OTHER NEWS - April 22, 1992

Ruling Favors Bankrupt Debtors: The Supreme Court made it more difficult for creditors to get at money that bankrupt debtors wrongly claimed was exempt from being used to pay their bills. The court’s 8-1 decision said any claimed exemptions--even if they have no legal basis--may not be challenged after the 30-day time limit that federal bankruptcy law provides for such challenges. After that, Justice Clarence Thomas wrote for the court, bankruptcy trustees and creditors are out of luck. The justices left unanswered, however, the question of whether courts may disallow exemptions not claimed in good faith. Thomas said that issue was not raised soon enough in the case.