[ PUBLISH] IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

________________________ No. 14

- 14514

________________________ D.C. Docket No s . 1:13

- cv - 00209

- JRH

- BKE ; 11

- bkc

- 10218

- SDB In Re: THOMAS J. MCFARLAND, Debtor.

___________________________________________________ THOMAS J. MCFARLAND, Plaintiff

- Appellant,

versus A. STEPHENSON WALLACE, Defendant

- Appellee.

________________________ Appeal from the United States District Court for the Southern District of Georgia

________________________ (June 22, 2015) Case: 14-14514 Date Filed: 06/22/2015 Page: 1 of 252 Before TJOFLAT, WILLIAM PRYOR , and BALD OCK, * Circuit Judges. BALDOCK, Circuit Judge:
A fter filing for bankruptcy in 2011, Thomas McFarland claimed a number of exemptions from his bankruptcy estate. This appea l concerns two such claims , which are opposed by Trustee A. Stephenson Wallace

. Before us, McFarland requests exemption for: (1) an annuity worth well over $150,000; and (2) the nearly $15,000 cash surrender value of a whole life insurance policy

. The bankruptcy and district court s denied McFa rland both exemptions. Exercising jurisdiction under 28 U.S.C. § 158(d) , we affirm

. I. BACKGROUND A. Bankruptcy law Under federal law, w hen a debtor files for bankruptcy his property becomes part of the bankruptcy estate and is thereby exposed to creditors

. S ee 11 U.S.C. § 541(a)(1). The debtor , however, may exempt certain typ es of property from this
exposure . See id. § 522 ; Rousey v. Jacoway , 544 U.S. 320, 32 5 , 125 S.Ct. 1561,
1565

– 66 (2005)

. That said, the Bankruptcy Reform Act of 1978 permitted state s to opt out of the exemptions in 11 U.S.C. § 522(d)

. See 11 U.S.C. § 522(b)(2)

. If a state opts out, d ebtors in that state cannot utilize the § 522(d) exemptions, though

* Honorable Bobby R. Baldock, United States Circuit Judge for the Tenth Circuit, sitting by designation. Case: 14-14514 Date Filed: 06/22/2015 Page: 2 of 253 they may ta ke advantage of “ any exemptions available under state or local law and federal, non

- bankruptcy law. ” Sheehan v. Peveich , 574 F.3d 248, 251 (4th Cir. 2009) ; id. § 522(b)(3)

. In general, c ourts may not r efuse to honor an exemption

— state or federal

— “ absent a valid statutory basis for doing so.” Law v. Siegel , ___U.S.___, 134 S. Ct. 1188, 1196 (2014).
B ack in 1980 , Georgia opted out and created its own exemptions “for purposes of bankruptcy.” Ga. Code Ann. § 44

- 13

- 100 ; Silliman v. Cassell , 738
S.E. 2d 606, 609 (Ga. 2013)

. Two Georgia exemptions are at issue here. First, under Georgia Code § 44

- 13

- 100(a)(2)(E) , a bankruptcy debtor may exempt [a] payment under a pension, annuity , or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor a nd an y dependent of t he debtor[

. ] Ga. Code Ann. § 44

- 13

- 100(a)(2)(E) (emphases added). Under § 44

- 13

- 100(a)(9) ,

a bankruptcy debtor may exempt [t]he debtor’ s aggregate interest, not to exceed $2,000.00 in value , . . . in any accrued dividend or interest under, or loan or cash value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent [.] Id. § 44

- 13

- 100(a)(9) (emphases added). Also key here is a non - bankrupt cy provision from the Georgia Code

— s ection 33

- 25

- 11 (c)

— which states that [t]he cash surrender values of life insurance policies issued upon the lives of citizens or residents of this state, upon whatever form, shall not in any case be liable to attachment, garnishment, or legal process in favor of any creditor of the pers on w hose life is so insured . . . . Case: 14-14514 Date Filed: 06/22/2015 Page: 3 of 254 Id. § 33

- 25

- 11(c) (emphases added)

. Title 33 contains the Georgia Insurance Code, which “extensively and exhaustively regulates, at the state level, all aspects of the insurance industry in Georgia.” Cotton St ates Mut . Ins. Co. v. DeKalb C nty
. , 304 S.E.2d 386, 389 (Ga. 1983).
B. Facts Many y ear s ago, while serving in the United S t ates Army, Thomas McFarland o btained a mutual fund

. Then, in 198 4, McFarland took out a $30,000
whole life insu rance policy

. In 2006, at the age of 64 , McFarland transferred $150,000 from his mutual fund into a newly created annuity from The Hartford

c ompany (hereinafter the “Annuity”)

. T he Annuity contract designated McFarland’s wife as the sole beneficiary, a nd it stated that the Annuity’s
“Commencement Date”

— i.e. , the date the Annuity would begin disbursing payments

— was January 15, 2032. In February 2011, McFarland declared Chapter 7 bankru ptcy. He eventually
claimed , inter alia , the following two e xemptions under the law of Georgia, where he was domiciled

. First, McFarland claimed t he full cash surrender value (approximately $13,44 5) of his whole life insurance policy was exempt under Georgia Code § 33

- 25

- 11 (c) . Second, McFarland claim ed his A nnuity ( by then worth around $17 0,000 ) was e xempt under § 44

- 13

- 100(a)(2)(E)

. A. Stephenson Walla ce , the Trustee, objected . T he bankruptcy court restricted McFarland’s life

Case: 14-14514 Date Filed: 06/22/2015 Page: 4 of 255 insurance exemption to the $2,000 limit found in § 44

- 13

- 100(a )(9), In re McFarland , 481 B.R . 242 (Bankr. S.D. Ga. 2012), and it denied the A nnuity exemption in its entirety , Wallace v. McFarland ( In re McFarland ) , 500 B .R. 279 (Bankr. S.D. Ga. 2013). T he district court affirmed

. McFarland v. Wallace , 516 B.R. 665 (S.D. Ga. 2014).
II. STANDARD OF REVIEW “We review the district court’s decision to affirm the bankruptcy court de

novo , which allows us to assess the bankruptcy court’s judgment anew, employing the same standard of review the district court itself used.” In re Globe Mfg. Cor p. , 567 F.3d 1291, 1296 (11th Cir. 2009). “Thus, we review the bankruptcy court’s factual findings for clear error, and its legal conclusions de novo

. ” Id. Generally speaking, courts construe bankruptcy exemption statutes

— both
state and federal

— liberally in favor of bankruptcy debtors. See , e.g. , Lampe v. Williamson ( In re Lampe ) , 331 F.3d 750, 754 (10th Cir. 2003) ; Caron v. Farmington Nat’l Bank ( In re Caron ) , 82 F.3d 7, 1 0 (1st Cir. 1996); Silliman v

. Cassell ( In re Cassell ) , 443 B.R. 200 , 203 ( Bankr. N.D. Ga. 2010). 1 And under Rule 4003 (c) of the Federal Rules of Bankruptcy Procedure, the burden is on the party objecting to ex emption s to prove , by a preponderance of evidence, “that the exemptions are not properly claimed.” Thu s, we will cons true the exemptio ns here

1 We assume, without deciding, th at this is the correct position

.

Case: 14-14514 Date Filed: 06/22/2015 Page: 5 of 256 liberally in favor of McFarland, and we will look to Wallace for a demonstration that th e exemptions are inapplicable

. III. ANNUITY EXEMPTION McFarland con tends there is no valid statutory basis for ruling that Georgia intended to limit the relevant exemption statutes in ways unfavorable to him. Our analysis of his arguments b egins with the Hartford Annuity

. To review , Georgia Code § 44

- 13

- 100(a)(2)(E) allows a debtor to exempt , from the bankruptcy estate, a payment under an “annuity” or a “similar plan or
contract .” McFarland argues his A nnuity qualifies under this statute . The bankruptcy and district courts disagreed

. Thus, we must first determine whether McFarland’s A nnuity falls within the statutory definition of the term “annuity

. ” In our view, it does not. Helpfully, the Supre me Court of Georgia recently defined “annuity” as the word is used in § 44

- 13

- 100(a)(2)(E). See Silliman , 738 S.E.2d at 60 6

– 10 ; Silliman v. Cassell ( In re Cassell ), 688 F.3 d 1291 (11th Cir. 201 2) (certifying this
issue to the Georgia Supreme Court ). The court concluded that an “annuity” under § 44

- 13

- 100(a)(2)(E) “is an obligation to pay an amount at regular intervals for a certain or uncertain period of time.” Silliman , 738 S.E.2d at 610 (emphasis added) ; see also Rousey , 544 U.S. at 330 , 125 S.Ct. at 1569 (“[A]n annuity is ‘ an amount payable yearly or at other regular intervals

. . . . ’” (citation omitted)). Moreover , the court explained, “in deciding whether a partic ular annuity is of the type

Case: 14-14514 Date Filed: 06/22/2015 Page: 6 of 257 intended to come within the . . . § 44

- 13

- 100(a)(2)(E) exemption, the pertinent question is whether it provides income as a substitute for wages .” Silliman , 738 S.E.2d at 610 (emphasis added)

. A trustee must therefore show “ that the payments were not intended to substitute for wages.” Id. at 612

. Wallace has easily done so

. The bankruptcy court found (and the district court affirmed) that
McFarland’s A nnuity did not qualify under § 44

- 13

- 100(a)(2)(E) because it was structured more like a future investment than a subst itute fo r wages . See In re McFarland , 500 B.R. at 285. T he bankruptcy court emphasized that McFarland had never

— not once

— drawn money from the A nnuity , and that he did not intend to withdraw any funds during his lifetime

. See id. at 282, 285

– 86

. T his reasoning is sound , and the bankruptcy court’s findings of fact are not clearly erroneous

. Indeed , McFarland concedes on appeal that he has never drawn
money from the A nnuity and says he was not planning on doing so until 2032 at the earliest

— when he would be 90 years old. At a hearing before the bankruptcy
court in September 2011 , McFarland made similar admissions : [Wallace:] Have you taken any payments out from the annuity? [McFarland:] No, sir. I got that annuity mainly for my wife when I passed. [Wallace:] In fact, you don’t intend to take any payments out of that annuity, do you? [McFarland:] I hope not. I’m trying to save it for my wife. I’m seven years older than sh e is and according to the Vietnam mortality tables, my [life] expectancy is only 2017. Case: 14-14514 Date Filed: 06/22/2015 Page: 7 of 258 Aplt’s App. , Exhibit 7, at 15. A s if that was not enough , earlier in 2011 McFarland made similar statements at three separate examinations. See Ap l e’ s App. , Exhibit
1

- 32, at 45

– 46 (June 2011 bankruptcy examination ) (“[Wallace:] Do you intend to withdraw any money from this [Annuity] in your lifetime? [McFarland:] No, sir.”); id. , Exhibit 1

- 33, at 26 ( August 2011 deposition ) (“[McFarland:] “I considered the annuity to be critical to [my wife’s] future.”); id. , Exhibit 1

- 34, at 25

– 26 ( March/April 2011 creditor meeting ) (“[Bell:] But [the A nnuity is] just the way you chose to invest your money for retirement? [McFarland:] Yes. [Wallace:] Have you started drawing funds down from the annuity? [McFarland:] No.”). 2 T hese multiple , explicit concessions plainly preclud e McFarland from this
exemp tio n, as they make it imp ossible for him to claim with any believability that
his A nnuity was operating as , or truly intended to be , a wage subs titute distributed at “regular intervals” to him and his wife during his retirement

. 3
O ther courts have adhered to this logic when dealing with Georgia law . For example, a different bankruptcy court in the Southern District of Georgia recently

2 Interestingly, at this creditor meeting , McFarland claimed he had planned on drawing money from the Annuity when he turned 70 the next year. Aple’s App. , Exhibit 1

- 34, at 26. McFarland contradicted this assertion at subsequent hearings, however, and he has no t raised the assertion on appeal or provided any evidence to support such a claim.

3 Courts typically review a variety of factors in deciding whether an annuity q ualifies for exemption. S ee Silliman , 738 S.E.2d at 611 (referencing factors listed in Andersen v. Ries ( In re Andersen ) , 259 B.R. 687, 691

– 92 (8th Cir. BAP 200 1)). We will not sift through these factors point

- by

- point here, as the above concessions clearly answer Silliman ’s “pertinent question.” The bankruptcy court , however, did an admirable job of applyin g these factors to McFarland’s A nnuity. See In re McFarland , 500 B.R. at 284

– 87.

Case: 14-14514 Date Filed: 06/22/2015 Page: 8 of 259 ruled that a debtor could not exempt her annuity under § 44

- 13

- 100(a)(2)(E). See Boudreaux v. Sheffield ( In re Sheffield ), 507 B.R. 400 (Bankr. S.D. Ga. 2014)

. Sheffield’s “ choice to defer any and all payment s u nder the Annuity until she is ninety years old ,” the court wrote , “ shows that the Annuity was intended to be more like an investment and less like an exemptible contract to provide retirement funds. ” Id. at 408. A Northern District of Georgia b ankruptcy court spoke similarly in 2005. See In re Michael , 339 B.R. 798 (Bankr. N.D. Ga. 2005). There, the annuity in question deferred payments until 2050

— when the debtor would turn 85

— and the debtor had yet to receive any payments whatsoever. Id. at 800. For reasons that includ ed the following logic , the Michael court declined to exempt the annuity : A llowing an annuity contract established by a debtor to be exempt without some requirements that it be similar to other qualified retirement plans would provide debtors with a means of shielding assets from creditors prebankruptcy by purchasing annuities un der the facade of retirement planning

. The Annuity Contract in this case is no different than a savings account created on the premise that the funds placed in the account are to provide Debtor with future income

. . . . Id. at 806 (emphases added).
McF arland attempts t o avoid this obvious conclusion by arguing the A nnuity

was actually structured and intended to supplement his income. For starters , h e contends we should not go beyond the plain language of his A nnuity contract, which (he says) clearly meets Silliman ’s definition of an annuity. This argument

Case: 14-14514 Date Filed: 06/22/2015 Page: 9 of 2510 misses the mark . Unquestionably , Silliman held that a debtor’s annuity qualified for exemption, and the court indicated we should look at the “nature of the
contract ” for guidance. Silliman , 738 S.E. 2 d at 6 10

– 11

. That said , McFarland’s
contract here clearly states he will not begin to receive payments until 2032 , when McFarland would turn 90 years old. This confirms , rath er than undermines, our
belief that McFarland’s A nnuity was obviously not intended to be , or operating as , a wage replacement. See In re Sheffield , 507 B.R. at 408. It also greatly distingu ishes Silliman , where the qualifying annuity contract sta ted payments would begin within one month of the contract’s creation

. See 738 S.E.2d at 608. In any eve nt, r ather than strictly lim iting us to the contract’s text, Silliman
says we must also look to the “facts and circumstances surrounding the purchase of the annuity.” Id. at 6 10

– 11. And the facts here doom McFarland’s claim . A s discussed, McFarland has neve r withdrawn any money from his A nnuity and had

no real plans to do so . The Silliman debtor, in contrast, “purchased the annuity to replace her income . . . at the time of purchase , ” and she had already begun receiving payments when she filed for bankruptcy

. Id

. at 611. 4

4 The facts here also distinguish Rousey , wh ich is the Supreme Court decision most on point

. Rousey held that two debtors’ IRA accounts qualified as “similar plan[s] or contract[s]” under 11 U.S.C. § 522(d)(10)(E) , which parallel s Georgia Code § 44

- 13

- 100(a)(2)(E). See 544 U.S. at 322

– 24, 125 S.Ct . at 1564

– 65

. To be precise , the Court determined that “the income the Rouseys will derive from their IRAs is . . . income that substit utes for wages

. ” Id. at 331 , 125 S.Ct. at 1569 (emphasis added)

. In reach ing this conclusion, the Court found that distribution from the I RAs was scheduled “to begin at the latest in the calendar year after the year in whi ch the accountholder turns 70 1⁄2 ” and that tax penalties were in place “to ensure that the beneficiary

Case: 14-14514 Date Filed: 06/22/2015 Page: 10 of 2511 In an alternati ve vein, McFarland insists we should rely on additional testimony from all the hearings cited above to exempt his Annuity

. For example,
McFarland ’s son, who was also his financial advisor, testified that the A nnuity was originally intended to “ provide a lifetime income stream.” See Aplt’s App. , Exhibit 7, at 53

– 54. And McFarland testified the Annuity was intended both for his wife after he died and as a backup source of funds whil e he lived “if we needed it.” Id. at 72. McFarland’s testimony is easily dismissed, as the co pious concessions above demonstrate that McFarland never “needed” to use the Annuity, nor did he ever plan on “need[ing]” to use the Annuity. Moreover, his son’s testimony is taken out of context. Soon after making the above statement, his son clarified th at the Annuity was mostly meant to provide for McFarland’s wife after he died. See id. at 57 (“[Wallace:] So did he purchase this annuity to cover his future income or to . . . leave an inheritance for your mother? [Son:] It was more for protecting my mother.”); id. at 59

– 60 (“[Bell:] And that [Annuity] was not for wage replacement. It was f or other purposes? [Son:] Yeah. [Bell:] That’s correct, isn’t it? . . . [Son:] Yes. . . . [Bell:] And he has not withdrawn any funds from that to this point? [Son:] No, he has not.” )

. McFarland is sunk

— not rescue d

— by the

use[d] the IRA in his retirement years ” and di d not allow funds to “ improperly remain[] in the account. ” Id. at 331

– 32, 125 S.Ct. at 1569 (emphases added). Thus, the Court noted, the Rousey debtors (unlike McFarland) “ must begin to withdraw funds when they are likely to be retired and lack wage inco me.” Id. at 331, 125 S.Ct. at 1569 (emphasis added).

Case: 14-14514 Date Filed: 06/22/2015 Page: 11 of 2512 full testimony in this case. At minimum, g i ven the above, w e could not possibly find that the district court’s factual findings were clearly erroneous here. Finally, McFarland argues that even if his A nnuity does not qualify as an

“ annuity ” under the statute, it should at least qu alify as a “similar plan or contract.” McFarland did not raise this argument in the bankruptcy court, so we need not consider it here. See Irving v. Mazda Motor Corp. , 136 F.3d 764, 769 (11th Cir. 1998). 5 Regardless , “the common factor amo ng exempt plans is that they provide a substitute for wages .” Silliman , 738 S.E.2d at 611 (emphasis added) ; see also Rousey , 544 U.S. at 329 , 125 S.Ct. at 1568 (“ We agree with the Rouseys that IRAs
are simil ar to the plans specified in [ 11 U.S.C. § 522(d)(10)(E)] . Those plans, like the Rouseys’ IRAs, provide a substitute for wages . . . and are not mere savings

accounts .” (emphasis added) ). Thus, McFarland would likely fare no better relying on the “similar plan or contract” language.
IV. LIFE INSURANCE EXEMPTION
A . Statutory analysis Georgia Code § 44

- 13

- 100(a)(9) explicitly limits

— at $2,000

— a bankruptcy debtor’s ability to exempt the “cash value” of his “unmatured life insurance
contract

. ” Nevertheless, McFarland contends he should be permitted to rely on

5 We also need not decide w hether McFarland’ s Annuity was “reasonably necessary” for support for him and his wife . It seems un likely, howe ver, that the Annuity would qualify under this prong

. See , e.g. , Aplt’ s App., Exhibit 7, at 60

– 63 (testimony from McFarland’ s son that McFarland is apparently able to meet his financial obligations without help from the Annuity, and that his wife has a separate, similarly sized and structured annuity in her own na me).

Case: 14-14514 Date Filed: 06/22/2015 Page: 12 of 2513 Georgia Code § 33

- 25

- 11 (c)

— a non - bankruptcy provision

— to exempt the entire cash valu e of his whole life insurance policy. ( This would allow him to exempt an additional $11,000 or so from t he bankruptcy estate. ) The bankruptcy court disagreed and capped M cFarland’s life insurance exemption at $2,000

. Thus, we must decide whether McFarland w as stuck with § 44

- 13

- 100(a)(9 ) or whether he
could use a provision p rotecting debtors more generally. In our view, he w as restricted to $2,000 under Georgia’s explicit bankruptcy provision

. According to McFarland, federal law allows him to exempt property beyond that which is covered by explicit Georgia bankruptcy statutes. See 11 U.S.C. § § 522(b)(3)(B ) & 541(c)(2) ( allowing bankruptcy debtor s to exempt property that is protected “under applicable non

- bankruptcy law” ) ; see also Meehan v. Wallace ( In re Meehan ) , 102 F.3d 1209 (11th Cir. 199 7) (allowing bankruptcy debtor to rely on non - bank r uptcy Georgia statute to exclude IRA from bankruptcy estate )

. McFarland also contends nothing in the text or immediate context of Georgia Code § 33

- 25

- 11 (c) indicates it cannot be utilized by a bankruptcy debtor. Even assuming McFarland is corre ct on these two points, it is w ell

- settled that “[f] or purposes of statutory interpretation, a specific statute will prevail over a general statute, absent any indica tion of a contrary legislative intent .” Vines v.
State , 499 S.E.2d 630 , 632 ( Ga. 1998) . So , regardless of the lack of limiting language in § 33

- 25

- 11, M cFa rland can only use § 44

- 13

- 100(a)(9) because that
statute specifically restricts bankruptcy debtor s to a cash value life insurance

Case: 14-14514 Date Filed: 06/22/2015 Page: 13 of 2514 exemption of $2,000

. Put differently, although Georgia allows debtors , in general, to utilize § 33

- 25

- 11 (c) , Georgia restricts bankruptcy de btors to $2,000 with § 44

- 13

- 100(a)(9)

. The specific trumps the general , plain and simple

. 6 To be sure, one could argue

— although McFarland does not do so

— that by enacting § 33

- 25

- 11 in 2006 Georgia intended to am end, cla rify, or repeal § 44

- 13

- 100(a)(9) , which had been on the books since 1980

. T his argument , though, would requir e textual evidence of the Georgia L egislature ’s intent

. See Vines , 499 S.E.2d
at 632

. A nd a gain, McFarland does n ot attempt to prove such intent

. 7 Instead, McFarland asserts that §§ 33

- 25

- 11 (c) and 44

- 13

- 100 do not entirely overlap

. M ost significantly , he points out, § 33

- 25

- 11 (c) applies to Georgia residents and citizens , whereas § 44

- 13

- 100(a)(9) applies regardless of residency or citizenship

. 8
Therefore , McFarland claims, i t is perfe ctly plausible th at Georgia in tend ed for the
two statutes to coexist in a manner different than what we have described above:

6 Eleven U.S.C. §§ 522(b)(3)(B) and 54 1(c)(2) do not help McFarland be caus e Georgia has made Ga. Code Ann. § 33

- 25

- 11 (c) inapplicable to him through § 44

- 13

- 100(a)(9)

.
7 Several b ankruptcy courts have concluded that Georgia did not intend to repeal or amend § 44

- 13

- 100(a)(9)

. See In re Dean , 470 B.R. 643, 648 (Bankr. M .D. Ga. 2012) (“[N] othing in the history or language of § 33

– 25

– 11(c) indicates the legislature intended it to apply in bankruptcy .”); Roach v. Ryan ( In re Ryan ), No. 11

- 40712, 2012 WL 423854, at *2 (Bankr. S.D. Ga. Jan. 19, 2012) (similar ); In re Allen , No. 10

- 50827, 2010 WL 3958171, at *4 (Bankr. M.D. Ga. Oct. 4, 2010 ) (similar)

. We need not reach this issue.

8 He gives other examples , as well . For instance, § 33

- 25

- 11 (c) applies to the “cash surrender value [] ” of the life insurance policy, whereas § 44

- 13

- 100(a)(9) applies to the “loan or cash value.” Moreover, § 33

- 25

- 11 (c) does not apply to dependents, whereas § 44

- 13

- 10 0(a)(9) does

.

Case: 14-14514 Date Filed: 06/22/2015 Page: 14 of 2515 [T]he two statutory provisions are not identical, do not apply to identical classes of individuals, and apply to different interests in life insurance policies. These distinctions are not merely semantic, and provide a rational basis for Georgia to enact two different provisions, either or both of which may, or may not, be available to a ba nkruptcy debtor if the debtor and the asset qualify under each statute. Aplt’ s Br., at 8

– 9. Applying this argum ent to his situation , McFarland contends Georgia intended for bankruptcy debtors who are residents to have access to § 33

- 25

- 11 (c) ’s broad policy and for non - resident bankruptc y debtors to be limited to $2,000 by § 44

- 13

- 100(a)(9 )

. At minimum, McFarland protests , we must adopt this view because of our d uty to construe exemptions liberally

. In liberally construing exemption statutes, though, we cannot ig nore a statute’s plain language. See Carter v. Progressive Mountain Ins. , 761 S.E.2d 261,
264 ( Ga. 2014) ( “When we cons ider the meaning of a statute, we look first to the
text of the statute , and if the text is clear and unambiguous, we look no further, attributing to the statute its plain meaning.” (citation and internal marks omitted)). Again, § 44

- 13

- 100(a)(9 ) says a bankruptcy debtor’s life insurance exemption is

“ not to exceed $2,000.00 .” Put simply , “not to exceed” means not to exceed

. Georgia has explicitly declared that bankruptcy debtors in this situation

— residents
or not

— may exempt $2,000 at most , and no more. Fo r a bankruptcy debtor seeking this life insurance exemption in Georgia , the explicit language in § 44

- 13

- 100(a)(9) governs over the more general debtor language in § 33

- 25

- 11 (c)

.

Case: 14-14514 Date Filed: 06/22/2015 Page: 15 of 2516 This helps distinguish In re Meehan and other similar cases relied upon by McFarland

. In Meehan , in particular, we held pursuant to 11 U.S.C. § 541(c)(2) that a bankruptcy debtor could exclude his IRA from the bankruptcy estate by using a n “applicable” non - bankrupt cy Georgia statute

. In re Meehan , 102 F.3d at 1210

– 12. Meehan , however, made no mention of any Georgia statute specifically barring bankruptcy debtors from doing what the non

- bankruptcy statute a llowed debtors to do, more generally

. Id. ; s ee also Matter of Geise , 992 F.2d 651, 657 (7th Cir. 1993) (“[A] brief glance at a collection of the sta te exemption statutes confirms, even in those states that have enacted specific statutory listings of exempt property, other statutory sections also have been considered exemptions. ”). McFarland, on the other hand , is restricted to § 44

- 13

- 100(a)(9) because (at risk of sounding like a broken record) that statute specifically limits what b ankruptcy
debtors can exempt. McFarland tries other arguments, none of which fare better

. For instance , he
asserts Georgia Code § 44

- 13

- 100 “lacks any language prohibiting the Debtor from utilizing any state law exemptions outside of § 44

- 13

- 100 .” Indeed, he points out, § 44

- 13

- 100 (a) states a bankruptcy debtor “may” utilize its exemptions

— not “must.” But this ( once again) misses the point

. E ven if Georgia, broadly speaking, does not prohibit a bankruptcy debtor from going outside Georgia’s bankruptcy exemptions, the specific statute at issue here

— § 44

- 13

- 100 (a)(9)

— explicitly limits bankruptcy debtors in this particular life insurance situa tion to its provisions. True,

Case: 14-14514 Date Filed: 06/22/2015 Page: 16 of 2517 a bankruptcy debtor in Georgia “may” decide not to utilize § 44

- 13

- 100 (a)(9)

— no one, after all, is going to force a bankruptcy debtor to exempt anything. If a bankruptcy debtor decides to exempt the cash value of a life insu rance policy, though, we believe Georgia intended for that exemption “ not to exceed $2,000.00.”
B . Constitutional analysis
W e now address McFarland’s alternative view that restricting ba nkruptcy debtors to § 44

- 13

- 100(a)(9) violates: (1) the Georgia Constitution’s Equal Protection Clause ; 9 and (2) the United States Constitution’s Bankruptcy Clause. 10
1 . Section § 44
- 13
- 100(a)(9) does not violate equal protection In Georgia , “Protection to person and property is the paramount duty of government and shall be impartial and complete. No person shall be denied the equal protection of the laws.” Ga. Const. Art. I, § 1 , para. 2

. Where “ no fundamental righ t or suspect class is involved , . . . statutory classifications are permitted when the classification is based on rational distinctions and bears a direct relationship to the purpose of the legislation .” Grissom v. Gleason , 418 S.E.2d 27, 30 ( Ga. 1992) (emphasis added); see also Wood v. Unite d States ( In re

9 McFarland does not challenge Georgia’s statutory scheme under the Equal Protection Clause found in the United States Consti tution

. 10 McFarland also mentions a Supremacy Clause violation . His brief, however, fails to develop a preemption argument to any meaningful extent. Thus, we will not consider it here. See United States v. Woods , 684 F.3d 1045, 1064 n.23 (11th Cir. 2012) (“[A] n issue [ is ] abandoned when a defendant merely makes a passing reference to an alleged error in his brief .” (citing United States v. Jernigan , 341 F.3d 1273, 1283 n.8 (11th Cir. 2003))).

Case: 14-14514 Date Filed: 06/22/2015 Page: 17 of 2518 Wood ), 866 F.2d 1367, 1370 (11th Cir. 1989) (“Under the ‘rational relationship’ test, a court reviewing the constitutionality of a classification only may strike down the classification if the classification is without any reasonable justification.” (emphasis in original ) )

. Ordinarily, we assume that “Legisl atures . . . have acted constitutionally.” Melton v. Gunter , 773 F.2d 1548, 1551 (11th Cir. 1985) (quoting Clements v. Fashing , 457 U.S. 957, 963 , 102 S.Ct. 2836, 2843 (1982) )

. Although Georgia treats bankruptcy debto rs di fferent ly than other debtors , this distinction do es not viola te Georgia’s Equal Protection Clause because it is rational and relates directly to the purpose of bankruptcy legislation

. After all, o ne of the primary functions of bankruptcy is to “give the d ebtor a fresh start,” Menchise v. Akerman Senterfitt , 532 F.3d 1146, 1151 (11th Cir. 2008), and doing so quite obv iously requires a different legal scheme than that which applies to non bankruptcy debtor s . See In re Shumaker , 124 B.R. 820, 827 (Bankr. D. Mont. 1991) (“[T] he Ohio Legislature treated bankrupt and non

- bankrupt debtors differently. The [permissible] rationale for the distinction is to provide the former with the requisite ‘fresh start’. Being fully aware of the unique problems

c onfronting the bankrupt debtors’ quest for financial rehabilitation, the Legislature employed reasonable classification of p ersons to accomplish this end. ” (quoting Matter of Bloom , 5 B.R. 451, 453 (Bankr. N.D. Ohio 1980))). Thus, broadly speaking, state statutes do not violate equal protection when they deal with bankruptcy debtors differently than non

- bankruptcy debtors

.

Case: 14-14514 Date Filed: 06/22/2015 Page: 18 of 2519 I n our present scenario , however, Georgia has imposed a greater burden on bankruptcy debtors than non

- bankruptcy debtors by restricting them to $2,000

. This twis t makes our case somewhat un ique in the annals of case law , but it does not mean Georgia acted irrationally. This is because giving debtors a “fresh
start”

— while important

— is not the sole purpose of bankruptcy law. Rather, bankruptcy law is also designed “ to collect all of the asse ts and liabilities of an entity [and] to pay the creditors of the b ankrupt to t h e fullest extent possible .” Menchise , 532 F.3d at 1151. In other words, state s must balance the interests of both debtors and creditors when creating bankruptcy exemptions . This is no easy task

. And because bankruptcy allows debtors to wipe their financial slate entirely clean, it is plausibl e that Georgia require s bankruptcy debtors to sacrifice more of their penumbral property ( e.g. , a life insurance policy) in order to obtain greater
relief on property more central to a “fresh start ” ( e.g. , a homestead exemption )

. Compare Ga. Code Ann. § 44

- 13

- 1 (D ebtor, married or not, allowed residential exemption of $21,500 ), with Ga. Code Ann. § 44

- 13

- 100(a)(1) ( Married bankruptcy debtor allowed residential exemption of $43,000). 11 Cf. Taylor v. Age Fed. Credit Union ( In re Taylor ) , 3 F.3d 1512, 1516 (11th Cir. 1993 ) (“ Allowing a

11 This contrast was even starker when McFarland filed for bankruptcy in 2011. Prior to 2012, Geo rgia allowed a regular debtor a $5,000 residential exemption , whereas a bankrup tcy debtor could exempt $10,000 and a married bankr uptcy debtor could exempt $20,000.

Case: 14-14514 Date Filed: 06/22/2015 Page: 19 of 2520 [bankruptcy] debtor to retain property without reaffirming or re deeming gives the debtor not a ‘fresh start’ b ut a ‘head start ’

. . . . ” ).
T o hold otherwise , on the scant evidence presented here, would essentially

mean banning opt

- out states from treating bankruptcy debtors worse than regular debtors on any specific issue. This, ironically, would be irrational on our par t, as it would unduly interfere with a state’s prerogative to create its own bankruptcy exemptions

. In the end , b eca use Georgia has at least rationally balanced the needs of creditors and bankruptcy debtors, it has not transgressed equal protection by treating bankruptcy debtors differently from non

- bankruptcy debtors

. 2 . Section 44
- 13
- 100(a)(9) does not violate the Bankruptcy Clause
T he United States Constitution vests Congress with the power to establish

“ uniform Laws on the subject of Bankruptcies throughout the United States.” U.S. Const. Art. I, § 8 , cl. 4 . T his Bankruptcy C lause is “ the supreme Law of the Land . . . any Thing in t he Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const. Art. V I , cl. 2

. McFarland argues that restricting bankruptcy debtors to § 44

- 13

- 100(a)(9)
creates a non - uniform application of bankruptcy law in violation of the Constitution

. So, whereas for equal protection McFarland argued Georgia’ s scheme was irrational , here he contends Georgia’ s scheme was not authorized

— under the Bankruptcy Clause or , by extension, 11 U.S.C. § 522.

Case: 14-14514 Date Filed: 06/22/2015 Page: 20 of 2521 This issue is one of first impression in this circuit . And it intrigues us , in no small part because the other circuits addressing the subject appear to have done so
i n the inverse context, where a t rustee was claiming that a state could not constitutionally distinguish between a bankruptcy debtor and a non

- bankruptcy debtor. See, e.g. , Richardson v. Schafer ( In re Schafer ), 689 F.3d 601 (6th Cir. 2012); Sheehan , 574 F.3d 248; Kulp v. Zeman ( In re Kulp ) , 949 F.2d 1106, 1109

n. 3 (10th Cir. 1991); see also Sticka v. Applebaum ( In re Applebaum ), 422 B.R.
684 (9th Ci r. BAP 2009)

. T hough the pos ture is reversed here, we nevertheless reach the same result as our sister circuits. W e believe states are authorized by statute and permitted by the Constitution to distinguish between bankruptcy and

non - bankruptcy debtors in crafting bankruptcy exemptions

. First , with 11 U.S.C. § 522 Congress has permitted states to create, define , and implement bankruptcy exemptions and to restrict bankruptcy debtors to those exemptions. Section 522(b)(3)(A) , for instance, says bankruptcy debtors in opt

- out
states are restricted to “any property that is exempt . . . under State or local law that is applicable

. ” (emphasis added). Absent specific federal guidance to the contrary , states are obviously the sole authorities in determining whether state law is

“ applicable ” to a class of debtors

. See Butner v. United States , 440 U.S. 48, 55 , 99 S.Ct. 914, 918 (1979) (“ Property interests are created and defined by state law. Unless some federal interest requires a different result, there is no reason why such interests should be analyzed differently simply because an interested party is

Case: 14-14514 Date Filed: 06/22/2015 Page: 21 of 2522 involved in a bankruptcy proceedin g.”). A nd § 522 contains no explicit restriction s indicating states must treat all debtors alike

. The Fourth Circuit has
summarized this well, holding that § 522 affords the states the authority to restrict their respective residents to exemptions promulgated by the state legislatures, if they so choose. This statutory provision is an express delegation to the states of the power to create state exemptions in lieu of the federal bankruptcy exemption scheme. Congress has not seen fit to restrict the authority delegated to the states by requiring that state exemptions apply equally to bankruptcy and non

- bankruptcy cases

. . . . Sheehan , 574 F.3d at 252 (emphasis added) (internal citation omitted) ; see also In

re Schafer , 689 F.3d at 607 ( “The plain language of § 522(b) demonstrates [ Sheehan ’s above proposition] unambiguously

. . . . ” (emphasis added) ) ; In re Kulp , 949 F.2d at 1109 n. 3 (“[Eleven] U.S.C. § 522 expressly delegates to states the power to create bankruptcy exemptions. ”)

. And this statutory scheme is constitutionally valid

. Like our sister circuits,

w e do not believe the Constitution’ s call for bankruptcy uni formity somehow requires states to treat bankruptcy and non

- bankruptcy debtors exactly alike. See
In re Schafer , 689 F.3d at 607 (“[A] n interpretation of § 522 that permits states to enact bankruptcy

- specific exemptions schemes does not run afoul of either the Bankruptcy or Supr e macy Clauses . . . .”) ; Sheehan , 574 F.3d at 252 (“[W] e are without authority to impose such a [uniformity] requirement. ” ); In re Kulp , 949
F.2 d at 1109 n.3 (“Defendants argue in the alternative that Colo. Rev. Stat. § 13

– 54

– 104 violates the constitut ion’ s uniformity requirement for bankruptcy laws

Case: 14-14514 Date Filed: 06/22/2015 Page: 22 of 2523 because it creates a bankruptcy exemption which is not avail able to other Colorado debtors. This argument is me ritless.” (internal citations omitted) ). 12 S ee also In re Applebaum , 422 B.R. at 686 (“California’ s bankruptcy

- only exemption statute . . . does not violate the Uniformity Clause .”)

. B inding precedent counsels in this direction, as well

. The most striking language is contained in In re Wood , 866 F.2d 1367

. There , quoting the Supreme Court, we emphasized that the Bankruptcy Clause “is not a straightjacket that forbids Congress to distinguish among cl asses of debtors.” Id. at 1372 (quoting Ry. Labor Exec s . ’ Ass’n v. Gibbons , 4 55 U.S. 457, 469 , 102 S.Ct. 1169, 1176 (1982)). Instead, we wrote, the Clause “ only requires that bankruptcy laws apply uniformly among classes of debtors. ” Id

. T he Supreme Court has charted a similar path to ours. Gibbons , after all, was the first (ever!) opinion enforcing bankruptcy uniformity against Congress , yet the Supreme Court still deployed the “not a straightjacket” language we quoted in Wood

. See Gibbons , 455 U.S. at 469 , 102 S.Ct. at 1176

. Nearly a decade later, the Court added that the “Bankruptcy Code allows the States to define w hat property a debtor may exempt from the bankruptcy estate . . . . Nothing in [ 11 U.S.C. § 522(b)] (or elsewh ere in the Code) limits a State’ s power to restrict the scope of its exemptions; indeed, it could

12 T he Tenth Circuit recently reaffirmed the viability of In re Kulp in a thorough (albeit unpublished) decision. See Williamson v. Murray ( In re Murray ) , 586 F . App ’x 477, 481 (10th Cir. 2014) (observing that there is now a “consensus that bankruptcy

- specific exemptions are constitutional”).

Case: 14-14514 Date Filed: 06/22/2015 Page: 23 of 2524 theoretically accord no exemptions at all

. ” Owen v. Owen , 500 U.S. 305, 306,
308 , 111 S.Ct. 1833, 1834

– 35 (1991) (emphase s added)

. T his language str ongly suggests and supports the decision we reach today. 13
McFarland fails to interact with this case law or the compelling arguments contained therein. Instead, he cites (without much explanation) a smattering of bankruptcy cour t decisions, along with several olde r appellate d ecisions, that supposedly favor his position. See, e.g. , In re Regev ig , 389 B.R. 736 (Bankr. D. Ariz. 2008); In re Cross , 255 B. R. 25 (Bankr. N.D. Ind. 2000); Matter of Reyn olds , 24 B.R. 344 (Bankr. S.D. Ohio 1982); Kanter v. Moneymaker ( In re Kanter ) , 505 F.2d 228 (9th Cir. 1974); Hanover Nat’l Bank v. Moyses , 186 U.S. 181 , 22 S.Ct. 857 (1902). In recent years, none of our sister circuits have found these cases compelling

. S ee, e.g. , Williamson v. Murray ( In re Murray ) , 586 F . App ’ x . 477, 481 (10th Cir. 2014) (unpublished) (“Rather than directing us to intervening countervailing a uthority , Williamson’s briefing offers this court a dog’s breakfast of inapposite cases [and] overruled district court cases . . . .”)

. N either do we. The

13 True , the Owen Court indicate d that a state’s exemption power under “the opt

- out policy [is not] absolute.” 500 U.S. at 313 , 111 S.Ct. at 1838 . The Court , however, said this power could be limited by “whatever other competing or limiting policies the statute [ i.e. , § 522] contains.” Id. (emphasis added). In o ther words, the state’s power will be limited if § 522 can be show n to require this outcome in a specific area

. Here, no such demonstration has been made

.

Case: 14-14514 Date Filed: 06/22/2015 Page: 24 of 2525 clear weight of authority supports our position, an d McFarland has not persuaded us otherwise

. 14
In summar y, Georgia has not violated the Bankruptcy Clause

. A plain reading of § 522 does not , as McFarland alleges, allow a bankruptcy d ebtor to use

a state exemption statute where the state itself has rendered the statute inapp licable

. Rather, very near the opposite is true; states have been authorized to define and restrict the applicability of their bankruptcy exemptions. And this authorization does not “fail to provide a uniform application of the Bankruptcy Code in violation of t he Bankruptcy Clause,” as McFarland asserts. A lthough the authorization is
not absolute, its bound aries have not been overstepped here

. IV. CONCLUSION For the foregoing reasons, McFarland is not entitled to the bankruptcy exemptions he claims on appeal. T he bankruptcy court did not clearly error with its factual findings, and we agr ee with its legal conclusions. AFFIRMED.

14 The Supreme Court’s decision in Moyses is perhaps the most int riguing case cited by McFarland. The Sixth Circuit has explained in copious detail, however, why Moyses does not compel the result desired by McFarland here. See In re Schafer , 689 F.3d at 610

– 11. In short, although Moyses contains one sentence arguably favorable to McFarland, the decision itself was addressing a different iss ue than the one facing us here , and the Supreme Court actually upheld t he constitutionality of the 1898 Bankruptcy Act. Id. at 610. Moreover, the Sixth Circuit noted, the language in question wou ld prove too much if interpreted as broadly as McFarland urges. See id. (“[F] ull adherence to the language in Moyses on which the Trustee relies would call into doubt the constitutionalit y of the federal exemptions set forth in § 522(d) .” (emphasis added) ).

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