Memorandum of Decision Re: Amended Claim of Exemption

DO NOT PUBLISH This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
In re
DEPAK and KUSUM STOKES,						No. 99-12603
					Debtor(s).
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Memorandum re Objection to Exemption

The court has previously denied the debtors’ discharge and disallowed claims of exemption in two pension plans because the debtors used the plan for non-retirement purposes. During the course of discovery in this litigation, creditor Northwest Farm Credit Services turned up two additional pension plans established by Kusum Stokes which were unscheduled. The debtors then amended their schedules to include these plans and claimed them exempt. Northwest and the Chapter 7 trustee object on grounds of bad faith and prejudice.

While the debtors have not fared well in litigation before this court, the credibility of debtor Kusum Stokes has never been called into question. The court accepts her testimony that she did not realize, at the time of the bankruptcy filing, that her pension plans had been funded. Their omission from the schedules does not appear to have been intentional, and accordingly the court cannot make the bad faith finding necessary to bar their exemption. The mere delay in amending the schedules is not in itself bad faith. In re Arnold, 252 B.R. 778, 786 (9th Cir. BAP 2000). Evidence of bad faith must be concrete in order to disallow a claim of exemption. Id at 781.

The court does not find any prejudice to the estate or the creditor which would bar belated amendment. Unlike the other pension plans, it does not appear that the plans now in question were used for non-retirement purposes. Neither delay nor creditor disappointment constitutes prejudice sufficient to bar amended exemptions. Id at 787.

For the foregoing reasons, the objections to the amended claims of exemption will be overruled. Counsel for the debtors shall submit an appropriate form of order.

Dated:  May 8, 2002                                         ___________________________
                                                                                          Alan Jaroslovsky