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BAP Takes Property Tax Exemption Case Under Advisement

| Dec 16, 2016 | Firm News

The 8th Circuit Bankruptcy Appellate Panel (BAP) heard oral arguments in the case of In re Sheri Hanson last week. I represent debtor Sheri Hanson, who is trying to claim an exemption to protect a $1,500 property tax refund, which the State of Minnesota accords to low income homeowners based upon a sliding fee scale. The issue is whether such a tax refund is to be considered “government assistance based on need” and therefore exempt from her creditors.

There is unfavorable precedent at the BAP on this particular issue. The Grace Johnson case in 2014 relied upon the BAP’s Hardy case which had been decided a couple of months earlier, and dealt with a similar exemption. Hardy was appealed to the Eighth Circuit and overruled, but Grace Johnson was not appealed.

It’s hard for me to get a read on what direction the judges are heading on this based on their questions and comments, but I can simply say I am confident that they are going to take a fresh look at these issues. They seemed rather focused on the fact of a favorable ruling to my client, insofar as it would affect other people outside of bankruptcy would utilize their ruling to exempt themselves from wage garnishment, which to me shouldn’t be their concern.

If we lose, we will take this to the Eighth Circuit. In fact, I had tried to bypass the BAP to go straight to the Eighth Circuit, but that request was denied.