Objections to Exemptions
The short answer is yes, a bankruptcy trustee can object to the exemptions you claim on your bankruptcy schedules. To do so, the trustee will usually file a motion with the court stating the basis for her objections. From there, the matter will be set for hearing before the Bankruptcy Judge. The debtor will usually not be required to attend the hearing, the lawyers will battle it out in front of the Judge if they are unable to settle the matter outside of court.
The bankruptcy code has a provision that allows a creditor or trustee to object to an exemption that they believe is improperly claimed, and for the trustee, the usual motive is cold hard cash. To the extent they can dislodge an exemption, they may force the debtor to pay them the non-exempt value of the property.
The objection must be filed with the court no later than 30 days after the meeting of creditors and must be in writing. The creditor or trustee may request an extension of the 30 days but it must be filed with the court before the expiration of the 30 days. The creditor or trustee who is objecting has the burden of proving that the exemption was improperly claimed. It is important to remember that just because a debtor claims property as an exempt, it does not mean that the property will survive a challenge from a creditor or trustee as to the validity of the exemption.