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#2113

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS

In Re:

FRANCES ANN MINYEN ,

DENVER CARL MINYEN,

DEBTOR(S)

NO. 92-42201-13

CHAPTER 13

MEMORANDUM OF DECISION

This case is before the Court on the debtors' motion to exempt a home, sell it, and use the proceeds to purchase another home. Creditor Mercantile Bank of St. Louis (Mercantile) has objected to the exemption request. The debtors are represented by John Leighty of Olathe, Kansas. Mercantile is represented by Lisa Patrick of Kansas City, Missouri. The Court has been apprised of the undisputed facts, read the parties' briefs, and is ready to rule.

The undisputed facts are as follows. The debtors filed their chapter 13 proceeding on December 2, 1992. At that time, they were buying a house in Larned, Kansas, on a contract for deed. However, they were working at the Osawatomie State Hospital and living near there, so they had rented out the Larned house. Their schedules showed that the property was rented and indicated that they owed more on the contract for deed and a second mortgage than the property was worth. However, the rental income from the property was enough to cover the payments on the contract and mortgage.

Mercantile has actively participated in this case from the beginning. The debtors filed a chapter 13 plan proposing to pay the mortgage on the rental property through the trustee and to pay the contract for deed directly to its holder. They proposed to pay $675 per month to the trustee until the payments called for under the plan were completed. Their plan was noticed to all creditors, including Mercantile, and was confirmed on February 23, 1993. The debtors have apparently been making the required payments ever since.

Sometime after their plan was confirmed, the debtors changed jobs and now work at the Larned State Hospital. The renters left the house in Larned, and the debtors have moved in and consider the property to be their home. They now wish to claim it as exempt, sell it, and use the proceeds to buy another house. Unless their bankruptcy case somehow precludes it, the Larned house would qualify as the debtors' homestead under Kansas law. The debtors' use of the Larned property as their home has had no monetary effect on their expenses, and the sale of that house and use of the proceeds to buy another will likewise have no net effect on their expenses. The proposed sale and purchase will not adversely affect their ability to complete their plan.

DISCUSSION AND CONCLUSIONS

"A voluntary petition, list, schedule, or statement may be amended by the debtor as a matter of course at any time before the case is closed." Fed.R.Bankr.P. 1009(a); see also In re Calder (Calder v. Job), 973 F.2d 862 (10th Cir. 1992). The debtors seek to amend Form 6, Schedule C to claim their house as exempt. During the two-and-one-half years this case has been pending, the debtors have moved from one area of the state to another for employment purposes, and so are occupying a different residence than they were when the case was filed. Case law in this circuit and others allows debtors to change their exemptions under such circumstances so long as the change does not adversely affect the creditors or other parties who reasonably relied on the schedules as previously filed. Calder, 973 F.2d at 867; In re Lindberg (Armstrong v. Lindberg), 735 F.2d 1087 (8th Cir.), cert. denied 469 U.S. 1073 (1984).

The debtors' plan provided certain treatment for the creditors, including Mercantile. If the debtors are allowed to claim the house as exempt and then sell and replace it, Mercantile will still receive everything the plan proposed to give it (so long as the debtors successfully complete their plan). The plan provided that the debtors would use the income from the house to pay the expenses it generated, and retain their interest in the house at the conclusion of the plan. The creditors were to be unaffected by the debtors' ownership of the house. The house had no value for the creditors at the time of confirmation, and they have no special interest in it. Mercantile does not claim that the debtors misrepresented the circumstances at the time of filing, of confirmation, or now. What the debtors are proposing to do will have no economic impact on their creditors. Confirmation binds the debtors and the creditors to the terms of the plan. 11 U.S.C.A. §1327 (a). Since the debtors' proposal will not affect Mercantile's treatment under the plan, the Court sees no reason to deny the amendment of their schedules or to preclude them from selling the house and using the proceeds to buy another.

For these reasons, Mercantile's objection will be overruled.

The foregoing constitutes Findings of Fact and Conclusions of Law under Rule 7052 of the Federal Rules of Bankruptcy Procedure and Rule 52(a) of the Federal Rules of Civil Procedure. A judgment based on this ruling will be entered on a separate document as required by FRBP 9021 and FRCP 58.

Dated at Topeka, Kansas, this ____ day of March, 1995.













_________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS





In Re: )

)

FRANCES ANN MINYEN , ) NO. 92-42201-13

DENVER CARL MINYEN, ) CHAPTER 13

)

DEBTOR(S). )

JUDGMENT ON DECISION

This case was before the Court on the debtors' motion to exempt a home, sell it, and use the proceeds to purchase another home. Creditor Mercantile Bank of St. Louis (Mercantile) objected to the exemption request. The debtors were represented by John Leighty of Olathe, Kansas. Mercantile was represented by Lisa Patrick of Kansas City, Missouri. The Court was apprised of the undisputed facts, read the parties' briefs, and issued its Memorandum of Decision.

For the reasons stated in the Memorandum, Mercantile's objection is hereby overruled. The debtors' motion is granted.

IT IS SO ORDERED.

Dated at Topeka, Kansas, this _____ day of March, 1995.













__________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

 

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