Opinion ID: 4552253
Heading Depth: 2
Heading Rank: 1

Heading: The Bankruptcy Code Framework

Text: When a debtor files for bankruptcy, his interests in property are either compiled into the bankruptcy estate from which (to the extent the estate can afford) his creditors will be paid, or those interests are exempted from the estate for the debtor to keep. See 11 U.S.C. § 541. When the estate is created, a combination of federal and state law determines which of the debtor's assets are exempted (and will remain safe from creditor collection) and which belong to the estate (and will be lost to the debtor). See id. § 522(b); Owen v. Owen, 500 U.S. 305, 306 (1991). [F]ederal law provides no authority for bankruptcy courts - 6 - to deny an exemption on a ground not specified in the Code. Law v. Siegel, 571 U.S. 415, 425 (2014) (emphasis omitted). Pursuant to 11 U.S.C. § 522(b)(3)(A), a debtor can exempt from the bankruptcy estate any property permitted by his state of residence. Among those exemptions is an exemption commonly called a homestead exemption which protects, to varying extents, a debtor's interest in their home. See Homestead Law, Black's Law Dictionary (11th ed. 2019). Maine, Rockwell's state of residence, permits debtors to protect their aggregate interest, not to exceed $47,500 in value, in real or personal property that the debtor . . . uses as a residence. 14 M.R.S. § 4422(1)(A). Exemptions are determined at the time the debtor files for bankruptcy. White v. Stump, 266 U.S. 310, 313 (1924); Myers v. Matley, 318 U.S. 622, 628 (1943) ([T]he bankrupt's right to a homestead exemption becomes fixed at the date of the filing of the petition in bankruptcy . . . .); In re Cunningham, 513 F.3d 318, 318 (1st Cir. 2008). This maxim is called the snapshot rule because the debtor's financial situation is frozen in time, as if someone had taken a snapshot of it.3 In re Awayda, 574 B.R. 692, 3Though we have rarely used the term snapshot in this circuit, see In re Rudler, 576 F.3d 37, 50 (1st Cir. 2009), we have regularly recognized the concept. See, e.g., In re Cunningham, 513 F.3d 318, 324 (1st Cir. 2008) ([I]t is a basic - 7 - 697 (Bankr. C.D. Ill. 2017) (noting the snapshot rule [] controls the moment in time upon which a debtor's right to claim exemptions is based). When the snapshot rule applies to an asset and the snapshot is complete, the asset will retain whatever status (i.e., exempt or part of the estate) it had when the debtor filed for bankruptcy and cannot be altered by circumstances that change later. See In re Williams, 515 B.R. 395, 401 (Bankr. D. Mass. 2014) (explaining that the snapsnot rule focus[es] on the facts and law as they exist on the petition date); see also In re Cunningham, 513 F.3d at 318. Other times, the snapshot is incomplete, meaning that the right circumstances could later alter the status of that asset relative to the bankruptcy estate, much like one can edit a snapshot after it has been taken. See, e.g., 11 U.S.C. § 541(a)(5) (requiring that up to 180 days after filing of the bankruptcy petition, property that the debtor acquires by bequest, devise, inheritance, divorce, life insurance, or death benefit becomes part of the estate).