Changes in South Dakota Exemption Statutes and Property of Bankruptcy Estate includes Alimony Award

On July 1, 2013, several changes to South Dakota's statutes on exemptions from levy and attachment went into effect.  S.D.C.L. §43-45-2 was amended by adding a new subsection (8) for "[a]ny health aids professionally professionally prescribed to the debtor or to a dependant of the debtor."  S.D.C.L. §43-45-4, commonly known as the "wildcard" exemption, was amended to raise the limit on the value of other exempted personal property by a debtor as head of a family to $7,000.00 and by a debtor not the head of a family to $5,000.00.

Property exemptions are located in various titles and chapters of the South Dakota Code. When using West's South Dakota Codified Laws in print or on WestlawNext, it is recommended that you use the index.  To locate property exemption statutes, first look under the heading "Debtors and Creditors," and the subheading "Exempt property."   Bloomberg Law,  Fastcase, the Legislative Research Council website, and Lexis Advance do not include indexes for the South Dakota statutes.  When using these resources to locate property exemption statutes, it is recommended that you begin with South Dakota Codified Laws chapters 43-45, 43-31, 58-12, 58-37A, 61-6, and 62-4.  For all the resources mentioned above, you should do further research to find additional exemption statutes within the Code.

In other recent legal news affecting the law of debtors and creditors, the United States Bankruptcy Appellate Panel of the Eighth Circuit in Mehlhaff v. Allred (In re Mehlhaff) upheld the United States Bankruptcy Court for the District of South Dakota's order that a debtor's prepetition alimony award was property of her bankruptcy estate within 11 U.S.C. §541(a)(1), and was not expressly excluded by §541(b) or (c)(2).  In addition, the Eighth Circuit Panel quoted the South Dakota Supreme Court in Jasper v. Smith, 540 N.W.2d 399, 403-04 (S.D. 1995):  "[a]n examination of the statutes shows the [South Dakota] legislature has seen fit to exempt certain property from the attachment process in SDCL ch. 43-45 but alimony is not one of them."  The Panel also noted that although the federal bankruptcy exemption scheme provided a specific exemption for future alimony payments in 11 U.S.C. §522(d)(10)(D), South Dakota opted out of this scheme and does not provide an alimony exemption. 

(This entry was originally written and posted by Marsha Stacey)