The chapter 7 trustee and creditor Alaska Pipe & Supply have objected to the debtor's claim of exemptions in proceeds she receives monthly from certain notes receivable. The allowance or disallowance of exemptions for property of the estate is a core proceeding in accordance with 11 U.S.C. § 157(b)(2)(B). This court has jurisdiction pursuant to 11 U.S.C. § 1334(b) and the district court's order of reference. I find for the debtor.

Background

      Dorismae Melin is an elderly widow who lives in Palmer. She raised nine children and was not employed outside the home. She has been fighting cancer for several years. It is currently in remission.

      Ms. Melin filed for chapter 7 relief on January 5, 1999. She claimed an exemption in the "right to receive up to $2,530.00 per month in liquid assets from notes, receivables" under A.S. § 09.38.030(b). Ms. Melin appears to have about $20,571.00 in notes receivable arising from the sale of certain lots in a subdivision adjacent to her home. She receives about $550.00 a month in income from the notes. Other than donations from family members, her only other source of income is social security. She receives $524.00         6 ABR 311  per month in survivors benefits. She lives quite modestly. Her monthly expenses exceed $1,700.00, with an allowance of but $100 monthly for medical and dental expenses. Given Ms. Melin's poor physical condition, that allowance may be substantially understated. Family members contribute about $440.00 per month to Ms. Melin to make up the difference between her income and expenses.

      Ms. Melin's position is that A.S. § 09.38.030(b) permits her to exempt the income stream she receives from the notes receivable. The trustee has objected to Ms. Melin's claimed exemption in the notes to the extent they exceed the sum of $2,490.00. He concedes that the notes are encompassed within A.S. § 09.38.030(b) as "liquid assets," but contends the debtor is entitled to only a one-time exemption in the amount of $2,490.00, and cannot exempt future income from the notes under the Alaska exemption statutes. Alaska Pipe & Supply has joined in that objection.

Analysis

A.S. § 09.38.030(b) provides:

(b) An individual who does not receive earnings either weekly, semi-monthly, or monthly is entitled to a maximum exemption for the aggregate value of cash and other liquid assets available in any month of $1,400, except as provided in (f) and (h) of this section and in A.S. 09.38.050. The term "liquid assets" includes deposits, securities, notes, drafts, accrued vacation pay, refunds, prepayments, and receivables, but does not include permanent fund dividends before or after receipt by the individual.⁽¹⁾

"Statutory construction begins with analysis of the language of the statute construed in view of its purpose."⁽²⁾

The objective of statutory construction is to give effect to the intent of the legislature, with due regard for the meaning that the statutory language conveys to others. Though we give unambiguous statutory language its ordinary and common meaning, we have rejected the "plain meaning" rule as an exclusionary rule, and we may look to legislative history as a guide to construing a statute's words. The plainer the meaning of the statute, the more persuasive any legislative history to the contrary must be.⁽³⁾

      A.S. § 09.38.030 was adopted as a part of a comprehensive legislation revising Alaska's exemption statutes in 1981. The policies underlying the legislative revisions were outlined in a memorandum from John W. Abbott, Chairman of the Alaska Code Revision Commission:

The commission has determined that the exemption laws of the state are out of date and do not provide adequate protection for property in possession of an individual which is necessary to provide the basic necessities of life for the individual and his family. . . . .

The Alaska Code Revision Commission has attempted to present suggested legislation which balances the often-competing         6 ABR 313  interests of both debtors and creditors. Creditors need simple and inexpensive procedures for collecting unsecured debts while debtors must have protection for their property so that they are not deprived of property which supplies the basic necessities of life or be required to seek public assistance benefits. . . . Seasonally employed individuals are afforded protection from garnishment of their earnings in a way that permits the exercise of an exemption for funds accumulated during the work season over the entire year. . . . ⁽⁴⁾

Mr. Abbott's comments are consistent with the general policy behind all exemption laws.

[T]here are five purposes to be served by exemption statutes: First, they provide a debtor with enough money to survive. Second, they protect his dignity and his cultural and religious identity. Third, they afford a means of financial rehabilitation. Fourth, they protect the family unit from impoverishment. Fifth, they spread the burden of a debtor's support from society to his creditors. Thus, exemption statutes may be said to provide the debtor and his family with a means of obtaining a livelihood and preventing them from becoming a charge on the public.⁽⁵⁾

These purposes are well served by the provisions of § 09.38.030. A.S. § 09.38.030(a) allows a working debtor to exempt $402.50 per week for the necessities of life.⁽⁶⁾ Under A.S. § 09.38.030(b), debtors who are not receiving earnings may exempt a similar amount ($1,610.00 per month as of January, 1999) for the necessities of life from "available" cash or other liquid assets. There is no restriction on the number of months that the exemption may be claimed. It is a continuing exemption which allows a debtor to retain sufficient         6 ABR 314  funds to provide for her basic needs.⁽⁷⁾ The legislative history of the exemption statute, coupled with the fact that "liquid assets" are treated within the same statute and in the same manner as earnings, supports Ms. Melin's position.

      Statutory interpretation also requires that the court give "due regard" to the meaning that the statutory language conveys to others. This is difficult here because the language of § 09.38.030(b) is ambiguous. Creditors may view the phrase "liquid assets available in any month" broadly and inclusive of all payments due in the future because a note can be sold at a discount by the debtor for cash. Others may view the phrase more narrowly. Unless the note or other obligation is payable in full, it is not truly "available in any month" for the full face amount of the note. It is only available as payments are actually made pursuant to the terms of the note or receivable.

      There are several reasons why a narrower view of § 09.38.030(b) should prevail here. Alaska has adopted the "sliding scale approach" to statutory interpretation. Under this view, "the plainer the language of the statute, the more convincing evidence of contrary legislative intent must be."⁽⁸⁾ Because the language of A.S. § 09.38.030(b) is not clear, legislative intent is important to its interpretation. As noted above, the Alaska Code Revision Commission's comments express an intent to create a "safety net" of earnings or liquid assets for debtors. Debtors are not to be deprived of monthly income that supplies the basic necessities of life simply because they do not have "earnings." This intent should prevail over the ambiguous language of the statute.

        6 ABR 315  Additionally, Alaska recognizes the accepted general rule that "exemption laws are remedial in character and should be liberally construed in favor of the debtor."⁽⁹⁾ Given the two views of the statute presented to the court, it is appropriate to adopt a view of A.S. § 09.38.030(b) that will further its remedial mission.

      The debtor comes well within the maximum exemption of $1,610.00 per month provided by § 09.38.030(b). Her regular income consists of $524.00 in social security survivor's benefits and $550.00 per month in note payments. Even if the $440.00 per month she gratuitously receives from her children were also included as "liquid assets available in any month," her monthly gross income is only $1,514.00 per month. This sum is within the allowable exemption for "liquid assets" specified in § 09.38.030(b). Accordingly, the objections to the debtor's claim of exemption in the notes receivable will be overruled.

      The trustee has also asked the court to issue a ruling that the debtor's homestead exemption is limited to the sum of $62,100, pursuant to A.S. § 09.38.010. It is so limited but any additional equity is consumed by the judgment lien of Alaska Pipe & Supply.⁽¹⁰⁾

    6 ABR 311  1. As of January 5, 1999, the date Ms. Melin filed for chapter 7 relief, the amount of liquid assets available for exemption had been increased to the sum of $1610.00 per month. 8 AAC 95.030(d)(2).

    6 ABR 312  2. Borg Warner Corp. v. Avco Corp., 850 P.2d 628, 633 n. 12 (Alaska 1993) (citation omitted).

    6 ABR 312  3. City of Dillingham v. CH2M Hill Northwest, Inc., 873 P.2d 1271, 1276 (Alaska 1994) (citations omitted).

    6 ABR 313  4. Journal of the House of Representatives of the State of Alaska, pp. 151-52 (February 4, 1981).

    6 ABR 313  5. 31 AM. JUR. 2d, Exemptions § 3 (1989).

    6 ABR 313  6. The $350.00 sum originally set forth in A.S. 09.38.030(a) had been increased to $402.50 as of January, 1999, the date the debtor filed for bankruptcy relief. 8 AAC 95.030(d)(1).

    6 ABR 314  7. See, e.g. AS 09.38.035, which provides for a continuing lien only on a garnishee's nonexempt earnings until the writ is satisfied.

    6 ABR 314  8. O.R. v. State, Dept. of Health & Soc. Serv., 932 P.2d 1303, 1310-1311 (Alaska 1997) (citation omitted); see also City of Dillingham, 873 P.2d at 1276.

    6 ABR 315  9. Gutterman v. First Nat'l Bank of Anchorage, 597 P.2d 969, 972 (Alaska 1979) citing In re Canutt, 264 F.Supp. 919, 920 (D. Or. 1967).

    6 ABR 315  10. On 6/7/99 at docket entry 30, this court entered an order voiding the judgment lien of Alaska Pipe & Supply except for the sum of $13,300.00 based on an appraised value of $100,000.00 for the debtor's residence.