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Carpenter v. Ries (In re Carpenter)

614 F.3d 930 (2010)

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Carpenter v. Ries (In re Carpenter)

United States Court of Appeals for the Eighth Circuit

614 F.3d 930 (2010)

Facts

The Social Security Administration (SSA) determined that Todd Carpenter (debtor) was disabled and eligible for retroactive payments. In September 2007, Carpenter received a check from the SSA for the total retroactive benefits. Carpenter deposited the money in a checking account when he received the check. Carpenter withdrew the money in a cashier’s check in April 2008 and filed for Chapter 7 bankruptcy a few months later. Carpenter claimed that his social security proceeds were exempt from his bankruptcy estate under Bankruptcy Code § 522(d)(10)(A), which exempted a debtor’s right to receive social security benefits and other public-assistance benefits. Carpenter also claimed protection for his social-security proceeds under 42 U.S.C. § 407, a section of the Social Security Act stating that no money paid or payable under the Social Security Act would be subject to the operation of bankruptcy law and that no other law could modify or change the Social Security Act’s provisions. Charles W. Ries (plaintiff), the trustee of Carpenter’s bankruptcy estate, objected to Carpenter’s claimed exemption and argued that the funds were the property of Carpenter’s bankruptcy estate. The bankruptcy court agreed with Ries. On appeal, the United States Bankruptcy Appellate Panel reversed, holding that the social security proceeds were excluded from the estate under 42 U.S.C. § 407. Ries appealed.

Rule of Law

Issue

Holding and Reasoning (Riley, C.J.)

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