Case Summary:
The chapter 7 trustee sought to deny the debtor’s discharge and his exemption claims on the grounds that the debtor’s pre-petition bankruptcy exemption planning had risen to the level of conduct which “hindered, delayed, or defrauded creditors” under either § 727(a)(2)(A) or the relevant Wisconsin statute, Wis. Stat. § 815.18(10). The standard applied to these issues is essentially the same in the Seventh Circuit, and exemption planning, in and of itself, is not objectionable. Instead, the plaintiff is obligated to demonstrate that the debtor engaged in some act “extrinsic to the conversion” which hinders, delays, or defrauds. After reviewing the stipulated facts, the court concluded that there was no evidence that the debtor engaged in the type of “extrinsic” conduct required for denial of his discharge or his exemption claims. However, the court also concluded that the debtor was not entitled to claim an exemption for a number of college savings plans under Wis. Stat. § 815.18(3)(p) because a review of the statute and the “surrounding or closely-related statutes” as required by relevant Wisconsin case law indicated that the exemption was limited to protection of the “beneficiary’s right to qualified withdrawals” under

Statute/Rule References:
11 U.S.C. § 727(a)(2)(A) -- Hindering, Delaying, or Defrauding Creditors
Wis. Stat. § 815.18 -- Exemptions

Key Terms:
Discharge
Exemptions (Annuity/College Savings Plan)