1 EXEMPT PROPERTY JOEL H. KLEIN JOEL H. KLEIN & ASSOCIATES 6800 PARK TEN BLVD SUITE 264-SOUTH SAN ANTONIO, TEXAS PH: FX: ( ) (website) With the Assistance of: DeEnna Jensen Board Certified Paralegal Civil Trial Law Texas Board of Legal Specialization
2 JOEL H. KLEIN Mr. Klein is a board-certified attorney, having been certified as a specialist in Creditors Rights by the American Board of Certification. He was the first attorney so certified in San Antonio. He has served as Chairman of the Southern District of the Commercial Law League, as a member of the Executive Council of the Creditors Rights Section, as Recording Secretary of the CLLA, and currently serves on its Board of Governors. He has handled numerous matters throughout the state involving bankruptcy, reorganizations and commercial collections, representing primarily creditors, but also representing debtors. A substantial portion of his practice is devoted to the collection of commercial claims, and he has developed a network of attorneys and collection agencies throughout the United States, Canada, Mexico and Great Britain with whom he regularly corresponds, both receiving as well as forwarding claims. The Law Firm of Joel H. Klein & Associates has been rated AV (Highest for Ability and Ethical Practice) by Martindale-Hubbell, Inc., in addition to being listed in the Martindale-Hubbell Bar Register of Pre-Eminent Lawyers. Mr. Klein practices law in his own firm, Joel H. Klein & Associates. Prior to that time, Mr. Klein was a shareholder/attorney in Douglas & Elms, Jenkens & Gilchrist, Groce, Locke & Hebdon, and Smith, Barshop, Stoffer & Millsap and Klein & Klein. He has practiced in this field since 1967, when he graduated from the University of TX Law School. In 1965, Mr. Klein obtained his Bachelor of Business Administration from the University of TX in Austin. Mr. Klein is a member of the TX and San Antonio Bar Associations, the Commercial Law League of America, and is a Fellow Member of the College of the State Bar of TX, San Antonio and TX Bar Foundations. He is admitted to practice in all TX Courts in the United States District Courts of the Southern and Western Districts of TX, in the Fifth and Eleventh Circuit U.S. Courts of Appeals, and before the United States Supreme Court. Mr. Klein was one of the first attorneys in San Antonio to take training as a mediator, and he has since qualified as a mediator-arbitrator, having completed both basic and advanced training with the Association of Attorney-Mediators and the Attorney-Mediators Institute. In connection with his mediation practice, he is a member of the Association of Attorney- Mediators. He has served as President of the San Antonio chapter of this association and as a member of the Board of Directors of the National Association of Attorney-Mediators. Mr. Klein has been a frequent lecturer for the State Bar of TX, the San Antonio Area Bankers Code Compliance Association, University of Houston Law Center, the Commercial Law League of America, the National Business Institute and the National Association of Credit Managers, having lectured on the following topics: "Collecting on Judgments"; "Representing the Creditor"; "Collecting on Debts and Judgments"; "Advanced Creditors Rights"; "Collection and Repossession of Consumer Goods"; "Debt Collection"; "Use of Mediator/Arbitration in Collecting Judgments"; "Problems in Pre-Judgment Repossessions and Collections"; "Chapter 11 Bankruptcy; Judgments - Good for Anything but Wallpaper?"; "Lender Liability; Fraudulent Transfers"; "Extension of Credit"; "Chapter 7 Bankruptcy"; "Mediation-Untangling Business Disputes"; "Mechanics and Materialmen's Liens"; "Pitfalls of Purchase Orders"; "Increased Limits in the Small Claims Court"; "Bankruptcy and Personal Exemptions"; "Exemptions Available to the TX Debtor" and "Secured Transactions in TX".
3 TABLE OF CONTENTS I. INTRODUCTION... 1 II. REAL PROPERTY... 1 A. Urban... 1 B. Rural... 1 C. Rental of Homestead... 1 D. Unoccupied Land... 1 E. Homes on Wheels, with Engines, or in the Water... 2 III. PERSONAL PROPERTY... 2 IV. CERTAIN SAVINGS, RETIREMENT, AND COLLEGE SAVINGS PLANS... 2 A. Savings Plans... 2 B. Retirement Plans... 3 C. College Plans... 4 V. INCOME... 4 A. Texas... 4 B. Federal... 4 C. Social Security and Veteran Administration Benefits... 4 VI. SPENDTHRIFT TRUSTS... 4 VII. EXEMPT PUBLIC PROPERTY... 5 A. Public Library... 5 B. Real Property of the State... 5 VIII. BUSINESS ENTITY PROPERTY... 5 A. Solely or Majority Owned Corporation... 5 B. Professional Corporation... 5 C. Partnership... 6 IX. INSURANCE... 6 X. FEDERAL EXEMPTIONS 11 U.S.C. 522(d)... 6 XI. MILITARY MEMBERS MISSING OR STATIONED OVERSEAS... 7 i
4 EXEMPT PROPERTY I. INTRODUCTION Texas has been called by many a Debtor s State in large part because of the Texas Legislatures determination that certain property should be exempt from attachment, execution, and seizure for the satisfaction of a judgment. Many of these exemptions are found in the Texas Property Code Chapters 41, 42, and 44. Additionally, Texas is one of a few states that allows a debtor to select between state and federal exemptions when filing for relief of their debt in bankruptcy. The intent of this Chapter is to cover the wide spectrum of exempt property and determine how the exemptions may affect the possible collection of a judgment through extra ordinary means of garnishment, execution, turnover, attachment, and seizure. Throughout this section, it is important to remember that child support liens are a completely different creature with regard to determining whether certain property is exempt. Most often, the property exemptions allowed for protection from attachment, execution, turnover, and seizure will not apply to child support liens. II. REAL PROPERTY Texas Property Code Chapter 41 addresses real property exemptions, the most common being one s homestead. TEX. PROP. CODE designates the real property subject to exemption to be a homestead and one or more lots used for a place of burial of the dead. 1 This statute allows individuals with family plots on rural acreage to claim exemption status over land that may have been in their family for generations. If an individual and/or family owns certain property in excess of the allowed homestead exemption, he/she may voluntarily designate what portion of the property is exempt. Such designation is accomplished through a recording of same with the county clerk s office where the property is located. 2 The remainder may then be seized and sold to satisfy the judgment. 3 Homesteads are designated as either urban or rural each having certain requirements that must be met to be considered as holding the homestead exemption. A. Urban Urban property may be used as either an urban home or as a combination of an urban home and a 1 TEX. PROP. CODE TEX. PROP. CODE TEX. PROP. CODE place of business consisting of not more than 10 acres of land on one or more contiguous lots. 4 At this time there is not a cap as to the value of the property. In order to qualify as an urban home, the property must be: 1. located within the limits of a municipality or its extraterritorial jurisdiction or a platted subdivision 2. served by police protection, fire protection and at least 3 of the following services: a. electric b. natural gas c. sewer d. storm sewer e. water 5 B. Rural Rural property is broken down further than urban property. The amount of acreage one may claim as rural homestead depends upon whether the property for a family or if it is for a single, adult person. A single adult may claim up to 100 acres as homestead. The 100 acres may consist of one or more parcels of land. 6 A family may claim up to 200 acres as homestead; again the acreage may be made up of more than one parcel of land. 7 Like urban property there is no cap as to the value of the property. C. Rental of Homestead An important provision to remember, especially for those individuals with transient employment (i.e.. Military members), a homestead does not lose its character should the individual/family elect to temporarily make the homestead a rental property, assuming the individual/family does not secure a secondary property that they claim as homestead. 8 D. Unoccupied Land Unoccupied land may also be designated as homestead, but the burden is on the owner to show that he/she presently intends to occupy and to use the premises in a reasonable and definite time in the future and has made such preparations toward actual occupancy and use that are of such character, and to such an extent, as to manifest beyond doubt the intention to complete the improvements and to reside upon the place as a home. 9 4 TEX. PROP. CODE (a) 5 TEX. PROP. CODE (c) 6 TEX. PROP. CODE (b) 7 TEX. PROP. CODE (b) 8 TEX. PROP. CODE Holland v. Alker, 2006 Tex. App. LEXIS 3125 (Tex. App. Houston, April 20, 2006).
5 E. Homes on Wheels, with Engines, or in the Water Over the years the courts have been asked to determine whether homes with wheels and/or engines might take on the characteristics sufficient to be designated as homestead and fall under the exempt property statutes. Norris v. Thomas, 2007 Tex. LEXIS 130 (Tex. February 9, 2007) winds us through the history of the court in determining whether homes on wheels and/or with engines fall under the exemption for homesteads. In Norris, the Court looked to Clark 10 to find that a house trailer placed on blocks with electrical lines running from the house and a plan to connect the house plumbing to the trailer was sufficient to show the trailer was an attachment to the homestead and therefore exempt property. Clark establishes that when a chattel is attached to real estate, it can assume the characteristics of homestead. This was qualified further by Gann 11 when the parties were similarly seeking the exemption for their house trailer. In this matter the courts distinguished that the house trailer in this case did not take on the characteristics of a permanent fixture because the house trailer was moved from location to location as the family moved. In Norris, the court was required to determine if a water vessel could take on the characteristics of a homestead. The water vessel was dock-based with connections to utilities and plumbing. The court found that a water vessel did not meet the criteria necessary to be considered exempt property by homestead. Norris defines the qualifications of a homestead as: 1) physical permanency 2) immobility, and 3) attached to fixed realty This is definitely an area of law to watch for future changes. III. PERSONAL PROPERTY Personal property exemptions are addressed in Texas Property Code Chapter 42 providing that certain property is exempt from garnishment, attachment, execution, or other seizure if: 1) the aggregate fair market value is not more than $60, for a family; or 2) the aggregate fair market value is not more than $30, for a single adult. 12 And that other certain personal property is exempt and not included in the afore mentioned limitations, to include: 10 Clark v. Virz, 190 S.W.2d 736 (Tex. Civ. App. Dallas 1945, writ ref d) 11 Gann v. Montgomery, 210 S.W.2d 255 (Tex. Civ. App. Forth Worth, 1948, writ ref d n.r.e.) 12 TEX. PROP. CODE (a) 2 1) current wages for personal services 2) professionally prescribed health aids 3) alimony, support, or separate maintenance received or to be received by the debtor 4) unpaid commissions for personal services not to exceed 25% of the aggregate limitations set forth for a single adult or for a family. 13 TEX. PROP. CODE designates the following personal property as exempt assuming the aggregate fair market value does not exceed the amounts prescribed for a single adult or a family: 1) home furnishings, including family heirlooms, 2) provisions for consumption, 3) farming or ranching vehicles and implements, 4) tools, equipment, books, and apparatus, including boats and motor vehicles used in a trade or profession. 5) Wearing apparel, 6) Jewelry not to exceed 25% of the aggregate limitations 7) Two firearms 8) Athletic and sporting equipment, including bicycles, 9) A two-wheeled, three-wheeled, or fourwheeled motor vehicle for each member of a family or single adult who holds a driver s license or who does not hold a driver s license but who relies on another person to operate the vehicle for the benefit of the nonlicensed person. 10) The following animals and forage on hand for their consumption a. Two horses, mules, or donkeys and a saddle, blanket and bridle for each b. 12 head of cattle c. 60 head of other livestock, and d. 120 fowl; and e. household pets. 14 IV. CERTAIN SAVING, RETIREMENT, AND COLLEGE SAVINGS PLANS The State of Texas allows for additional exemptions in addition to the aggregate limitations found in TEX. PROP. CODE and ; certain savings plans, retirement plans and college savings plans. A. Savings Plans Due to the fact that the language in TEX. PROP. CODE is very specific, I have opted to include the text of the statute below. 13 TEX. PROP. CODE (b) 14 TEX. PROP. CODE
6 (a) In addition to the exemption prescribed by Section , a person's right to the assets held in or to receive payments, whether vested or not, under any stock bonus, pension, profit-sharing, or similar plan, including a retirement plan for selfemployed individuals, and under any annuity or similar contract purchased with assets distributed from that type of plan, and under any retirement annuity or account described by Section 403(b) or 408A of the Internal Revenue Code of 1986, and under any individual retirement account or any individual retirement annuity, including a simplified employee pension plan, and under any health savings account described by Section 223 of the Internal Revenue Code of 1986, is exempt from attachment, execution, and seizure for the satisfaction of debts unless the plan, contract, or account does not qualify under the applicable provisions of the Internal Revenue Code of A person's right to the assets held in or to receive payments, whether vested or not, under a government or church plan or contract is also exempt unless the plan or contract does not qualify under the definition of a government or church plan under the applicable provisions of the federal Employee Retirement Income Security Act of If this subsection is held invalid or preempted by federal law in whole or in part or in certain circumstances, the subsection remains in effect in all other respects to the maximum extent permitted by law. (b) Contributions to an individual retirement account, other than contributions to a Roth IRA described in Section 408A, Internal Revenue Code of 1986, or an annuity that exceed the amounts deductible under the applicable provisions of the Internal Revenue Code of 1986 and any accrued earnings on such contributions are not exempt under this section unless otherwise exempt by law. Amounts qualifying as nontaxable rollover contributions under Section 402(a)(5), 403(a)(4), 403(b)(8), or 408(d)(3) of the Internal Revenue Code of 1986 before January 1, 1993, are treated as exempt amounts under Subsection (a). Amounts treated as qualified rollover contributions under Section 408A, Internal Revenue Code of 1986, are treated as exempt amounts under Subsection (a). In addition, amounts qualifying as nontaxable rollover 3 contributions under Section 402(c), 402(e)(6), 402(f), 403(a)(4), 403(a)(5), 403(b)(8), 403(b)(10), 408(d)(3), or 408A of the Internal Revenue Code of 1986 on or after January 1, 1993, are treated as exempt amounts under Subsection (a). Amounts qualifying as nontaxable rollover contributions under Section 223(f)(5) of the Internal Revenue Code of 1986 on or after January 1, 2004, are treated as exempt amounts under Subsection (a). (c) Amounts distributed from a plan or contract entitled to the exemption under Subsection (a) are not subject to seizure for a creditor's claim for 60 days after the date of distribution if the amounts qualify as a nontaxable rollover contribution under Subsection (b). (d) A participant or beneficiary of a stock bonus, pension, profit-sharing, retirement plan, or government plan is not prohibited from granting a valid and enforceable security interest in the participant's or beneficiary's right to the assets held in or to receive payments under the plan to secure a loan to the participant or beneficiary from the plan, and the right to the assets held in or to receive payments from the plan is subject to attachment, execution, and seizure for the satisfaction of the security interest or lien granted by the participant or beneficiary to secure the loan. B. Retirement Plans 1) Texas Retirement or pension plans are generally defined in TEX. PROP. CODE as: 1) an annuity, pension, or profit-sharing or stock bonus or similar plan established to provide retirement benefits for an officer or employee of a public or private employer or for a self-employed individual; 2) an annuity, pension, or military retirement pay plan or other retirement plan administered by the United States; and 3) an individual retirement account. 15 Such retirement plans are considered exempt property. Texas Legislature further clarified the exempt status for certain other retirement plans for public employees such as police officers and teachers. 16 There has been a misconception by individuals who have filed bankruptcy that property determined to 15 TEX. PROP. CODE TEX. GOV T. CODE and
7 be exempt in bankruptcy and not subject to creditor recovery is exempt forever. This is not the case. Money in exempt retirement/pension accounts can be converted by the actions of the individual and remain recoverable by post-petition creditors in a bankruptcy proceeding. The exempt status at the time of filing bankruptcy will remove the exempt property from the bankruptcy estate and out of the reach of prepetition creditors. However, if the exempt property is in any way converted to non-exempt property after the filing of bankruptcy, the property losses its exempt status to any post-petition creditors; to include creditors who are successful in avoiding a discharge of their pre-petition claim. 17 2) Federal Federal statutes have several provisions to protect retirement funds of individuals many are geared toward specific groups such as military members 18, railroad employees 19, civil service employees, 20 justices 21 and employees whose employer provides a retirement program 22. The protection carries forward for military members to any monies paid to survivors after the death of the military member. 23 C. College Savings Plans An individual may establish a college savings plan safe from seizure by creditors in one of three forms. 1) An individual may establish a fund or plan under Subchapter F, Chapter 54, Education Code, to include the individual s interest in a prepaid tuition contract 2) An individual may establish a fund or plan under Subchapter G, Chapter 54, Education Code, to include the individual s interest in a savings trust account; or 3) An individual s interest in a qualified tuition program of any state that meets with the requirements of Section 529, Internal Revenue Code of 1986, as amended. 24 V. INCOME A. Texas Except as otherwise provided by state or federal law, current wages for personal service are not subject to garnishment. The garnishee shall be discharged from the garnishment as to any debt to the defendant for 17 Nu-way Energy Corporation v. Delp, 205 S.W.3d 667, 679 (Tex. App. Waco, 2006) U.S.C U.S.C. 235n 20 5 U.S.C U.S.C U.S.C U.S.C TEX. PROP. CODE current wages. 25 This exemption applies to bonuses and commissions as well. 26 This exemption carries over to unemployment compensation; however, unlike wages, once the income is converted, the monies remain exempt unless they are commingled with non-exempt funds; the purpose for this extension is because the monies received through unemployment compensation is considered monies necessary to the day to day needs of the individual. 27 Additionally, governmental assistance for medical assistance is also exempt. Monies derived governmental assistance for medical retain their exempt status at all times. 28 There are exceptions to this exemption due to the particular language of the code; personal services. The courts have ruled that to constitute compensation as wages for services performed necessarily requires that there be a relationship of master and servant, or more broadly speaking, one of principal and agent. 29 Compensation for independent contractors is NOT exempt since there is no master/servant relationship. In order to determine whether the compensation is for master/servant relationship or independent contractor we must look at the specific underlying relationship; essentially determining the amount of control asserted by the alleged master over the alleged servant; Shahan lays a good foundation to determine whether a person is an independent contractor or an employee. B. Federal Although Federal law does allow for wage garnishment, 30 these garnishment laws do not affect residents of the State of Texas since the Federal laws can only be elected over Texas State Laws when a person files for bankruptcy. C. Social Security and Veteran Administration Benefits Social Security and Veteran Administration Benefits are exempt assets. These assets retain their character unless they are used for long term savings or to purchase non-exempt assets. 31 VI. SPENDTHRIFT TRUSTS Spendthrift trusts are a great vehicle to help a family member out who has creditor problems; you can control the amount released and you can secure the 25 TEX. CIV. PRAC. & REM. CODE Davidson Texas, Inc. v. Garcia, (Tex. App. Austin, 1984) 27 TEX. LAB. CODE TEX. HUM. RES. CODE Shahan v. Biggs & Co., 123 S.W.2d 686, 688 (Tex. App. Fort Worth, 1938) U.S.C U.S.C and 42 U.S.C. 407
8 funds from being seized by creditors (excluding child support arrearages). TEX. PROP. CODE (b) provides: A declaration in a trust instrument that the interest of a beneficiary shall be held subject to a spendthrift trust is sufficient to restrain voluntary or involuntary alienation of the interest by a beneficiary to the maximum extent permitted by this subtitle. 32 This provision does not protect funds established by a settlor for his/her benefit. 33 Spendthrift trust exemption was designed to protect the settlor s right to control his/her gift. 34 Interestingly enough though, monies remitted from the spendthrift trusts retain exempt property status until the funds are in the hands or control of the beneficiary and are not subject to recovery even at the time of disbursement. 35 VII. EXEMPT PUBLIC PROPERTY A. Public Library Pursuant to TEX. PROP. CODE , a public library is exempt from attachment, execution, and forced sale. 36 B. Real Property of the State TEX. PROP. CODE provides that the real property of the state, including the real property held in the name of state agencies and funds, and the real property of a political subdivision of the state are exempt from attachment, execution, and forced sale. A judgment lien or abstract of judgment may not be filed or perfected against the state, a unit of state government, or a political subdivision of the state on property owned by the state, a unit of state government, or a political subdivision of the state; any such judgment lien or abstract of judgment is void and unenforceable. 37 VIII. BUSINESS ENTITY PROPERTY Unlike sole proprietorships, there is very little protection from recovery of assets for a corporation. Assets are protected as exempt property only if the corporate entity is a non-profit corporation. 32 TEX. PROP. CODE (b) 33 TEX. PROP. CODE (d). 34 Burns v. Miller, Hiersche, Martens & Hayward, P.C, 948 S.W.2d 317, 321 (Tex. App. Dallas 1997) citing, Caples v. Buell, 243 S.W. 1066, 1067 (Tex. Com. App. 1992); Hines v. Sands, 312 S.W.2d 275, 279 (Tex. Civ. App. Fort Worth 1958, no writ). 35 Id at TEX. PROP. CODE TEX. PROP. CODE A. Solely or Majority Owned Corporation A problem arises, however, when your judgment debtor sets up a corporation and elects to build the corporation by limiting his/her income and/or compensatory benefit from the entity; thereby protecting any assets from recovery for personal liabilities. A simple example might be that the corporation purchases cars in the corporate name, but clearly these cars are for the direct benefit of the individual and if the entity did not exist, would be considered non-exempt recoverable property. In situations where the judgment debtor owns at least a controlling majority of the stock the court has found that such non-exempt property in the name of the corporation is subject to recovery in a judgment against the individual. 38 In Ross, the Court considered the ownership characteristics of a letter of credit. The letter of credit for the benefit of the corporate entity; an entity in which the individual debtor owned a controlling interest. The court found that the individual judgment debtor was the sole owner of the corporation, that the corporation had a right to possess and/or control the letter of credit, and that the corporation had a right to receive the proceeds upon presentment of the letter of credit, and that the court had previously ordered the debtor to turnover his stock (in an order for turnover). 39 This finding was sufficient for the Court to determine that the letter of credit was subject to recovery in the individual s judgment debt. B. Professional Corporation Alternatively, an individual trying to protect assets of a professional corporation may claim that a professional corporation is merely a tool of the trade from which the individual used to perform professional services; much like, computers, trucks, and other equipment are tools of the trade under. 40 The courts have determined that TEX. PROP. CODE and apply to tangible property and not to a separate entity and property owned by the separate entity. 41 Professional corporations are separate and distinct entities from the member himself even when the member is the sole stockholder and/or member; and to allow otherwise would be allowing the individual to pierce his own corporate veil Ross v. National Center for Employment of the Disabled, 170 S.W.3d 635 (Tex. App.-El Paso, 2005). 39 Id at TEX. PROP. CODE and Holland v. Alker, 2006 Tex. App. LEXIS 3125 (Tex. App. Houston, April 20, 2006). 42 Holland v. Alker, 2006 Tex. App. LEXIS 3125 (Tex. App. Houston, April 20, 2006).
9 C. Partnership Similar to a professional corporation, partnership property belongs to the partnership and the individual partners do not retain an interest in the property, only an interest in the partnership itself. 43 IX. INSURANCE Cash value and proceeds of insurance policies are exempt property to both the insured and the beneficiary of: 1) an insurance policy or annuity contract issued by a life, health, or accident insurance company, including a mutual company or fraternal benefit society; or 2) an annuity or benefit plan used by an employer or individual. 44 The exemption is not applicable if: 1) a premium payment made in fraud of a creditor, subject to the applicable statute of limitations for recovery of payment; 2) a debt of the insured or beneficiary secured by a pledge of the insurance policy or the proceeds of the policy; or 3) a child support lien or levy. 45 Texas Government Code further protects financial assistance for the survivors of certain public officers and employees; to include law officers and firefighters, amongst others. 46 X. FEDERAL EXEMPTIONS 11 U.S.C. 522(d) Federal exemptions tend to be more limited than those offered by Texas. For ease, I have provided the text of 11 U.S.C. 522(d) below: (1) The debtor's aggregate interest, not to exceed $18,450 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor. (2) The debtor's interest, not to exceed $ 2,950 in value, in one motor vehicle (3) The debtor's interest, not to exceed $ 475 in value in any particular item or $ 9,850 in aggregate value, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the 43 TEX. Business Organizations CODE TEX. INS. CODE TEX. INS. CODE TEX. GOV T. CODE personal, family, or household use of the debtor or a dependent of the debtor. (4) The debtor's aggregate interest, not to exceed $1,225 in value, in jewelry held primarily for the personal, family, or household use of the debtor or a dependent of the debtor. (5) The debtor's aggregate interest in any property, not to exceed in value $ 975 plus up to $ 9,250 of any unused amount of the exemption provided under paragraph (1) of this subsection. (6) The debtor's aggregate interest, not to exceed $1,850 in value, in any implements, professional books, or tools, of the trade of the debtor or the trade of a dependent of the debtor. (7) Any unmatured life insurance contract owned by the debtor, other than a credit life insurance contract. (8) The debtor's aggregate interest, not to exceed in value $ 9,850 less any amount of property of the estate transferred in the manner specified in section 542(d) of this title [11 USCS 542(d)], in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent. (9) Professionally prescribed health aids for the debtor or a dependent of the debtor. (10) The debtor's right to receive (A) a social security benefit, unemployment compensation, or a local public assistance benefit; (B) a veterans' benefit; (C) a disability, illness, or unemployment benefit; (D) alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor; (E) a payment under a stock bonus, pension, profitsharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, unless (i) such plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debtor's rights under such plan or contract arose;
10 (ii) such payment is on account of age or length of service; and (iii) such plan or contract does not qualify under section 401(a), 403(a), 403(b), or 408 of the Internal Revenue Code of (11) The debtor's right to receive, or property that is traceable to (A) an award under a crime victim's reparation law; (B) a payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor; (C) a payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent on the date of such individual's death, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor; (D) a payment, not to exceed $ 18,450, on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent; or (E) a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor. (12) Retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986 [26 USCS 401, 403, 408, 408A, 414, 457, or 501(a)]. 47 XI. MILITARY MEMBERS MISSING OR STATIONED OVERSEAS Monies deposited from their regular pay by military members while assigned on permanent duty outside the United States and/or considered missing in action is exempt property and not subject to recovery. 48 The statute does not indicate when the exemption runs U.S.C. 522(d) U.S.C