When a person files bankruptcy, the law allows for certain “exemptions” so that the person can keep certain things that the legislature has determined are the bare necessities of life in order to make a fresh start. Any property that is not “exempt”, and assuming it is of sufficient value, is to be gathered and then sold for the benefit of the creditors of the person filing bankruptcy.
Different States have different laws about what exemptions are allowed. While there are many similarities, each State is allowed to make its own laws concerning what is exempt and what is not or it can utilize the exemptions created by Congress. In Illinois, one of those things that a person is allowed to keep is a bible. In a recent case, we were again reminded that courts, when faced with unambiguous language in a law (similar to what courts will do with a contract) will enforce the exact terms of the law and not attempt to infer any intent from those words or give those words any different meaning other than their plain and ordinary meaning.
In the recent case, the person who filed bankruptcy (“debtor”) had a bible. But it was no ordinary bible. It was a first edition Book of Mormon from 1830. Everyone agreed that the bible was worth $10,000. The bankruptcy trustee, and the bankruptcy court, said that the debtor should not be allowed to keep this very rare bible, but instead it should be sold for the benefit of her creditors. It was also noted that she had several additional copies of the Book of Mormon in different forms. The bankruptcy court ruled that allowing her to exempt (keep) this particular bible would violate the intent and purpose of the statute, which the bankruptcy court said was to protect a bible of “ordinary value” so as to not deprive a debtor of a worship aid.
The 7th Circuit Court of Appeals reversed the bankruptcy court, and ruled that when looking at a statute, the court first looks at the language itself. It is only when the meaning of the statute is unclear from the language used that the court may look past that language and consider the purpose (intent) behind the law. Because the statute does not say there is any limitation on the value of the bible that can be exempted, it is not the court’s role to read into the statute this additional element of a bible “of limited value”.
Therefore, even though this particular bible would have likely raised enough money to pay back approximately half of the debt that was discharged by the debtor, the 7th Circuit allowed the debtor to keep the very valuable bible rather than having it sold and the money distributed to her creditors.
The lesson in all of this, again, is something that has been discussed extensively throughout this blog, which is when the courts look at either a statute or a contract, the court will enforce the plain meaning of the words used either in that contract or in the statute. It is only when contracts or statutes are ambiguous or unclear that the court is to look at what was the parties’ intent. Therefore, while most people reading this blog will not likely be involved in drafting laws, they will be drafting or reading contracts, and this case serves as yet another reminder to use plain, ordinary language that truly states what the parties want from the particular agreement. The cost of taking the time to draft contracts like that and spend a little more time doing so will save everyone to the contract a lot of time, expense, and heartache that comes from the litigation that would ensue over an uncertain agreement.
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