Dr. Morris Lebovitz and Kerrye Hill Lebovitz, husband and wife, were residents of the state of Tennessee. Dr. Lebovitz filed for bankruptcy protection as a result of illness. Mrs. Lebovitz (Debtor) filed for bankruptcy because she had cosigned on a large loan with Dr. Lebovitz. The Debtor is the owner of the following pieces of jewelry: a Tiffany five carat diamond engagement ring (purchase price $ 40,000 to $ 50,000), a pair of diamond stud earrings of approximately one carat each, a diamond drop necklace of approximately one carat, and a Cartier watch. All of these items were gifts from Dr. Lebovitz.
Tennessee opted out of the federal bankruptcy exemption provisions and adopted its own bankruptcy exemption provisions. Tennessee does not provide for an exemption for jewelry. Tennessee does provide for an exemption for “necessary and proper wearing apparel.” Debtor claimed that her jewelry was necessary and proper wearing apparel and was therefore exempt property from the bankruptcy estate. The bankruptcy trustee filed an objection to the claim of exemption, arguing that the Debtor’s jewelry does not qualify for an exemption and should be part of the bankruptcy estate. Does Debtor’s jewelry qualify as necessary and proper wearing apparel, and should it thus be exempt property from the bankruptcy estate? In re Lebovitz, 344 B. R. 556, 2006 Bankr. Lexis 1044 (United States Bankruptcy Court for the Western District of Tennessee, 2006)