reilly set out by hand a 31-item inventory of her restaurant-plus-catering-venture equipment.

Next to each item, e.g., “Dough Mixer,” “Gas stove,”

“Hood,” she specified, first, the purchase price and, next, 

“Today’s Market Value,” which added up to $10,718 for the

entire inventory. Id., at 51a–55a.1 

As the laws securing exemption of her kitchen equipment, Reilly specified in the second Schedule C column, 

§552(d)(6), the exemption covering trade tools, and 

§552(d)(5), the “wildcard” exemption. Id., at 58a.2 In the 

value-of-claimed-exemption column, she listed $1,850, 

then the maximum trade-tools exemption, and $8,868,

drawn from her wildcard exemption, amounts adding up 

to $10,718. Ibid. And in the fourth, current-marketvalue, column, she recorded $10,718, corresponding to the 

total market value she had set out in her inventory and

reported in Schedule B. Ibid. 

Before the 30-day clock on filing objections had begun to

run, an appraiser told Schwab that Reilly’s equipment was

worth at least $17,000. Brief for Petitioner 15; App. 164a.

Nevertheless, Schwab did not object to the $10,718 market

value Reilly attributed to her business equipment in 

—————— 

1Reilly’s Schedules B and C, and the inventory she attached to the

forms, are reproduced in an Appendix to this opinion. 2Unlike exemptions that describe the specific property debtors may 

preserve, e.g., 11 U. S. C. §522(d)(6) (debtor may exempt her “aggregate

interest, not to exceed [$1,850] in value, in any implements, professional books, or tool[s] of [her] trade”), the “wildcard” exemption permits a debtor to shield her “aggregate interest in any property” she 

chooses, up to a stated dollar limit, §522(d)(5); In re Smith, 640 F. 2d 

888, 891 (CA7 1981). 
4 SCHWAB v. REILLY 

GINSBURG, J., dissenting 

Schedule C and the attached inventory. Instead, he allowed the limitations period to lapse and then moved, 

unsuccessfully, for permission to sell the equipment at

auction. Id., at 141a–143a.3 

From Reilly’s filings, the Bankruptcy Judge found it 

evident that Reilly had claimed the property itself, not its

dollar value, as exempt. Id., at 168a–169a (“I know there’s 

an argument . . . that . . . the property identified as exempt

is really the [valuation] column, [i.e., $10,718,] but that’s

not what the forms say. The forms say property declared

as exempt and to see attached list. So, they’re exempting

all the property. . . . If the Trustee believes that . . . all the 

property cannot be exempt, [he] should object to it.”). 

The District Court and Court of Appeals similarly concluded that, by listing the identical amount, $10,718, as

the property’s market value and the value of the claimed 

exemptions, Reilly had signaled her intention to safeguard 

all of her kitchen equipment from inclusion in the bankruptcy estate. In re Reilly, 403 B. R. 336, 338–339 (MD 

Pa. 2006); In re Reilly, 534 F. 3d 173, 178 (CA3 2008).

Both courts looked to §522(l) and Federal Rule of Bankruptcy Procedure 4003(b), which state, respectively: 

“The debtor shall file a list of property that the 

debtor claims as exempt . . . . Unless a party in interest objects, the property claimed as exempt on such

list is exempt.” §522(l). 

—————— 

3Schwab informed Reilly at the meeting of creditors that he planned

to sell all of her business equipment. App. 137a. She promptly moved

to dismiss her bankruptcy petition, stating that her “business equipment . . . is necessary to her livelihood and art, and was a gift to her

from her parents.” Id., at 138a. She “d[id] not desire to continue with

the bankruptcy,” she added, because “she wishe[d] to continue in

restaurant and catering as her occupation.” Ibid. The Bankruptcy

Court denied Reilly’s dismissal motion simultaneously with Schwab’s 

motion to sell Reilly’s equipment. Id., at 149a–170a. 
Cite as: 560 U. S. ____ (2010) 5 

GINSBURG, J., dissenting 

“A party in interest may file an objection to the list of 

property claimed as exempt only within 30 days after 

the meeting of creditors held under §341(a) is concluded . . . . The court may, for cause, extend the time 

for filing objections if, before the time to object expires, a party in interest files a request for an extension.” Rule 4003(b).4 

Schwab having filed no objection within the allowable 

30 days, each of the tribunals below ruled that the entire

inventory of Reilly’s business equipment qualified as 

exempt in full. App. 168a; 403 B. R., at 339; 534 F. 3d, at 

178. The leading treatise on bankruptcy, the Court of 

Appeals noted, id., at 180, n. 4, is in accord: 

“Normally, if the debtor lists property as exempt, 

that listing is interpreted as a claim for exemption of 

the debtor’s entire interest in the property, and the 

debtor’s valuation of that interest is treated as the 

amount of the exemption claimed. Were it otherwise—that is, if the listing were construed to claim as 

exempt only that portion of the property having the

value stated—the provisions finalizing exemptions if 

no objections are filed would be rendered meaningless. 

The trustee or creditors could [anytime] claim that the

debtor’s interest in the property was greater than the 

value claimed as exempt and [then] object to the

debtor exempting his or her entire interest in the

property after the deadline for objections had passed.” 

9 Collier ¶4003.02[1], pp. 4003–4 to 4003–5. 

Agreeing with the courts below, I would hold that Reilly, 

by her precise identification of the exempt property, and

her specification of $10,718 as both the current market 

value of her kitchen equipment and the value of the 

—————— 

4 In 2008, this prescription was recodified without material change

and designated Rule 4003(b)(1). 
6 SCHWAB v. REILLY 

GINSBURG, J., dissenting 

claimed exemptions, had made her position plain: She

claimed as exempt the listed property itself—not the 

dollar amount, up to $10,718, that sale of the property by 

Schwab might yield. Because neither Schwab nor any 

creditor lodged a timely objection, the listed property

became exempt, reclaimed as property of the debtor, and 

therefore outside the bankruptcy estate the trustee is

charged to administer. 

II 

A 

 Pursuant to §522(l), Reilly filed a list of property she 

claimed as exempt from the estate-in-bankruptcy. Her 

filing left no doubt that her exemption claim encompassed 

her entire inventory of kitchen equipment. Schwab, in 

fact, was fully aware of the nature of the claim Reilly 

asserted. At the meeting of creditors, Reilly reiterated

that she sought to keep the equipment in her possession; 

she would rather discontinue the bankruptcy proceeding, 

she made plain, than lose her equipment. See supra, at 4, 

n. 3. Bankruptcy Rule 4003(b) requires the trustee, if he 

contests the debtor’s exemption claim in whole or part, to

file an objection within 30 days after the meeting of creditors. Absent a timely objection, “the property claimed as

exempt . . . is exempt.” §522(l); Rule 4003. That prescription should be dispositive of this case. 

The Court holds, however, that Schwab was not obliged 

to file a timely objection to the exemption Reilly claimed, 

and indeed could auction off her cooking equipment anytime prior to her discharge. In so holding, the Court decrees that no objection need be made to a debtor’s valuation of her property. 

To support the conclusion that Rule 4003’s timely objection requirement does not encompass the debtor’s estimation of her property’s market value, the Court homes in on 

the language of exemption prescriptions that are subject to 
Cite as: 560 U. S. ____ (2010) 7 

GINSBURG, J., dissenting 

a monetary cap.5 Those prescriptions, the Court points

out, “define the ‘property’ a debtor may ‘clai[m] as exempt’ 

as the debtor’s ‘interest’—up to a specified dollar 

amount—in the assets described in the category, not as 

the assets themselves.” Ante, at 10. So long as a debtor 

values her claimed exemption at a dollar amount below 

the statutory cap, the Court reasons, the claim is on-itsface permissible no matter the market value she ascribes

to the asset. To evaluate the propriety of Reilly’s declared

“interest” in her kitchen equipment, the Court concludes,

Schwab was obliged promptly to inspect “three, and only 

three, entries on Reilly’s Schedule C: the description of the

business equipment . . . ; the Code provisions governing 

the claimed exemptions; and the amounts Reilly listed in 

the column titled ‘value of claimed exemption.’” Ante, at 

12–13.6 

—————— 

5Section 522(d) catalogs exemptions of two types. Most exemptions—

and all of those Reilly invoked—place a monetary limit on the value of 

the property the debtor may reclaim. See, e.g., §522(d)(2) (“motor

vehicle”); §522(d)(3) (“household furnishings, household goods, wearing

apparel, appliances, books, animals, crops, or musical instruments”);

§522(d)(4) (“jewelry”). For certain exemptions not at issue here, the 

Bankruptcy Code authorizes reclamation of the property in full without 

any cap on value. See, e.g., §522(d)(7) (“unmatured life insurance 

contract”); §522(d)(9) (“[p]rofessionally prescribed health aids”);

§522(d)(11)(A) (“award under a crime victim’s reparation law”). 6 In support of its view that market value is not relevant to determining the “property claimed as exempt” for purposes of Rule 4003(b)’s

timely objection mandate, the Court observes that Schedule C did not 

require the debtor to list this information until 1991. Ante, at 14–15. 

Prior to 1991, however, debtors recorded market value on a different 

schedule. See Interim Fed. Rule Bkrtcy. Proc. Official Form 6, Schedule B–2 (1979) (requiring debtor to list the “[m]arket value of [her] 

interest [in personal property] without deduction for . . . exemptions

claimed”). Trustees assessing the “property claimed as exempt,” 

therefore, have always been able, from the face of the debtor’s filings, to

compare the value of the claimed exemption to the property’s declared 

market value. See Brief for National Association of Consumer Bankruptcy Attorneys et al. as Amici Curiae 34. 
8 SCHWAB v. REILLY 

GINSBURG, J., dissenting 

B 

The Court’s account, however, shuts from sight the vital

part played by the fourth entry on Schedule C—current

market value—when a capped exemption is claimed. A 

debtor who estimates a market value below the cap, and

lists an identical amount as the value of her claimed exemption, thereby signals that her aim is to keep the listed 

property in her possession, outside the estate-inbankruptcy. In contrast, a debtor who estimates a market 

value above the cap, and above the value of her claimed 

exemption, thereby recognizes that she cannot shelter the 

property itself and that the trustee may seek to sell it for 

whatever it is worth.7 Schedule C’s final column, in other 

words, alerts the trustee whether the debtor is claiming a 

right to retain the listed property itself as her own, a right

secured to her if the trustee files no timely objection.8 

Because an asset’s market value is key to determining 

—————— 

7By authorizing exemption of assets that a debtor would want to 

keep in kind, such as her jewelry and car, but limiting the exemptible 

value of this property, Congress struck a balance between debtors’

and creditors’ interests: Debtors can reclaim items helpful to their 

fresh start after bankruptcy, but only if those items are of modest 

value. Assets of larger worth, however, are subject to liquidation so

that creditors may obtain a portion of the item’s value. Cf. In re Price, 

370 F. 3d 362, 378 (CA3 2004) (“[B]ankruptcy law is bilateral, replete 

with protections and policy considerations favoring both debtors and 

creditors.”). 8The significance of market value is what differentiates capped exemptions from uncapped ones that permit debtors to exempt certain

property in kind regardless of its worth. See supra, at 7, n. 5. For 

uncapped exemptions, the nature of the property the debtor has reclaimed is clear: If the exemption is valid, the debtor gets the asset in 

full every time. For capped exemptions, however, market value is a 

crucial component in determining whether the debtor gets the item

itself or a sum of money representing a share of the item’s liquidation

value. Reading Bankruptcy Rule 4003(b) to require objections to 

valuation thus does not, as the Court contends, “elid[e] the distinction” 

between capped and uncapped exemptions, ante, at 12 (emphasis 

added), but instead accounts for that distinction. 
Cite as: 560 U. S. ____ (2010) 9 

GINSBURG, J., dissenting 

the character of the interest the debtor is asserting in that

asset, Rule 4003(b) is properly read to require objections to 

valuation within 30 days, just as the Rule requires timely 

objections to the debtor’s description of the property, the 

asserted legal basis for the exemption, and the claimed

value of the exemption. See 4 Collier ¶522.05[1], p. 522–

28 (rev. 15th ed. 2005) (“[T]o evaluate the propriety of the

debtor’s claim of exemption,” trustees need the information in all four columns of Schedule C; “[market] value” is 

“essential” to judging whether the claim is proper because 

“[e]xemption provisions often are limited according to . . . 

[the property’s] value.”). 9 

C 

Requiring objections to market valuation notably facilitates the debtor’s fresh start, and thus best fulfills the 

prime purpose of the exemption prescriptions. See, e.g., 

Burlingham v. Crouse, 228 U. S. 459, 473 (1913) (Bankruptcy provisions “must be construed” in light of policy “to

give the bankrupt a fresh start.”). See also Rousey v. 

—————— 

9Suggesting that this interpretation of Rule 4003(b) “lacks statutory

support,” ante, at 13, n. 11, the Court repeatedly emphasizes that the 

Bankruptcy Code defines the “property claimed as exempt,” to which a 

trustee must object, as “the debtor’s ‘interest’—up to a specified dollar 

amount—in the assets described in [capped exemption] categor[ies],” 

ante, at 10; see, e.g., ante, at 11; ibid., n. 9; ante, at 21, n. 19. But the 

commonly understood definition of a property “interest” is “[a] legal

share in something; all or part of a legal or equitable claim to or right 

in property. . . . Collectively, the word includes any aggregation of 

[such] rights.” Black’s Law Dictionary 828 (8th ed. 2004). Schwab, 

therefore, could not comprehend whether Reilly claimed a monetary or 

an in-kind “interest” in her kitchen equipment without comparing her

market valuation of the equipment to the value of her claimed exemption. See supra, at 8–9. In line with the statutory text, a debtor’s 

market valuation is an essential factor in determining the nature of the 

“interest” a debtor lists as exempt. Bankruptcy “forms, rules, treatise 

excerpts, and policy considerations,” ante, at 7, n. 5, corroborate, rather 

than conflict with, this reading of the Code. 
10 SCHWAB v. REILLY 

GINSBURG, J., dissenting 

Jacoway, 544 U. S. 320, 325 (2005); United States v. Security Industrial Bank, 459 U. S. 70, 72, n. 1 (1982); ante, at 

19. The 30-day deadline for objections, this Court has 

recognized, “prompt[s] parties to act and . . . produce[s] 

finality.” Taylor v. Freeland & Kronz, 503 U. S. 638, 644 

(1992). As “there can be no possibility of further objection

to the exemptions” after this period elapses, the principal

bankruptcy treatise observes, “if the debtor is not yet in

possession of the property claimed as exempt, it should be 

turned over to [her] at this time to effectuate fully the 

fresh start purpose of the exemptions.” 9 Collier 

¶4003.03[3], p. 4003–13.

With the benefit of closure, and the certainty it brings,

the debtor may, at the end of the 30 days, plan for her

future secure in the knowledge that the possessions she

has exempted in their entirety are hers to keep. See 534 

F. 3d, at 180. If she has reclaimed her car from the estate, 

for example, she may accept a job not within walking 

distance. See Brief for National Association of Consumer 

Bankruptcy Attorneys et al. as Amici Curiae 2–3 (hereinafter NACBA Brief). Or if she has exempted her kitchen 

equipment, she may launch a new catering venture. See 

App. 138a (Reilly “wishe[d] to continue in restaurant and 

catering as her occupation” postbankruptcy.).

By permitting trustees to challenge a debtor’s valuation

of exempted property anytime before discharge, the Court 

casts a cloud of uncertainty over the debtor’s use of assets 

reclaimed in full. If the trustee gains a different opinion of 

an item’s value months, even years, after the debtor has 

filed her bankruptcy petition,10 he may seek to repossess 

the asset, auction it off, and hand the debtor a check for 

—————— 

10Schwab states that “[c]ases in which there are assets to administer

. . . can take ‘one to four years’ to complete.” Brief for Petitioner 32 

(quoting Dept. of Justice, U. S. Trustee Program, Preliminary Report on

Chapter 7 Asset Cases 1994 to 2000, p. 7 (June 2001)). 
Cite as: 560 U. S. ____ (2010) 11 

GINSBURG, J., dissenting 

the dollar amount of her claimed exemption.11 With this 

threat looming until discharge, “[h]ow can debtors reasonably be expected to restructure their affairs”? NACBA 

Brief 25. See In re Polis, 217 F. 3d 899, 903 (CA7 2000) 

(Posner, J.) (“If the assets sought to be exempted by the 

debtor were not valued at a date early in the bankruptcy

proceeding, neither the debtor nor the creditors would 

know who had the right to them.”). 

III 

The Court and Schwab raise three concerns about reading Rule 4003 to require timely objection to the debtor’s

estimate of an exempt asset’s market value: Would trustees face an untoward administrative burden? Would 

trustees lack fair notice of the need to object? And would 

debtors be tempted to undervalue their property in an 

effort to avoid the monetary cap on exemptions? In my

judgment, all three questions should be answered no. 

A 

The Court suggests that requiring timely objections to a 

debtor’s valuation of exempt property would saddle trustees with an unmanageable load. See ante, at 18 (declining to “expand . . . the universe of information an interested party must consider in evaluating the validity of a 

claimed exemption”). See also Brief for Petitioner 32–33; 

Brief for United States as Amicus Curiae 24.12 But trus­

—————— 

11Money generated by liquidation of an asset will often be of less

utility to a debtor, who will have to pay more to replace the item. See 

H. R. Rep. No. 95–595, p. 127 (1977) (noting that “household goods have

little resale value” but “replacement costs of the goods are generally 

high”). 12This concern is questionable in light of the prevailing practice, for, 

as earlier noted, valuation objections are the most common Rule 

4003(b) challenge. See supra, at 2. By lopping off valuation disagreements from the timely objection requirement, see, e.g., ante, at 10–11, 

n. 8, the Court so severely shrinks the Rule’s realm that this question 
12 SCHWAB v. REILLY 

GINSBURG, J., dissenting 

tees, sooner or later, must attempt to ascertain the market 

value of exempted assets. They must do so to determine

whether sale of the items would likely produce surplus 

proceeds for the estate above the value of the claimed 

exemption, see §704(a)(1); the only question, then, is when 

this market valuation must occur—(1) within 30 days or

(2) at any time before discharge? Removing valuation

from Rule 4003’s governance thus does little to reduce the 

labors trustees must undertake. 

The 30-day objection period, I note, does not impose on 

trustees any additional duty, but rather guides the exercise of existing responsibilities; under Rule 4003(b), a 

trustee must rank evaluation of the debtor’s exemptions as 

a priority item in his superintendence of the estate.13 And 

if the trustee entertains any doubt about the accuracy of a

debtor’s estimation of market value, the procedure for 

interposing objections is hardly arduous. The trustee need 

only file with the court a simple declaration stating that 

an item’s value exceeds the amount listed by the debtor.14 

—————— 

arises: Why are trustees granted a full 30 days to lodge objections?

Under the Court’s reading of the Rule, trustees need only compare a 

debtor’s Schedule C to the text of the exemption prescriptions to assess

an exemption claim’s facial validity, with no further investigation 

necessary. That comparison should take no more than minutes, surely

not a month. 13Trustees, it bears noting, historically had valuation duties far more 

onerous than they have today. Rule 4003’s predecessor required 

trustees in the first instance, rather than debtors, to estimate the 

market value of property claimed as exempt. See Rule 403(b) (1975). 

Trustees had to provide this valuation to the court within 15 days of

their appointment. See ibid. 14The leading bankruptcy treatise supplies an illustrative valuation

objection:

“[Name of Trustee], the duly qualified and acting trustee of the estate

of the debtor, would show the court the following: 

“1. The debtor is not entitled under [the automobile exemption] to an 

interest of more than $3,225 in an automobile. The automobile claimed 

by debtor as exempt . . . has a value substantially greater than $3,225. 
Cite as: 560 U. S. ____ (2010) 13 

GINSBURG, J., dissenting 

If the trustee needs more than 30 days to assess market 

value, moreover, the time period is eminently extendable.

Rule 4003(b) prescribes that a trustee may, for cause, ask 

the court for an extension of the objection period. Alternatively, the trustee can postpone the conclusion of the 

meeting of creditors, from which the 30-day clock runs, 

simply by adjourning the meeting to a future date. Rule 

2003(e). A trustee also may examine the debtor under

oath at the creditors’ meeting, Rule 2003(b)(1); if he gathers information impugning her exemption claims, he may 

ask the bankruptcy court to hold a hearing to determine

valuation issues, Rule 4003(c). See Taylor, 503 U. S., at 

644 (“If [the trustee] did not know the value of [a claimed 

exemption], he could have sought a hearing on the issue 

. . . or . . . asked the Bankruptcy Court for an extension of 

time to object.”). See also NACBA Brief 19, 21–23 (listing 

ways trustees may enlarge the limitations period for 

objections). Trustees, in sum, have ample mechanisms at

their disposal to gain the time and information they need

to lodge objections to valuation. 

B 

On affording trustees fair notice of the need to object, 

the Court emphasizes that a debtor must list her claimed 

exemptions “in a manner that makes the scope of the 

exemption clear.” Ante, at 20. If a debtor wishes to exempt property in its entirety, for example, the Court counsels her to write “full fair market value (FMV)” or “100% of 

FMV” in Schedule C’s value-of-claimed-exemption column. 

—————— 

. . . . . 

“WHEREFORE Trustee prays that the court determine that debtor is

not entitled to . . . the exemptio[n] claimed by him, that the [property

claimed as exempt] which [is] disallowed be turned over to the trustee

herein as property of the estate, and that he have such other and 

further relief as is just.” 13A Collier §CS17.14, p. CS 17–22 (rev. 15th 

ed. 2009). See also Rules 9013–9014. 
14 SCHWAB v. REILLY 

GINSBURG, J., dissenting 

Ante, at 20–21 (internal quotation marks omitted). See 

also Tr. of Oral Arg. 6–7, 26–29; In re Hyman, 967 F. 2d 

1316, 1319–1320, n. 6 (CA9 1992) (Trustees must be able 

to assess the validity of an exemption from the face of a 

debtor’s schedules.). Our decision in Taylor v. Freeland & 

Kronz, the Court notes, is instructive. In Taylor, the 

debtor recorded the term “$ unknown” as the value of a 

claimed exemption, which, the Court observes, raised a 

“warning fla[g]” because the value “was not plainly within

the limits the Code allows.” Ante, at 17. 

True, a debtor’s schedules must give notice sufficient to

cue the trustee that an objection may be in order. But a 

“warning flag” is in the eye of the beholder: If a debtor 

lists identical amounts as the market value of exempted 

property and the value of her claimed exemption, she has, 

on the face of her schedules, reclaimed the entire asset just

as surely as if she had recorded “100% of FMV” in Schedule C’s value-of-claimed-exemption column. See Brief for 

Respondent 36. See also 9 Collier ¶4003.03[3], p. 4003–14 

(“Only when a debtor’s schedules specifically value the

debtor’s interest in the property at an amount higher than 

the amount claimed as exempt can it be argued that a part

of the debtor’s interest in property has not been exempted.” (emphasis added)).

In this case, by specifying $10,718 as both the current

market value of her kitchen equipment and the value of 

her claimed exemptions, Reilly gave notice that she had 

reclaimed the listed property in full. See supra, at 2–6. 

To borrow the Court’s terminology, Reilly waved a “warning flag” that should have prompted Schwab to object if he

believed the equipment could not be reclaimed in its entirety because its value exceeded the statutory cap. 534 

F. 3d, at 179. See 4 Collier ¶522.05[2][b], p. 522–33 (“Normally, if a debtor lists an asset as having a particular 

value in the schedules and then exempts that value, the 

schedules should be read as a claim of exemption for the 
Cite as: 560 U. S. ____ (2010) 15 

GINSBURG, J., dissenting 

entire asset, to which the trustee should object if the 

trustee believes the asset has been undervalued.”). 

Training its attention on trustees’ needs, moreover, the

Court overlooks the debtor’s plight. As just noted, the 

Court counsels debtors wishing to exempt an asset in full 

to write “100% of FMV” or “full FMV” in the value-ofclaimed-exemption column. But a debtor following the

instructions that accompany Schedule C would consider 

such a response nonsensical, for those instructions direct

her to “state the dollar value of the claimed exemption in 

the space provided.” Fed. Rule Bkrtcy. Proc. Official Form 

6, Schedule C, Instruction 5 (1991) (emphasis added).

Chapter 7 debtors are often unrepresented. How are they 

to know they must ignore Schedule C’s instructions and

employ the “warning flag” described today by the Court, if 

they wish to trigger the trustee’s obligation to object to 

their market valuation in a timely fashion? See In re 

Anderson, 377 B. R. 865, 875 (Bkrtcy. App. Panel CA6 

2007).15 

C 

Schwab finally urges that requiring timely objections to 

a debtor’s market-value estimations “would give debtors a 

perverse incentive to game the system by undervaluing 

their assets.” Brief for Petitioner 35; see Brief for United 

States as Amicus Curiae 27. The Court rejected an argument along these lines in Taylor, and should follow suit 

here. Multiple measures, Taylor explained, discourage

undervaluation of property claimed as exempt. 503 U. S., 

—————— 

15Trustees, in contrast, are repeat players in bankruptcy court; if this 

Court required timely objections to market valuation, trustees would, 

no doubt, modify their practices in response. See 1 Collier 

¶8.06[1][c][ii], p. 8–75 (rev. 15th ed. 2009) (“Since Taylor [v. Freeland & 

Kronz, 503 U. S. 638 (1992)], trustees rarely fail to closely scrutinize

vague exemption claims.”). Moreover, because valuation objections are 

already the norm, see supra, at 2, and 11, n. 12, few trustees would 

have to adjust their behavior. 
16 SCHWAB v. REILLY 

GINSBURG, J., dissenting 

at 644. Among those measures: The debtor files her 

exemption claim under penalty of perjury. See Rule 

1008. She risks judicial sanction for signing documents

not well grounded in fact. Rule 9011. And proof of fraud 

subjects her to criminal prosecution, 18 U. S. C. §152; 

extends the limitations period for filing objections to 

Schedule C, Rule 4003(b); and authorizes denial of discharge, 11 U. S. C. §727(a)(4)(B). See also NACBA Brief 

29–33 (detailing additional checks against inadequate or 

inaccurate filings). 

Furthermore, the objection procedure is itself a safeguard against debtor undervaluation. If a trustee suspects that the market value of property claimed as exempt 

may exceed a debtor’s estimate, he should do just what 

Rule 4003(b) prescribes: “[F]ile an objection . . . within 30

days after the meeting of creditors.” 

* * * 

For the reasons stated, I would affirm the Third Circuit’s judgment. 
GINSBURG, J., dissenting 

Cite as: 560 U. S. ____ (2010) 17 

Appendix to opinion of GINSBURG, J. 

APPENDIX
GINSBURG, J., dissenting 

18 SCHWAB v. REILLY 

Appendix to opinion of GINSBURG, J. 
GINSBURG, J., dissenting 

Cite as: 560 U. S. ____ (2010) 19 

Appendix to opinion of GINSBURG, J. 
GINSBURG, J., dissenting 

20 SCHWAB v. REILLY 

Appendix to opinion of GINSBURG, J. 
GINSBURG, J., dissenting 

Cite as: 560 U. S. ____ (2010) 21 

Appendix to opinion of GINSBURG, J. 
GINSBURG, J., dissenting 

22 SCHWAB v. REILLY 

Appendix to opinion of GINSBURG, J.