When his wife asked him to move out of the family home in 2008, Virgil Herd Jr. took up residence in his horse trailer. He made some improvements on the 20×6, 1997 Wrangler Gooseneck to stay warm, got permission from the owner of the property where the trailer was parked for access to use an electrical outlet, and set up a barrel and pump for water. He used his friend’s address to receive mail. Herd also used the trailer to haul horses owned by him and by his girlfriend from time to time.

Herd filed for bankruptcy in 2010 and he listed the horse trailer as personal property with a value of $3,000. He called it a “camping trailer.” In a Chapter 7 proceeding, most of the debtor’s assets (including things like horse trailers) are sold by the bankruptcy trustee and the proceeds are distributed among the creditors. The purpose of bankruptcy is to extinguish debts and give the debtor a fresh start.

A problem arose when Herd also included the trailer on a schedule of exemptions allowed under Missouri law for “any mobile home used as the principle residence but not on or attached to real property in which the debtor has a fee interest not to exceed five thousand dollars in value.” “Homestead exemptions,” such as the one claimed by Herd, are allowed so the debtor’s home is not sold out from under him.

The bankruptcy trustee objected to the homestead exemption for the horse trailer. He argued that Herd had not used the trailer for his principle residence prior to filing the bankruptcy petition and that the trailer did not qualify as either a “mobile home” or as a “manufactured home” under Missouri law. The bankruptcy court disagreed and allowed the horse trailer exemption. The court explained that while the trailer had not been manufactured as a dwelling it had been modified for that purpose, that Herd lived there at least part of the time, and that he had no other place to live