SCOTUSblog: Law v. Siegel
Argument: Jan 13 2014 (Aud.)
Background: Law filed for Chapter 7 bankruptcy. He indicated two liens on his house and a homestead exemption of $75,000. While the homestead exemption would ordinarily be protected in bankruptcy, Siegel (the bankruptcy trustee) sought to compensate the estate for the monetary costs imposed by Law's misconduct by imposing a surcharge on the homestead exemption (effectively eliminating it). The Bankruptcy Court allowed Siegel's surcharge motion, and both the Bankruptcy Appellate Panel and the Ninth Circuit affirmed.
Issue: The question before the Court is whether the Ninth Circuit erred in allowing the bankruptcy trustee to surcharge the debtor’s constitutionally protected homestead property.