                              In the

United States Court of Appeals
                For the Seventh Circuit

No. 07-2174

IN RE:

    K ATHERINE A. B ELCHER and K EITH A. B ELCHER,

                                                  Debtors-Appellees.
A PPEAL OF:

    D ONALD M. S AMSON,
                                                             Trustee.


              Appeal from the United States District Court
                 for the Southern District of Illinois.
               No. 06 C 980—G. Patrick Murphy, Judge.



  A RGUED F EBRUARY 26, 2008—D ECIDED D ECEMBER 31, 2008




  Before K ANNE, S YKES, and T INDER, Circuit Judges.
  S YKES, Circuit Judge. Keith and Katherine Belcher filed
for bankruptcy protection in October 2005. After the
trustee sold their home to satisfy their debts, both
claimed a homestead exemption under 735 Ill. Comp. Stat.
5/12-901. The trustee objected to Keith Belcher’s claim,
arguing that Keith could not claim the exemption because
his name was not on the title to the Belchers’ home. The
2                                              No. 07-2174

bankruptcy and district courts determined otherwise. The
trustee now appeals the district court’s determination
that Keith Belcher may claim a homestead exemption
by virtue of a possessory interest in the family home
that he acquired through his marriage to Katherine.
  We reverse. Illinois caselaw has consistently required
a party to have a formalized property interest to claim a
homestead exemption. Because Keith is not on the title
and does not have any other formalized interest in the
property, he cannot claim the homestead exemption.


                     I. Background
  After Keith and Katherine Belcher married, they pur-
chased a house and were both titled on the property. The
Belchers divorced, and Keith quit-claimed his interest
in the house to Katherine, who became the sole title-
holder. The Belchers reconciled and subsequently remar-
ried, but title to the residence remained solely in Kather-
ine’s name. During the couple’s first and second marriages,
Keith lived in the home and contributed to its upkeep
and maintenance. He also put many of the utilities
and the homeowner’s insurance in his name, and the
couple used marital income to pay the mortgage. But
Keith was neither placed back on the title to the home
nor made liable for payment of the mortgage.
   In October 2005, during their second marriage—when
title to the residence was only in Katherine’s name—the
Belchers filed for bankruptcy protection under Chapter 7.
The Belchers’ home was sold to satisfy their debts, and
No. 07-2174                                                         3

Keith and Katherine each claimed a $7,500 homestead
exemption under 735 Ill. Comp. Stat. 5/12-901. That statute,
as it existed when the Belchers filed for bankruptcy,
provided in relevant part:
    Every individual is entitled to an estate of home-
    stead to the extent in value of $7,500 of his or her
    interest in a farm or lot of land and buildings thereon,
    a condominium, or personal property, owned or
    rightly possessed by lease or otherwise and occupied
    by him or her as a residence, or in a cooperative
    that owns property that the individual uses as a
    residence. That homestead and all right in and title
    to that homestead is exempt from attachment, judg-
    ment, levy, or judgment sale for the payment of his or
    her debts or other purposes . . . . This Section is not
    applicable between joint tenants or tenants in com-
    mon but it is applicable as to any creditors of those
    persons. If 2 or more individuals own property that
    is exempt as a homestead, the value of the exemption
    of each individual may not exceed his or her propor-
    tionate share of $15,000 based upon percentage of
    ownership.
735 ILL. C OMP. S TAT. 5/12-901, amended by Act of July 21,
2005, Pub. Act No. 94-293, § 5, 2005 Ill. Laws 2613. 1 While
Katherine received a $7,500 homestead exemption after



1
  The amendment, which took effect in 2006, increased the
exemption amount and allowed each spouse to claim a home-
stead exemption of up to $15,000. See 735 I LL . C OMP . S TAT . 5/12-
901.
4                                                   No. 07-2174

the home was sold, the trustee objected to Keith’s claim
that he, too, was entitled to an exemption. The trustee
argued that because Keith was not listed on the home’s
title when the bankruptcy petition was filed, Keith had
not “owned or rightly possessed [the home] by lease or
otherwise” within the meaning of the Illinois statute.
  This issue has divided the lower federal courts in our
circuit. Some bankruptcy courts have concluded that
spouses could claim a homestead exemption even if they
were not listed on the title to the home. E.g., In re Miller,
174 B.R. 279 (Bankr. N.D. Ill. 1994); In re Silverman, 98 B.R.
415 (Bankr. C.D. Ill. 1988); In re Reuter, 56 B.R. 39 (Bankr.
N.D. Ill. 1985). Others have reached the opposite con-
clusion by drawing on language from older Illinois caselaw
they thought required a spouse to have a titled interest
to obtain the exemption. E.g., In re Popa, 218 B.R. 420
(Bankr. N.D. Ill. 1998); In re Hartman, 211 B.R. 899 (Bankr.
C.D. Ill. 1997); In re Owen, 74 B.R. 697 (Bankr. C.D. Ill. 1987).
The only district court prior to this case to address this
issue sided with those bankruptcy judges who held that
the homestead exemption did not apply unless the
spouse’s name appeared on the title. Popa v. Peterson, 238
B.R. 395 (N.D. Ill. 1999).
  Although the bankruptcy judge in this case identified
these conflicting approaches, he essentially resolved the
issue on prudential grounds. The judge noted that an
earlier bankruptcy court sitting in the Southern District
of Illinois had rejected the idea (albeit in a somewhat
different factual context) that record title was necessary
to claim the homestead exemption. See In re Morris, 115 B.R.
No. 07-2174                                                5

626 (Bankr. S.D. Ill. 1990). To achieve a consistent and
predictable rule in the Southern District of Illinois, the
judge likewise held that a spouse who did not have title
to a home could nevertheless claim the homestead ex-
emption.
  The district court affirmed the ruling of the bankruptcy
judge, although on slightly different grounds. The dis-
trict court first concluded that Keith had a possessory
interest in the family residence by virtue of his marriage to
Katherine. The district court then concluded that the
statutory phrase “owned or rightly possessed by lease or
otherwise” included Keith’s nontitled interest and allowed
him to claim the homestead exemption. Accordingly, the
district court permitted Keith to claim the homestead
exemption even though his name was not on the title of
the home. This appeal by the trustee followed.


                       II. Analysis
   When this bankruptcy proceeding began, Illinois law
permitted individuals to protect up to $7,500 from credi-
tors if they had an “estate of homestead.” 735 ILL. C OMP.
S TAT. 5/12-901 (2005), amended by Act of July 21, 2005, Pub.
Act No. 94-293, § 5, 2005 Ill. Laws 2613. The homestead
exemption is designed to “provide the debtor with the
necessary shelter or the means to acquire shelter re-
quired for his welfare during difficult economic circum-
stances.” Bank of Illmo v. Simmons, 492 N.E.2d 207, 211 (Ill.
App. Ct. 1986). As defined by section 5/12-901, an “estate
of homestead” refers to an individual’s “interest in”
property “owned or rightly possessed by lease or other-
6                                                 No. 07-2174

wise” and “occupied . . . as a residence.” The primary issue
on appeal is whether a debtor-spouse may claim a home-
stead exemption under section 5/12-901 when, at the time
of the bankruptcy filing, the spouse has no formalized
property interest in the home.
   We begin by describing Keith Belcher’s interest in the
family home at the time he and Katherine filed for bank-
ruptcy. Under Illinois’ divorce laws, a nontitled spouse
has a potential equitable interest in the marital home
upon divorce despite not being listed on the title. See
750 ILL. C OMP. S TAT. 5/503(b)(1); In re Marriage of Marriott,
636 N.E.2d 1141, 1147 (Ill. App. Ct. 1994) (finding that
title is one of several factors to be considered in deter-
mining a nontitled spouse’s ownership interest in family
home during divorce proceedings). The Illinois Probate
Code also allows a surviving spouse to claim an equitable
interest in the family home when the titled spouse dies
regardless of whether the property was ever titled in the
surviving spouse’s name. See 755 ILL. C OMP . S TAT. 5/2-1
(intestate share of surviving spouse); id. 5/2-8 (statutory
share of surviving spouse if will renounced); Estate of
Webster, 574 N.E.2d 245, 251 (Ill. Ct. App. 1991). Because
Keith and Katherine Belcher were still married and alive
at the time they filed the petition for bankruptcy, neither
of the situations required to trigger Keith’s equitable
interest under these statutes was present.2
  The Belchers claim that Keith’s future or potential equita-
ble interest is enough for Keith to claim that he “owned or


2
  During the pendency of this appeal, the Belchers divorced a
second time.
No. 07-2174                                                     7

rightly possessed by lease or otherwise” the Belchers’
home. They suggest that the use of the word “otherwise”
in the homestead exemption indicates that Illinois
residents in Keith’s position are permitted to claim the
exemption. The trustee disagrees, claiming that section
5/12-901 allows only those with formal interests in a
home to claim the homestead exemption. In the trustee’s
view, the word “otherwise” permits those with
formalized possessory property interests other than
outright ownership or leases, such as a life estate, to
claim the exemption. See also Rice v. United Mercantile
Agencies of Louisville, Ky., 70 N.E.2d 618, 620 (Ill. 1947) (“[I]t
is not necessary that the householder have a fee title
upon which to predicate his homestead estate.”).
  The trustee’s interpretation has better support from
the Illinois cases applying the exemption. Illinois courts
have previously suggested that a titled interest is re-
quired to sustain a homestead estate. See, e.g., De Martini v.
De Martini, 52 N.E.2d 138, 142 (Ill. 1943) (“The right of
homestead being by our present statute enlarged into an
estate, it follows that like all other estates, it can have
no separate existence apart from the title on which it
depends.”); First Nat’l Bank & Trust Co. v. Sandifer, 258
N.E.2d 35, 37 (Ill. App. Ct. 1970) (stating that “[s]ome title,
no matter what its extent, is also necessary” to claim a
homestead exemption). For example, in Sterling Savings &
Loan Ass’n v. Schultz, 218 N.E.2d 53 (Ill. App. Ct. 1966), a
woman tried to claim a homestead estate based on land
she possessed as a beneficiary of a land trust. The Illinois
appellate court noted that the trust agreement denied
her “any right, title or interest in or to any portion of said
8                                                    No. 07-2174

real estate as such, either legal or equitable.” Id. at 63. The
court denied the woman’s request for a homestead ex-
emption, holding that “some title, no matter what its
extent, is necessary to sustain a homestead estate.” Id. at 62.
Similarly, in Jones v. Kilfether, 139 N.E.2d 801 (Ill. App. Ct.
1956), a husband claimed the right to eject a houseguest
from the family home, arguing that his mere occupancy
of property fully titled to his wife gave him a homestead
estate. The court rejected the premise of his claim, declar-
ing that because “the right of homestead can have no
separate existence independently of the title which con-
stitutes one of its essential elements and from which it
is inseparable, he has no right of homestead and therefore
no right to possession of the property on that basis.” Id.
at 804.
  Admittedly, many of these cases turned on the definition
of “householder” used in prior incarnations of the
homestead-exemption statute that permitted only one
spouse—the head of the household—to claim a home-
stead exemption.3 A 1982 amendment replaced the term
“householder” with “individual,” thus allowing more
than one person to claim the exemption. See The 1982
Revisory Act, Pub. Act No. 82-783, art. III, § 43, 1982 Ill.
Laws 220; First Nat’l Bank of Moline v. Mohr, 515 N.E.2d



3
  At oral argument we suggested that the age of these cases
might make this issue appropriate for certification to the Illinois
Supreme Court. Following argument, however, the Belchers’
counsel withdrew based on a conflict of interest, making
certification impractical.
No. 07-2174                                                9

1356, 1358 (Ill. App. Ct. 1987) (explaining that the amend-
ment sought to “liberalize” or “expand” the homestead
exemption).
   But later developments convince us that the 1982 expan-
sion of the homestead exemption did not eliminate the
requirement of a formalized property interest. In Mohr, the
Illinois appellate court noted that the amendment made
it possible for a husband and a wife to each claim a home-
stead exemption. A concurring judge believed that the
1982 amendment allowed an unlimited number of home-
stead estates to exist in a single property. Mohr, 515
N.E.2d at 1359 (Heiple, J., concurring). In the concurring
judge’s view, if a homestead estate was worth $7,500 and
a 10-member family lived in the house, the family’s
homestead estate would equal $75,000. The Illinois Gen-
eral Assembly responded by amending the homestead-
exemption statute in 1994, adding this sentence: “If 2 or
more individuals own property that is exempt as a home-
stead, the value of the exemption of each individual
may not exceed his or her proportionate share of $15,000
based upon percentage of ownership.” Act of Dec. 14, 1994,
Pub. Act No. 88-672, § 25, 1994 Ill. Laws 2649 (emphasis
added). By using the words “own” and “ownership,” the
1994 amendment establishes that something more than
mere possession is required to claim the homestead
exemption.
  The only Illinois case we found that might support the
Belchers’ homestead-exemption claim is Rendleman v.
Rendleman, 8 N.E. 773 (Ill. 1886). In Rendleman, the Illinois
Supreme Court held that a wife whose husband had
10                                            No. 07-2174

deserted her acquired a homestead right. The court rea-
soned that “it is unimportant whether the title to the
homestead premises is in the husband or in the wife”
because “the holder of the title cannot wrongfully deprive
the other of the enjoyment of the homestead premises.” Id.
at 776. We do not find Rendleman persuasive here; the
decision rested on a deserted spouse’s right of dower,
and Illinois has subsequently abolished the right of
dower. See Popa, 238 B.R. at 401 n.4; Hartman, 211 B.R. at
903. In any event, this 122-year-old decision has little
bearing on whether the 1982 amendment liberalized
the exemption to such an extent as to include Keith’s
claim. We cannot identify anything else to suggest that
the 1982 amendment authorizes a homestead exemption
in the absence of a formalized property interest.
  The Belchers urge us to adopt the reasoning of the
bankruptcy court in In re Reuter, 56 B.R. 39. There, the
court held that the Rights of Married Persons Act and the
Release of Homestead Act 4 gave a nontitled spouse
who lived in the marital residence a property interest
sufficient to claim the homestead exemption. The Rights
of Married Persons Act (known as the Rights of Married
Women Act until 1992) provides: “Neither the husband
nor wife can remove the other or their children from
their homestead without the consent of the other, unless
the owner of the property shall, in good faith, provide
another homestead suitable to the condition in life of the



4
 The proper name of the act appears to be the Conveyances
Act.
No. 07-2174                                              11

family . . . .” 750 ILL. C OMP. S TAT. 65/16. The Release of
Homestead Act requires that a spouse’s release or waiver
of homestead rights must be express; it provides:
    No deed or other instrument shall be construed as
    releasing or waiving the right of homestead, unless the
    same shall contain a clause expressly releasing or
    waiving such right. And no release or waiver of the
    right of homestead by the husband or wife shall bind
    the other spouse unless such other spouse joins in
    such release or waiver.
765 ILL. C OMP. S TAT. 5/27. The bankruptcy court in Reuter
concluded that the combination of these statutes with
the potential equitable interests of a nontitled spouse
under Illinois’ divorce and probate laws create a home-
stead estate that allows a nontitled spouse to claim the
exemption.
   We disagree with this reasoning. By requiring one
spouse to provide a homestead for another spouse, the
Rights of Married Persons Act only protects the right of
the nontitled spouse to have housing somewhere. Contrary
to what the Belchers suggest, the Act does not create a
property interest in the marital home because it does not
guarantee a possessory interest in that property. Even if
it did, that interest would simply be a right to occupy the
home, and Illinois courts have consistently held that
“something more than mere possession is required to
entitle a party to a homestead estate.” Schultz, 218 N.E.2d
at 62. The Release of Homestead Act likewise has no
bearing on whether a homestead estate exists. The
Release of Homestead Act simply reinforces the rights
guaranteed in the Rights of Married Persons Act by
12                                              No. 07-2174

making it more difficult for one spouse to claim the
other spouse waived his or her right to homestead accom-
modation; it does not inform the determination of what
interest in property gives rise to a homestead exemption.
Furthermore, homestead exemptions are designed to
protect property from third-party creditors. Yet the
Rights of Married Persons Act and the Release of Home-
stead Act address only the rights of a nontitled spouse vis-
à-vis the titled spouse; they are silent regarding the
rights of third-party creditors.
  Our interpretation of the homestead exemption also
avoids creating an anomalous result. If Keith
individually declared bankruptcy, we doubt the family
home could be part of Keith’s bankruptcy estate under
11 U.S.C. § 541. Because only Katherine owns the home,
Keith had no “legal or equitable” interest in the home
when the bankruptcy petition was filed, id. § 541(a)(1), and
we have found no case concluding that creditors could
rely exclusively on Keith’s potential interest in the
property to reach the home in satisfaction of his debts,
see id. § 541(a)(2)(B). Yet under the interpretation the
Belchers propose, in a joint bankruptcy proceeding,
Keith would be able to rely on this potential interest to
protect some of the proceeds from the sale of the house
from creditors. We think Illinois courts would resist
creating this irreconcilable conflict.
  We conclude Keith Belcher is not entitled to a home-
stead exemption under 735 Ill. Comp. Stat. 5/12-901. Ac-
cordingly, we R EVERSE the judgment of the district court.

                          12-31-08
