Gladwell v. Reinhart

Appellee claimed an exemption in bankruptcy for seventy-five percent of wages that he earned prior to filing his bankruptcy petition but that were either paid to or still owing to Appellee after the date of the petition. Appellee based his claim on section 1673 of the federal Consumer Credit Protection Act and, alternatively, on section 103 of the Utah Consumer Credit Code. The trustee of Appellee's bankruptcy estate (Trustee) opposed the claimed exemption. The bankruptcy court permitted the exemption, the district court summarily affirmed, and the Trustee appealed. The Tenth Circuit Court of Appeals held that section 1673 did not permit Appellee's claimed exemption. To resolve the state law question presented under section 103, the appeals court certified a question of law to the Utah Supreme Court. The Court answered that Appellee could not rely on section 103 to assert an exemption in bankruptcy, as section 103 does not create an exemption in bankruptcy and, instead, limits garnishment of a debtor's disposable earnings under narrow circumstances. View "Gladwell v. Reinhart" on Justia Law