Law v. Siegel (2013)
- Docket
- 12-5196
- Decided
- 2013-01-01
Summary
Question: When a debtor creates fictional liens to prevent a trustee from selling a property, should a Bankruptcy Court allow a surcharge to extend to normally exempted homestead property? Conclusion: No. Justice Antonin Scalia delivered the opinion for the unanimous Court. The Supreme Court held that, while a Bankruptcy Court has the authority to issue any order, process, or judgment necessary to carry out the provisions of the Bankruptcy Code, it may not contravene specific statutory provisions. In this case, the Bankruptcy Court exceeded the limits of its authority by awarding the Law’s homestead exemption to Siegel. Although the statute does not require a debtor to establish a homestead exemption, once he has done so the Bankruptcy Court may not refuse to honor that exemption. Even in the case that a debtor is dishonest, the Bankruptcy Court may not impose sanctions that would violate the terms of the Bankruptcy Code, such as the debtor’s ability to establish a homestead exemption.