The Mooney opinion – Health Savings Accounts and bankruptcy

As a bankruptcy attorney in Mount Vernon, IL for over 20 years, I read through and analyze court rulings throughout the country, as they may be a harbinger of things to come in districts in which I practice and can be used to help Debtors get the financial relief they need.

Here is the opinion as to the availability of a Health Savings Account to a Trustee for liquidation in a Chapter 7.

 

Read a synopsis and review of the subject here

 

In re: DENISE E. MOONEY, Debtor/Plaintiff-Appellant, versus JOY R. WEBSTER, Trustee/ Defendant-Appellee. An appeal from the United States District Court for the Middle District of Georgia dated January 27, 2017. Case: 15-11229

Date Filed: 01/27/2017

Before HULL and JILL PRYOR, Circuit Judges, and CONWAY, District Judge.

When Denise E. Mooney filed a petition for Chapter 7 bankruptcy in 2013, she claimed the assets in her health savings account (“HSA”) as property exempt from the bankruptcy estate.  As we previously recognized, the Bankruptcy Code permits states to adopt their own lists of property that is exempt from a bankruptcy estate.  See In re Mooney (“Mooney I”), 812 F.3d 1276, 1279 (11th Cir. 2016) (citing 11 U.S.C. § 522(b)(2)).  Georgia has set forth its list of exempt property in O.C.G.A. § 44-13-100.  Mooney claims that the contents of her HSA are exempt from her bankruptcy estate pursuant to O.C.G.A. § 44-13-100(a)(2)(C), which exempts, in relevant part, any “disability, illness, or unemployment benefit,” and O.C.G.A. § 44-13-100(a)(2)(E), which exempts any “payment under a pension, annuity, or similar plan or contract on account of illness [or] disability. . . .”

The Chapter 7 trustee, Joy Webster, objected to the HSA’s exemption.  The bankruptcy court sustained Webster’s objection, and the district court affirmed.

On appeal, we certified questions to the Supreme Court of Georgia, including:

(1) Does a debtor’s health savings account constitute a right to receive a “disability, illness, or unemployment benefit” for the purposes of O.C.G.A. § 44–13–100(a)(2)(C)?

(2) Does a debtor’s health savings account constitute a right to receive a “payment under a pension, annuity, or similar plan or contract” for the purposes of O.C.G.A. § 44–13–100(a)(2)(E)? Mooney I, 812 F.3d at 1283.

The Supreme Court of Georgia answered both questions in the negative, holding that under Georgia law, an HSA does not constitute a right to receive a “disability, illness, or unemployment benefit” for the purposes of OCGA § 44-13-100 (a) (2) (C), nor does it constitute a right to receive a “payment under a pension, annuity, or similar plan or contract” for the purposes of OCGA § 44-13-100 (a) (2) (E). Mooney v. Webster, 794 S.E.2d 31, 36 (Ga. 2016).[1]  The Supreme Court of Georgia’s answers to our certified questions foreclose Mooney’s arguments on appeal.  Under Georgia law, Mooney was not entitled to claim the assets in her HSA as property exempt from the bankruptcy estate.  Accordingly, we affirm.

AFFIRMED.

 

 

About the blogger: Michael Curry of Curry Law Office in Mount Vernon, Illinois has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.

He is also the author of books on finance and bankruptcy available on Kindle through Amazon!

Whether you live in Mount Vernon, Salem, Waltonville, Woodlawn, Lawrenceville, Centralia, Louisville, Xenia, Grayville, Effingham, Dieterich, Vandalia, McLeansboro, Dahlgren, Albion, Flora, Clay City, Kinmundy, Chester, Sparta, Olney, Mount Carmel, Nashville, Fairfield, Cisne, Wayne City, Carmi, Grayville, or anywhere in Southern Illinois call Curry Law Office today at (618) 246-0993 and Finally Be Financially Free!

 

 

 

[1] We certified a third question as well:  “Is a debtor’s right to receive a payment from a health savings account ‘on account of illness [or] disability’ for the purposes of O.C.G.A. § 44– 13–100(a)(2)(E)?” Mooney I, 812 F.3d at 1283.  Because the Supreme Court of Georgia answered our first two questions in the negative, it did not address the third question.  Mooney, 794 S.E.2d at 32.

 

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One thought on “The Mooney opinion – Health Savings Accounts and bankruptcy

  1. Pingback: Health Savings Accounts and Bankruptcy | Curry Law Office

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