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Bankruptcy Code

11 U.S.C. 501, et seq.

11 U.S.C. CHAPTER 5 - CREDITORS, THE DEBTOR, AND THE ESTATE

SUBCHAPTER I - CREDITORS AND CLAIMS

Sec.

501. Filing of proofs of claims or interests.

502. Allowance of claims or interests.

503. Allowance of administrative expenses.

504. Sharing of compensation.

505. Determination of tax liability.

506. Determination of secured status.

507. Priorities.

508. Effect of distribution other than under this title.

509. Claims of codebtors.

510. Subordination.

SUBCHAPTER II - DEBTOR'S DUTIES AND BENEFITS

521. Debtor's duties.

522. Exemptions.

523. Exceptions to discharge.

524. Effect of discharge.

525. Protection against discriminatory treatment.

SUBCHAPTER III - THE ESTATE

541. Property of the estate.

542. Turnover of property to the estate.

543. Turnover of property by a custodian.

544. Trustee as lien creditor and as successor to certain creditors

and purchasers.

545. Statutory liens.

546. Limitations on avoiding powers.

547. Preferences.

548. Fraudulent transfers and obligations.

549. Postpetition transactions.

550. Liability of transferee of avoided transfer.

551. Automatic preservation of avoided transfer.

552. Postpetition effect of security interest.

553. Setoff.

554. Abandonment of property of the estate.

555. Contractual right to liquidate a securities contract.

556. Contractual right to liquidate a commodity contract or forward

contract. (FOOTNOTE 1) So in original. Does not conform to section

catchline.

557. Expedited determination of interests in, and abandonment or

other disposition of grain assets.

558. Defenses of the estate.

559. Contractual right to liquidate a repurchase agreement.

560. Contractual right to terminate a swap agreement.

SUBCHAPTER I - CREDITORS AND CLAIMS

Sec. 501. Filing of proofs of claims or interests

(a) A creditor or an indenture trustee may file a proof of

claim. An equity security holder may file a proof of interest.

(b) If a creditor does not timely file a proof of such creditor's

claim, an entity that is liable to such creditor with the debtor,

or that has secured such creditor, may file a proof of such claim.

claim, the debtor or the trustee may file a proof of such claim.

(d) A claim of a kind specified in section 502(e)(2), 502(f),

502(g), 502(h) or 502(i) of this title may be filed under

subsection (a), (b), or (c) of this section the same as if such

claim were a claim against the debtor and had arisen before the

date of the filing of the petition.

Sec. 502. Allowance of claims or interests

(a) A claim or interest, proof of which is filed under section

501 of this title, is deemed allowed, unless a party in interest,

including a creditor of a general partner in a partnership that is

a debtor in a case under chapter 7 of this title, objects.

(b) Except as provided in subsections (e)(2), (f), (g), (h) and

(i) of this section, if such objection to a claim is made, the

court, after notice and a hearing, shall determine the amount of

such claim in lawful currency of the United States as of the date

of the filing of the petition, and shall allow such claim in such

amount, except to the extent that -

(1) such claim is unenforceable against the debtor and property

of the debtor, under any agreement or applicable law for a reason

other than because such claim is contingent or unmatured;

(2) such claim is for unmatured interest;

(3) if such claim is for a tax assessed against property of the

estate, such claim exceeds the value of the interest of the

estate in such property;

(4) if such claim is for services of an insider or attorney of

the debtor, such claim exceeds the reasonable value of such

services;

(5) such claim is for a debt that is unmatured on the date of

the filing of the petition and that is excepted from discharge

under section 523(a)(5) of this title;

(6) if such claim is the claim of a lessor for damages

resulting from the termination of a lease of real property, such

claim exceeds -

(A) the rent reserved by such lease, without acceleration,

for the greater of one year, or 15 percent, not to exceed three

years, of the remaining term of such lease, following the

earlier of -

(i) the date of the filing of the petition; and

(ii) the date on which such lessor repossessed, or the

lessee surrendered, the leased property; plus

(B) any unpaid rent due under such lease, without

acceleration, on the earlier of such dates;

(7) if such claim is the claim of an employee for damages

resulting from the termination of an employment contract, such

claim exceeds -

(A) the compensation provided by such contract, without

acceleration, for one year following the earlier of -

(i) the date of the filing of the petition; or

(ii) the date on which the employer directed the employee

to terminate, or such employee terminated, performance under

such contract; plus

(B) any unpaid compensation due under such contract, without

acceleration, on the earlier of such dates;

(8) such claim results from a reduction, due to late payment,

in the amount of an otherwise applicable credit available to the

debtor in connection with an employment tax on wages, salaries,

or commissions earned from the debtor; or

(9) proof of such claim is not timely filed, except to the

extent tardily filed as permitted under paragraph (1), (2), or

(3) of section 726(a) of this title or under the Federal Rules of

Bankruptcy Procedure, except that a claim of a governmental unit

shall be timely filed if it is filed before 180 days after the

date of the order for relief or such later time as the Federal

Rules of Bankruptcy Procedure may provide.

section -

(1) any contingent or unliquidated claim, the fixing or

liquidation of which, as the case may be, would unduly delay the

administration of the case; or

(2) any right to payment arising from a right to an equitable

remedy for breach of performance.

(d) Notwithstanding subsections (a) and (b) of this section, the

court shall disallow any claim of any entity from which property is

recoverable under section 542, 543, 550, or 553 of this title or

that is a transferee of a transfer avoidable under section 522(f),

522(h), 544, 545, 547, 548, 549, or 724(a) of this title, unless

such entity or transferee has paid the amount, or turned over any

such property, for which such entity or transferee is liable under

section 522(i), 542, 543, 550, or 553 of this title.

(e)(1) Notwithstanding subsections (a), (b), and (c) of this

section and paragraph (2) of this subsection, the court shall

disallow any claim for reimbursement or contribution of an entity

that is liable with the debtor on or has secured the claim of a

creditor, to the extent that -

(A) such creditor's claim against the estate is disallowed;

(B) such claim for reimbursement or contribution is contingent

as of the time of allowance or disallowance of such claim for

reimbursement or contribution; or

such creditor under section 509 of this title.

(2) A claim for reimbursement or contribution of such an entity

that becomes fixed after the commencement of the case shall be

determined, and shall be allowed under subsection (a), (b), or (c)

of this section, or disallowed under subsection (d) of this

section, the same as if such claim had become fixed before the date

of the filing of the petition.

(f) In an involuntary case, a claim arising in the ordinary

course of the debtor's business or financial affairs after the

commencement of the case but before the earlier of the appointment

of a trustee and the order for relief shall be determined as of the

date such claim arises, and shall be allowed under subsection (a),

(b), or (c) of this section or disallowed under subsection (d) or

(e) of this section, the same as if such claim had arisen before

the date of the filing of the petition.

(g) A claim arising from the rejection, under section 365 of this

title or under a plan under chapter 9, 11, 12, or 13 of this title,

of an executory contract or unexpired lease of the debtor that has

not been assumed shall be determined, and shall be allowed under

subsection (a), (b), or (c) of this section or disallowed under

subsection (d) or (e) of this section, the same as if such claim

had arisen before the date of the filing of the petition.

(h) A claim arising from the recovery of property under section

522, 550, or 553 of this title shall be determined, and shall be

allowed under subsection (a), (b), or (c) of this section, or

disallowed under subsection (d) or (e) of this section, the same as

if such claim had arisen before the date of the filing of the

petition.

(i) A claim that does not arise until after the commencement of

the case for a tax entitled to priority under section 507(a)(8) of

this title shall be determined, and shall be allowed under

subsection (a), (b), or (c) of this section, or disallowed under

subsection (d) or (e) of this section, the same as if such claim

had arisen before the date of the filing of the petition.

(j) A claim that has been allowed or disallowed may be

reconsidered for cause. A reconsidered claim may be allowed or

disallowed according to the equities of the case. Reconsideration

of a claim under this subsection does not affect the validity of

any payment or transfer from the estate made to a holder of an

allowed claim on account of such allowed claim that is not

reconsidered, but if a reconsidered claim is allowed and is of the

same class as such holder's claim, such holder may not receive any

additional payment or transfer from the estate on account of such

holder's allowed claim until the holder of such reconsidered and

allowed claim receives payment on account of such claim

proportionate in value to that already received by such other

holder. This subsection does not alter or modify the trustee's

right to recover from a creditor any excess payment or transfer

made to such creditor.

Sec. 503. Allowance of administrative expenses

(a) An entity may timely file a request for payment of an

administrative expense, or may tardily file such request if

permitted by the court for cause.

(b) After notice and a hearing, there shall be allowed

administrative expenses, other than claims allowed under section

502(f) of this title, including -

(1)(A) the actual, necessary costs and expenses of preserving

the estate, including wages, salaries, or commissions for

services rendered after the commencement of the case;

(B) any tax -

(i) incurred by the estate, except a tax of a kind specified

in section 507(a)(8) of this title; or

(ii) attributable to an excessive allowance of a tentative

carryback adjustment that the estate received, whether the

taxable year to which such adjustment relates ended before or

after the commencement of the case; and

of a kind specified in subparagraph (B) of this paragraph;

(2) compensation and reimbursement awarded under section 330(a)

of this title;

(3) the actual, necessary expenses, other than compensation and

reimbursement specified in paragraph (4) of this subsection,

incurred by -

(A) a creditor that files a petition under section 303 of

this title;

(B) a creditor that recovers, after the court's approval, for

the benefit of the estate any property transferred or concealed

by the debtor;

criminal offense relating to the case or to the business or

property of the debtor;

(D) a creditor, an indenture trustee, an equity security

holder, or a committee representing creditors or equity

security holders other than a committee appointed under section

1102 of this title, in making a substantial contribution in a

case under chapter 9 or 11 of this title;

(E) a custodian superseded under section 543 of this title,

and compensation for the services of such custodian; or

(F) a member of a committee appointed under section 1102 of

this title, if such expenses are incurred in the performance of

the duties of such committee;

(4) reasonable compensation for professional services rendered

by an attorney or an accountant of an entity whose expense is

allowable under paragraph (3) of this subsection, based on the

time, the nature, the extent, and the value of such services, and

the cost of comparable services other than in a case under this

title, and reimbursement for actual, necessary expenses incurred

by such attorney or accountant;

(5) reasonable compensation for services rendered by an

indenture trustee in making a substantial contribution in a case

under chapter 9 or 11 of this title, based on the time, the

nature, the extent, and the value of such services, and the cost

of comparable services other than in a case under this title; and

(6) the fees and mileage payable under chapter 119 of title 28.

Sec. 504. Sharing of compensation

(a) Except as provided in subsection (b) of this section, a

person receiving compensation or reimbursement under section

503(b)(2) or 503(b)(4) of this title may not share or agree to

share -

(1) any such compensation or reimbursement with another person;

(2) any compensation or reimbursement received by another

person under such sections.

(b)(1) A member, partner, or regular associate in a professional

association, corporation, or partnership may share compensation or

reimbursement received under section 503(b)(2) or 503(b)(4) of this

title with another member, partner, or regular associate in such

association, corporation, or partnership, and may share in any

compensation or reimbursement received under such sections by

another member, partner, or regular associate in such association,

corporation, or partnership.

(2) An attorney for a creditor that files a petition under

section 303 of this title may share compensation and reimbursement

received under section 503(b)(4) of this title with any other

attorney contributing to the services rendered or expenses incurred

by such creditor's attorney.

Sec. 505. Determination of tax liability

(a)(1) Except as provided in paragraph (2) of this subsection,

the court may determine the amount or legality of any tax, any fine

or penalty relating to a tax, or any addition to tax, whether or

not previously assessed, whether or not paid, and whether or not

contested before and adjudicated by a judicial or administrative

tribunal of competent jurisdiction.

(2) The court may not so determine -

(A) the amount or legality of a tax, fine, penalty, or addition

to tax if such amount or legality was contested before and

adjudicated by a judicial or administrative tribunal of competent

jurisdiction before the commencement of the case under this

title; or

(B) any right of the estate to a tax refund, before the earlier

of -

(i) 120 days after the trustee properly requests such refund

from the governmental unit from which such refund is claimed;

(ii) a determination by such governmental unit of such

request.

(b) A trustee may request a determination of any unpaid liability

of the estate for any tax incurred during the administration of the

case by submitting a tax return for such tax and a request for such

a determination to the governmental unit charged with

responsibility for collection or determination of such tax. Unless

such return is fraudulent, or contains a material

misrepresentation, the trustee, the debtor, and any successor to

the debtor are discharged from any liability for such tax -

(1) upon payment of the tax shown on such return, if -

(A) such governmental unit does not notify the trustee,

within 60 days after such request, that such return has been

selected for examination; or

(B) such governmental unit does not complete such an

examination and notify the trustee of any tax due, within 180

days after such request or within such additional time as the

court, for cause, permits;

(2) upon payment of the tax determined by the court, after

notice and a hearing, after completion by such governmental unit

of such examination; or

(3) upon payment of the tax determined by such governmental

unit to be due.

determination by the court of a tax under this section, the

governmental unit charged with responsibility for collection of

such tax may assess such tax against the estate, the debtor, or a

successor to the debtor, as the case may be, subject to any

otherwise applicable law.

Sec. 506. Determination of secured status

(a) An allowed claim of a creditor secured by a lien on property

in which the estate has an interest, or that is subject to setoff

under section 553 of this title, is a secured claim to the extent

of the value of such creditor's interest in the estate's interest

in such property, or to the extent of the amount subject to setoff,

as the case may be, and is an unsecured claim to the extent that

the value of such creditor's interest or the amount so subject to

setoff is less than the amount of such allowed claim. Such value

shall be determined in light of the purpose of the valuation and of

the proposed disposition or use of such property, and in

conjunction with any hearing on such disposition or use or on a

plan affecting such creditor's interest.

(b) To the extent that an allowed secured claim is secured by

property the value of which, after any recovery under subsection

there shall be allowed to the holder of such claim, interest on

such claim, and any reasonable fees, costs, or charges provided for

under the agreement under which such claim arose.

secured claim the reasonable, necessary costs and expenses of

preserving, or disposing of, such property to the extent of any

benefit to the holder of such claim.

(d) To the extent that a lien secures a claim against the debtor

that is not an allowed secured claim, such lien is void, unless -

(1) such claim was disallowed only under section 502(b)(5) or

502(e) of this title; or

(2) such claim is not an allowed secured claim due only to the

failure of any entity to file a proof of such claim under section

501 of this title.

Sec. 507. Priorities

(a) The following expenses and claims have priority in the

following order:

(1) First, administrative expenses allowed under section 503(b)

of this title, and any fees and charges assessed against the

estate under chapter 123 of title 28.

(2) Second, unsecured claims allowed under section 502(f) of

this title.

(3) Third, allowed unsecured claims, but only to the extent of

$4,000 for each individual or corporation, as the case may be,

earned within 90 days before the date of the filing of the

petition or the date of the cessation of the debtor's business,

whichever occurs first, for -

(A) wages, salaries, or commissions, including vacation,

severance, and sick leave pay earned by an individual; or

(B) sales commissions earned by an individual or by a

corporation with only 1 employee, acting as an independent

contractor in the sale of goods or services for the debtor in

the ordinary course of the debtor's business if, and only if,

during the 12 months preceding that date, at least 75 percent

of the amount that the individual or corporation earned by

acting as an independent contractor in the sale of goods or

services was earned from the debtor; (FOOTNOTE 1)

(FOOTNOTE 1) So in original. The semicolon probably should be a

period.

(4) Fourth, allowed unsecured claims for contributions to an

employee benefit plan -

(A) arising from services rendered within 180 days before the

date of the filing of the petition or the date of the cessation

of the debtor's business, whichever occurs first; but only

(B) for each such plan, to the extent of -

(i) the number of employees covered by each such plan

multiplied by $4,000; less

(ii) the aggregate amount paid to such employees under

paragraph (3) of this subsection, plus the aggregate amount

paid by the estate on behalf of such employees to any other

employee benefit plan.

(5) Fifth, allowed unsecured claims of persons -

(A) engaged in the production or raising of grain, as defined

in section 557(b) of this title, against a debtor who owns or

operates a grain storage facility, as defined in section 557(b)

of this title, for grain or the proceeds of grain, or

(B) engaged as a United States fisherman against a debtor who

has acquired fish or fish produce from a fisherman through a

sale or conversion, and who is engaged in operating a fish

produce storage or processing facility -

but only to the extent of $4,000 for each such individual.

(6) Sixth, allowed unsecured claims of individuals, to the

extent of $1,800 for each such individual, arising from the

deposit, before the commencement of the case, of money in

connection with the purchase, lease, or rental of property, or

the purchase of services, for the personal, family, or household

use of such individuals, that were not delivered or provided.

(7) Seventh, allowed claims for debts to a spouse, former

spouse, or child of the debtor, for alimony to, maintenance for,

or support of such spouse or child, in connection with a

separation agreement, divorce decree or other order of a court of

record, determination made in accordance with State or

territorial law by a governmental unit, or property settlement

agreement, but not to the extent that such debt -

(A) is assigned to another entity, voluntarily, by operation

of law, or otherwise; or

(B) includes a liability designated as alimony, maintenance,

or support, unless such liability is actually in the nature of

alimony, maintenance or support.

(8) Eighth, allowed unsecured claims of governmental units,

only to the extent that such claims are for -

(A) a tax on or measured by income or gross receipts -

(i) for a taxable year ending on or before the date of the

filing of the petition for which a return, if required, is

last due, including extensions, after three years before the

date of the filing of the petition;

(ii) assessed within 240 days, plus any time plus 30 days

during which an offer in compromise with respect to such tax

that was made within 240 days after such assessment was

pending, before the date of the filing of the petition; or

(iii) other than a tax of a kind specified in section

523(a)(1)(B) or 523(a)(1)(C) of this title, not assessed

before, but assessable, under applicable law or by agreement,

after, the commencement of the case;

(B) a property tax assessed before the commencement of the

case and last payable without penalty after one year before the

date of the filing of the petition;

the debtor is liable in whatever capacity;

(D) an employment tax on a wage, salary, or commission of a

kind specified in paragraph (3) of this subsection earned from

the debtor before the date of the filing of the petition,

whether or not actually paid before such date, for which a

return is last due, under applicable law or under any

extension, after three years before the date of the filing of

the petition;

(E) an excise tax on -

(i) a transaction occurring before the date of the filing

of the petition for which a return, if required, is last due,

under applicable law or under any extension, after three

years before the date of the filing of the petition; or

(ii) if a return is not required, a transaction occurring

during the three years immediately preceding the date of the

filing of the petition;

(F) a customs duty arising out of the importation of

merchandise -

(i) entered for consumption within one year before the date

of the filing of the petition;

(ii) covered by an entry liquidated or reliquidated within

one year before the date of the filing of the petition; or

(iii) entered for consumption within four years before the

date of the filing of the petition but unliquidated on such

date, if the Secretary of the Treasury certifies that failure

to liquidate such entry was due to an investigation pending

on such date into assessment of antidumping or countervailing

duties or fraud, or if information needed for the proper

appraisement or classification of such merchandise was not

available to the appropriate customs officer before such

date; or

(G) a penalty related to a claim of a kind specified in this

paragraph and in compensation for actual pecuniary loss.

(9) Ninth, allowed unsecured claims based upon any commitment

by the debtor to a Federal depository institutions regulatory

agency (or predecessor to such agency) to maintain the capital of

an insured depository institution.

(b) If the trustee, under section 362, 363, or 364 of this title,

provides adequate protection of the interest of a holder of a claim

secured by a lien on property of the debtor and if, notwithstanding

such protection, such creditor has a claim allowable under

subsection (a)(1) of this section arising from the stay of action

against such property under section 362 of this title, from the

use, sale, or lease of such property under section 363 of this

title, or from the granting of a lien under section 364(d) of this

title, then such creditor's claim under such subsection shall have

priority over every other claim allowable under such subsection.

a governmental unit arising from an erroneous refund or credit of a

tax has the same priority as a claim for the tax to which such

refund or credit relates.

(d) An entity that is subrogated to the rights of a holder of a

claim of a kind specified in subsection (a)(3), (a)(4), (a)(5),

(a)(6), (a)(7), (a)(8), or (a)(9) of this section is not subrogated

to the right of the holder of such claim to priority under such

subsection.

Sec. 508. Effect of distribution other than under this title

(a) If a creditor receives, in a foreign proceeding, payment of,

or a transfer of property on account of, a claim that is allowed

under this title, such creditor may not receive any payment under

this title on account of such claim until each of the other holders

of claims on account of which such holders are entitled to share

equally with such creditor under this title has received payment

under this title equal in value to the consideration received by

such creditor in such foreign proceeding.

(b) If a creditor of a partnership debtor receives, from a

general partner that is not a debtor in a case under chapter 7 of

this title, payment of, or a transfer of property on account of, a

claim that is allowed under this title and that is not secured by a

lien on property of such partner, such creditor may not receive any

payment under this title on account of such claim until each of the

other holders of claims on account of which such holders are

entitled to share equally with such creditor under this title has

received payment under this title equal in value to the

consideration received by such creditor from such general partner.

Sec. 509. Claims of codebtors

(a) Except as provided in subsection (b) or (c) of this section,

an entity that is liable with the debtor on, or that has secured, a

claim of a creditor against the debtor, and that pays such claim,

is subrogated to the rights of such creditor to the extent of such

payment.

(b) Such entity is not subrogated to the rights of such creditor

to the extent that -

(1) a claim of such entity for reimbursement or contribution on

account of such payment of such creditor's claim is -

(A) allowed under section 502 of this title;

(B) disallowed other than under section 502(e) of this title;

(2) as between the debtor and such entity, such entity received

the consideration for the claim held by such creditor.

for the benefit of such creditor an allowed claim, by way of

subrogation under this section, or for reimbursement or

contribution, of an entity that is liable with the debtor on, or

that has secured, such creditor's claim, until such creditor's

claim is paid in full, either through payments under this title or

otherwise.

Sec. 510. Subordination

(a) A subordination agreement is enforceable in a case under this

title to the same extent that such agreement is enforceable under

applicable nonbankruptcy law.

(b) For the purpose of distribution under this title, a claim

arising from rescission of a purchase or sale of a security of the

debtor or of an affiliate of the debtor, for damages arising from

the purchase or sale of such a security, or for reimbursement or

contribution allowed under section 502 on account of such a claim,

shall be subordinated to all claims or interests that are senior to

or equal the claim or interest represented by such security, except

that if such security is common stock, such claim has the same

priority as common stock.

after notice and a hearing, the court may -

(1) under principles of equitable subordination, subordinate

for purposes of distribution all or part of an allowed claim to

all or part of another allowed claim or all or part of an allowed

interest to all or part of another allowed interest; or

(2) order that any lien securing such a subordinated claim be

transferred to the estate.

Sec. 521. Debtor's duties

The debtor shall -

(1) file a list of creditors, and unless the court orders

otherwise, a schedule of assets and liabilities, a schedule of

current income and current expenditures, and a statement of the

debtor's financial affairs;

(2) if an individual debtor's schedule of assets and

liabilities includes consumer debts which are secured by property

of the estate -

(A) within thirty days after the date of the filing of a

petition under chapter 7 of this title or on or before the date

of the meeting of creditors, whichever is earlier, or within

such additional time as the court, for cause, within such

period fixes, the debtor shall file with the clerk a statement

of his intention with respect to the retention or surrender of

such property and, if applicable, specifying that such property

is claimed as exempt, that the debtor intends to redeem such

property, or that the debtor intends to reaffirm debts secured

by such property;

(B) within forty-five days after the filing of a notice of

intent under this section, or within such additional time as

the court, for cause, within such forty-five day period fixes,

the debtor shall perform his intention with respect to such

property, as specified by subparagraph (A) of this paragraph;

and

shall alter the debtor's or the trustee's rights with regard to

such property under this title;

(3) if a trustee is serving in the case, cooperate with the

trustee as necessary to enable the trustee to perform the

trustee's duties under this title;

(4) if a trustee is serving in the case, surrender to the

trustee all property of the estate and any recorded information,

including books, documents, records, and papers, relating to

property of the estate, whether or not immunity is granted under

section 344 of this title, and

(5) appear at the hearing required under section 524(d) of this

title.

Sec. 522. Exemptions

(a) In this section -

(1) ''dependent'' includes spouse, whether or not actually

dependent; and

(2) ''value'' means fair market value as of the date of the

filing of the petition or, with respect to property that becomes

property of the estate after such date, as of the date such

property becomes property of the estate.

(b) Notwithstanding section 541 of this title, an individual

debtor may exempt from property of the estate the property listed

in either paragraph (1) or, in the alternative, paragraph (2) of

this subsection. In joint cases filed under section 302 of this

title and individual cases filed under section 301 or 303 of this

title by or against debtors who are husband and wife, and whose

estates are ordered to be jointly administered under Rule 1015(b)

of the Federal Rules of Bankruptcy Procedure, one debtor may not

elect to exempt property listed in paragraph (1) and the other

debtor elect to exempt property listed in paragraph (2) of this

subsection. If the parties cannot agree on the alternative to be

elected, they shall be deemed to elect paragraph (1), where such

election is permitted under the law of the jurisdiction where the

case is filed. Such property is -

(1) property that is specified under subsection (d) of this

section, unless the State law that is applicable to the debtor

under paragraph (2)(A) of this subsection specifically does not

so authorize; or, in the alternative,

(2)(A) any property that is exempt under Federal law, other

than subsection (d) of this section, or State or local law that

is applicable on the date of the filing of the petition at the

place in which the debtor's domicile has been located for the 180

days immediately preceding the date of the filing of the

petition, or for a longer portion of such 180-day period than in

any other place; and

(B) any interest in property in which the debtor had,

immediately before the commencement of the case, an interest as a

tenant by the entirety or joint tenant to the extent that such

interest as a tenant by the entirety or joint tenant is exempt

from process under applicable nonbankruptcy law.

section is not liable during or after the case for any debt of the

debtor that arose, or that is determined under section 502 of this

title as if such debt had arisen, before the commencement of the

case, except -

(1) a debt of a kind specified in section 523(a)(1) or

523(a)(5) of this title;

(2) a debt secured by a lien that is -

(A)(i) not avoided under subsection (f) or (g) of this

section or under section 544, 545, 547, 548, 549, or 724(a) of

this title; and

(ii) not void under section 506(d) of this title; or

(B) a tax lien, notice of which is properly filed;

(3) a debt of a kind specified in section 523(a)(4) or

523(a)(6) of this title owed by an institution-affiliated party

of an insured depository institution to a Federal depository

institutions regulatory agency acting in its capacity as

conservator, receiver, or liquidating agent for such institution;

(4) a debt in connection with fraud in the obtaining or

providing of any scholarship, grant, loan, tuition, discount,

award, or other financial assistance for purposes of financing an

education at an institution of higher education (as that term is

defined in section 101 of the Higher Education Act of 1965 (20

U.S.C. 1001)).

(d) The following property may be exempted under subsection

(b)(1) of this section:

(1) The debtor's aggregate interest, not to exceed $15,000 in

value, in real property or personal property that the debtor or a

dependent of the debtor uses as a residence, in a cooperative

that owns property that the debtor or a dependent of the debtor

uses as a residence, or in a burial plot for the debtor or a

dependent of the debtor.

(2) The debtor's interest, not to exceed $2,400 in value, in

one motor vehicle.

(3) The debtor's interest, not to exceed $400 in value in any

particular item or $8,000 in aggregate value, in household

furnishings, household goods, wearing apparel, appliances, books,

animals, crops, or musical instruments, that are held primarily

for the personal, family, or household use of the debtor or a

dependent of the debtor.

(4) The debtor's aggregate interest, not to exceed $1,000 in

value, in jewelry held primarily for the personal, family, or

household use of the debtor or a dependent of the debtor.

(5) The debtor's aggregate interest in any property, not to

exceed in value $800 plus up to $7,500 of any unused amount of

the exemption provided under paragraph (1) of this subsection.

(6) The debtor's aggregate interest, not to exceed $1,500 in

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

trade of the debtor or the trade of a dependent of the debtor.

(7) Any unmatured life insurance contract owned by the debtor,

other than a credit life insurance contract.

(8) The debtor's aggregate interest, not to exceed in value

$8,000 less any amount of property of the estate transferred in

the manner specified in section 542(d) of this title, in any

accrued dividend or interest under, or loan 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.

(9) Professionally prescribed health aids for the debtor or a

dependent of the debtor.

(10) The debtor's right to receive -

(A) a social security benefit, unemployment compensation, or

a local public assistance benefit;

(B) a veterans' benefit;

(D) alimony, support, or separate maintenance, to the extent

reasonably necessary for the support of the debtor and any

dependent of the debtor;

(E) a payment under a stock bonus, pension, profitsharing,

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 and any

dependent of the debtor, unless -

(i) such plan or contract was established by or under the

auspices of an insider that employed the debtor at the time

the debtor's rights under such plan or contract arose;

(ii) such payment is on account of age or length of

service; and

(iii) such plan or contract does not qualify under section

401(a), 403(a), 403(b), or 408 of the Internal Revenue Code

of 1986.

(11) The debtor's right to receive, or property that is

traceable to -

(A) an award under a crime victim's reparation law;

(B) a payment on account of the wrongful death of an

individual of whom the debtor was a dependent, to the extent

reasonably necessary for the support of the debtor and any

dependent of the debtor;

the life of an individual of whom the debtor was a dependent on

the date of such individual's death, to the extent reasonably

necessary for the support of the debtor and any dependent of

the debtor;

(D) a payment, not to exceed $15,000, on account of personal

bodily injury, not including pain and suffering or compensation

for actual pecuniary loss, of the debtor or an individual of

whom the debtor is a dependent; or

(E) a payment in compensation of loss of future earnings of

the debtor or an individual of whom the debtor is or was a

dependent, to the extent reasonably necessary for the support

of the debtor and any dependent of the debtor.

(e) A waiver of an exemption executed in favor of a creditor that

holds an unsecured claim against the debtor is unenforceable in a

case under this title with respect to such claim against property

that the debtor may exempt under subsection (b) of this section. A

waiver by the debtor of a power under subsection (f) or (h) of this

section to avoid a transfer, under subsection (g) or (i) of this

section to exempt property, or under subsection (i) of this section

to recover property or to preserve a transfer, is unenforceable in

a case under this title.

(f)(1) Notwithstanding any waiver of exemptions but subject to

paragraph (3), the debtor may avoid the fixing of a lien on an

interest of the debtor in property to the extent that such lien

impairs an exemption to which the debtor would have been entitled

under subsection (b) of this section, if such lien is -

(A) a judicial lien, other than a judicial lien that secures a

debt -

(i) to a spouse, former spouse, or child of the debtor, for

alimony to, maintenance for, or support of such spouse or

child, in connection with a separation agreement, divorce

decree or other order of a court of record, determination made

in accordance with State or territorial law by a governmental

unit, or property settlement agreement; and

(ii) to the extent that such debt -

(I) is not assigned to another entity, voluntarily, by

operation of law, or otherwise; and

(II) includes a liability designated as alimony,

maintenance, or support, unless such liability is actually in

the nature of alimony, maintenance or support.; (FOOTNOTE 1)

(FOOTNOTE 1) So in original. The period preceding the semicolon

probably should not appear.

(B) a nonpossessory, nonpurchase-money security interest in any

(i) household furnishings, household goods, wearing apparel,

appliances, books, animals, crops, musical instruments, or

jewelry that are held primarily for the personal, family, or

household use of the debtor or a dependent of the debtor;

(ii) implements, professional books, or tools, of the trade

of the debtor or the trade of a dependent of the debtor; or

(iii) professionally prescribed health aids for the debtor or

a dependent of the debtor.

(2)(A) For the purposes of this subsection, a lien shall be

considered to impair an exemption to the extent that the sum of -

(i) the lien;

(ii) all other liens on the property; and

(iii) the amount of the exemption that the debtor could claim

if there were no liens on the property;

exceeds the value that the debtor's interest in the property would

have in the absence of any liens.

(B) In the case of a property subject to more than 1 lien, a lien

that has been avoided shall not be considered in making the

calculation under subparagraph (A) with respect to other liens.

arising out of a mortgage foreclosure.

(3) In a case in which State law that is applicable to the debtor

(A) permits a person to voluntarily waive a right to claim

exemptions under subsection (d) or prohibits a debtor from

claiming exemptions under subsection (d); and

(B) either permits the debtor to claim exemptions under State

law without limitation in amount, except to the extent that the

debtor has permitted the fixing of a consensual lien on any

property or prohibits avoidance of a consensual lien on property

otherwise eligible to be claimed as exempt property;

the debtor may not avoid the fixing of a lien on an interest of the

debtor or a dependent of the debtor in property if the lien is a

nonpossessory, nonpurchase-money security interest in implements,

professional books, or tools of the trade of the debtor or a

dependent of the debtor or farm animals or crops of the debtor or a

dependent of the debtor to the extent the value of such implements,

professional books, tools of the trade, animals, and crops exceeds

$5,000.

(g) Notwithstanding sections 550 and 551 of this title, the

debtor may exempt under subsection (b) of this section property

that the trustee recovers under section 510(c)(2), 542, 543, 550,

551, or 553 of this title, to the extent that the debtor could have

exempted such property under subsection (b) of this section if such

property had not been transferred, if -

(1)(A) such transfer was not a voluntary transfer of such

property by the debtor; and

(B) the debtor did not conceal such property; or

(2) the debtor could have avoided such transfer under

subsection (f)(2) of this section.

(h) The debtor may avoid a transfer of property of the debtor or

recover a setoff to the extent that the debtor could have exempted

such property under subsection (g)(1) of this section if the

trustee had avoided such transfer, if -

(1) such transfer is avoidable by the trustee under section

544, 545, 547, 548, 549, or 724(a) of this title or recoverable

by the trustee under section 553 of this title; and

(2) the trustee does not attempt to avoid such transfer.

(i)(1) If the debtor avoids a transfer or recovers a setoff under

subsection (f) or (h) of this section, the debtor may recover in

the manner prescribed by, and subject to the limitations of,

section 550 of this title, the same as if the trustee had avoided

such transfer, and may exempt any property so recovered under

subsection (b) of this section.

(2) Notwithstanding section 551 of this title, a transfer avoided

under section 544, 545, 547, 548, 549, or 724(a) of this title,

under subsection (f) or (h) of this section, or property recovered

under section 553 of this title, may be preserved for the benefit

of the debtor to the extent that the debtor may exempt such

property under subsection (g) of this section or paragraph (1) of

this subsection.

(j) Notwithstanding subsections (g) and (i) of this section, the

debtor may exempt a particular kind of property under subsections

(g) and (i) of this section only to the extent that the debtor has

exempted less property in value of such kind than that to which the

debtor is entitled under subsection (b) of this section.

(k) Property that the debtor exempts under this section is not

liable for payment of any administrative expense except -

(1) the aliquot share of the costs and expenses of avoiding a

transfer of property that the debtor exempts under subsection (g)

of this section, or of recovery of such property, that is

attributable to the value of the portion of such property

exempted in relation to the value of the property recovered; and

(2) any costs and expenses of avoiding a transfer under

subsection (f) or (h) of this section, or of recovery of property

under subsection (i)(1) of this section, that the debtor has not

paid.

(l) The debtor shall file a list of property that the debtor

claims as exempt under subsection (b) of this section. If the

debtor does not file such a list, a dependent of the debtor may

file suc