In re: Blackburn, No. 10-03005-JDP (Bankr. D. Idaho, January 19, 2011).
When can an individual debtor save his personal tools from liquidation in bankruptcy? This issue was recently addressed by a bankruptcy court in Idaho.
The debtors, Travis and Tabitha Blackburn, claimed a state exemption in a tool trailer, a compressor, and several other tools. A few years prior to filing for bankruptcy, Travis had owned a construction company that built homes. During the recession, business slowed, and he was forced to seek work in the concrete industry. At his job in the concrete industry, Travis was provided all necessary large tools by his employer, but continued to use his own hand tools.
Although he was forced to seek outside employment, Travis still owns the construction company, and seeks work for the company. Because of this, he claimed an exemption for his tools as "tools of the trade", because he intends to return to the carpentry trade. The trustee challenged this characterization, however.
The court sided with the trustee in this case, holding that Travis's tools were not tools of the trade under the Idaho exemption, because he did not absolutely need the tools for financial support. While understandable, the court's decision would have permitted Travis to keep his tools had he not sought additional work in the concrete business. Because he did, he was forced to pay much more to creditors in the way of his earnings and his personal assets.
