Home > Journals > WMBLR > Vol. 4 (2013) > Iss. 2 (2013)
William & Mary Business Law Review
Abstract
This Note implores states that have not already done so to opt out of the provisions of the Federal Bankruptcy Code that place explicit limits on the amount a debtor is allowed to exempt from liquidation. By doing so, states will be able to provide debtors who operate their own small business a greater degree of protection from creditors, as those states are entitled to establish their own limit on the value of the tools of a debtor’s trade the debtor may shield in bankruptcy. This Note contends that Congress has evinced an intent within the last decade to restrict the ability of small business debtors to exempt the value of their assets and that federal judges have shown unwillingness to allow states to provide debtors with a choice between federal exemption limits and state exemption limits. Consequently, it is incumbent upon states to expressly opt out of the relevant portions of the Bankruptcy Code to provide their small business debtors the more generous slate of exemption laws that the evidence suggests these states intended to provide in the first instance.