Exemptions and Negligent Homicide

| Sep 4, 2010 | Bankruptcy |

A case out of the 1st Circuit dealt with a debtor who was found guilty of negligent homicide by a motor vehicle.  She settled the case with the victim’s husband and then filed Chapter 7 bankruptcy.  The debtor claimed a homestead exemption of $500,000.  She argued that the negligent homicide was not a “criminal act” under section 522(g)(1)(B)(iv), thus her homestead exemption should not be capped.  

She claimed that in order for negligent homicide to be a criminal act, there must be a mens rea requirement beyond negligence.  Additionally, the debtor argued that public policy required the homestead exemption be liberally construed.  The court of appeals concurred with the bankruptcy court’s holding that the term “criminal act” included negligent homicide by a motor vehicle and that a conviction was not required to trigger the cap on the homestead exemption, and it was capped at $125,000.