342 North Clarendon Avenue | Scottdale, Georgia 30079
  • Google +
  • Facebook
  • Linked In
  • Twitter
  • Rss Feed
  • Jeff Field & Associates
404.381.1278 Free Initial Consultation
Chapter 7 Bankruptcy


Contact Us

Are you buried in debt? Are you constantly being harassed by creditors? Have you received a notice of foreclosure?

Filing for bankruptcy can help you put an end to all of these problems. At Jeff Field & Associates, our lawyers...


Chapter 7 Bankruptcy Blog Post

Blog Update: Exempting An Annuity In A Chapter 7 Case (Silliman v. Cassell)

A previous blog published in August 2013 re-visited the important role of exemptions in a Chapter 7 case of shielding certain property from the trustee and creditors so that the property (in this case, the stream of income from an annuity) will be available for a debtor's "fresh start". 

In Silliman v. Cassell, the property the debtor wished to shield was a "single premium", "fixed sum" annuity that was purchased with  $220,000.00 "inherited" from her mother prior to filing her Chapter 7 case. The annuity provided for a monthly payment of $1389.14 per month "for her life" and was guaranteed for 10 years with no right to ever access the corpus of the annuity. As earlier discussed in the blog, Judge Hagenau held that the annuity was "a contract to provide benefits in lieu of earnings" and was a true retirement plan. On appeal,the District Court affirmed that decision. Unhappy with the decision, the trustee appealed the case to the 11th Circuit Court of Appeals on 6-29-12. The 11th Circuit  requested that the Georgia Supreme Court determine whether the debtor's annuity qualified as an "annuity" under 44-13-100(a)(2)(E)  and, if it did, were the payments she received "on account of age".

The Georgia Supreme Court concluded that the common feature of the group of benefits exempt under 44-13-100(a)(2) was to provide income that substitutes for wages and that that this particular annuity provided income as a substitute for wages. The Supreme Court found that when the debtor purchased this annuity, she was self-employed and "did not have access to an employer- funded retirement or pension plan". 

The Court noted that the debtor had "testified that she purchased the annuity to replace her income given her age, 65, to support her in her retirement". It appears that the debtor's testimony was never controverted. Based on the response of the Georgia Supreme Court to the certified question from the 11th Circuit, the 11th Circuit affirmed Judge Hagenau's decision that this annuity was exempt.

Bottom line: when an annuity is involved, a debtor's proof must demonstrate that the contract provides income as a substitute for wages and is not just an investment plan (non-exempt) and otherwise satisfies the requirements set out in (a)(2)(E).

Post a Comment

Your email is never published nor shared. Required fields are marked *


In order to help you more quickly, please fill out the quick form and submit.

  • This field is for validation purposes and should be left unchanged.
Contact Form