Opinion ID: 4201280
Heading Depth: 3
Heading Rank: 1

Heading: Chapter 7: In re Zibman

Text: In Zibman, the debtors sold their Texas homestead roughly two months before filing for Chapter 7 bankruptcy; they did not reinvest the sale proceeds in another homestead within six months of the sale. 268 F.3d at 300–01. We observed that under Myers and White, “the law and facts existing on the date of filing the bankruptcy petition determine the existence of available exemptions, but . . . it is the entire state law applicable on the filing date that is determinative.” Id. at 304. Although the debtors filed the bankruptcy petition before the six-month exemption period had ended, “‘freezing’ the exemption for the proceeds simply because it was in effect at the date the petition was filed, [would] effectively read the 6–month limitation out of the 7 Case: 16-20641 Document: 00514143347 Page: 8 Date Filed: 09/05/2017 No. 16-20641 statute, and transform[] an explicitly limited exemption into a permanent one.” Id. Furthermore, the intent of “the proceeds exemption statute was solely to allow the claimant to invest the proceeds in another homestead, not to protect the proceeds, in and of themselves.” Id. at 305 (quoting In re England, 975 F.2d 1168, 1174–75 (5th Cir. 1992)). Accordingly, we held that when the debtors “failed to reinvest the proceeds in another Texas homestead within the statutory time period, those proceeds lost their exemption, freeing the Trustee to reach the proceeds as part of the bankruptcy estate.” Id. (footnote omitted).