It is also worth noting an argument raised by Oriental Bank that was not addressed in the court’s opinion. According to the bank, the property

It is also worth noting an argument raised by Oriental Bank that was not addressed in the court’s opinion. According to the bank, the property

issue was beyond the court’s jurisdiction because it was claimed as

debtor’s homestead exemption pursuant to Act No. 195-2011. The problem with that argument (aside from the fact that courts routinely entertain suits to avoid liens that encumber exempt property) was that the debtor and the chapter 7 trustee executed a settlement agreement under which the debtor agreed to the sale of the property by the trustee and to receive $75,000 as full satisfaction for his homestead exemption (the debtor’s schedules indicated that the property’s value was $154,000).

Although no party opposed the approval of the settlement—and the bankruptcy court subsequently approved it—in this adversary proceeding the bank argued that the settlement was null because it was contrary to Act 195.

Specifically, the bank argued that Act 195 does not allow a debtor to partially waive its rights thereunder, or otherwise waive them for reasons beyond those specifically enumerated in the Act’s Section 4.

The court did not address this issue, possibly because it was not necessary to resolve the cross-motions for summary judgment. However, it will be interesting to see if it is eventually addressed, especially in light of the fact that it is unclear what was the consideration that the debtor received in exchange for waiving more than half of the value of his right to the homestead exemption.