Gary L. Aukard and Betty J. Aukard

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
IN RE: :
:
GARY L. AUKARD : Case No. 05-12940PM
BETTY J. AUKARD : Chapter 13
:
Debtors :
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - :
MEMORANDUM OF DECISION
Before the court is a Motion in Limine filed by Debtors seeking a ruling that the current
market value of their residence is $120,000.00 as listed on Schedule A filed by them. Originally,
the court set this matter for hearing on February 7, 2006, but the court believes it more efficient
to decide this matter without a hearing as the underlying facts are not in dispute. Thus, the
parties may address the forthcoming confirmation hearing more expeditiously.
This case was originally filed as a case under Chapter 7 on February 10, 2005. The
Debtors scheduled the property as stated and also claimed exemptions totaling $11,000.00 in the
property, to which no objections were filed. Therefore, the Debtors are entitled to claim an
exemption of $11,000.00 in the subject property. Debtors then argue that this fixes the value of
the house and, after converting the case to Chapter 13, that therefore, under § 1325(a)(4) of the
Bankruptcy Code, they need only distribute under their Chapter13 Plan what they term the
“unexempt” interest in the property. The court disagrees.
To begin, property of the estate subject to the Chapter 7 Trustee’s administration consists
of all of the equity in the subject property minus the exemption. Clearly, the Chapter 7 Trustee
did not “buy” the valuation because one of her first actions was to employ a broker to sell the
Date signed January 05, 2006
Entered: January 06, 2006 Case 05-12940 Doc 76 Filed 01/06/06 Page 1 of 2

subject property. When that sale became imminent, Debtors, having knowingly undervalued this
real estate, converted the case to a case under Chapter 13. It is true that the time for filing
objections to Debtors’ exemptions has long passed in that a new 30-day period for filing
objections to exemptions under Bankruptcy Rule 4003(b) does not follow for conversion. In re
Smith, 235 F.3d 472, 477 (CA9 2000), and In re Bell, 225 F.3d 203, 213 (CA2 2000). In any
event, it is settled that the evaluation is as of the effective date of the Plan, that is, the present
dollar value on the confirmation date. See Rake v. Wade, 508 U.S. 464, 469 (1993), and In re
Allen, 240 B.R. 231, 237 (BC W.D. Va. 1999).
Thus, Debtors’ valuation of their property on their Schedule A has no evidentiary effect
other than perhaps as an admission that the property is worth not less than that amount.
Valuation of the property for the purposes of § 1325(a)(4) of the Bankruptcy Code requires
competent evidence in the absence of consent, and the Debtors have the burden of proof as to all
confirmation issues. An appropriate order will be entered.
cc:
Gary/Betty Aukard, 2502 Newglen Avenue, Forestville, MD 20747
Andrew P. McGuire, Esq., Regan Associates, 1003 K Street, NW, Washington, DC 20001
Janet M. Nesse, Trustee, 1150 18th Street, N.W., Suite 800, Washington DC 20036
Timothy P. Branigan, Esquire, P.O. Box 1902, Laurel MD 20725-1902
End of Memorandum
Case 05-12940 Doc 76 Filed 01/06/06 Page 2 of 2