When the Trustee Objects
When you file for bankruptcy, the trustee will review your Schedule C. Your case is then scheduled for a 341 hearing, which is also called a meeting of creditors. The trustee may ask you some questions about your exemptions at the hearing. He has 30 days after the meeting to notify the court that he objects to one or more of them. The objection is then set for a hearing and a judge will decide whether to allow the exemption.
Why the Trustee Might Object
The trustee might not object to an exemption itself, but rather the dollar value you're assigning to certain property. For example, if your state offers a $4,000 automobile exemption and you claim that your late-model luxury vehicle is only worth $4,000 so you can keep it, this might raise an eyebrow. Or, you might have used your homestead exemption to protect a residence you don't actually live in. The trustee is paid a percentage of the value of the property he sells, so he might put your Schedule C under a microscope to make sure you can legally keep every asset you're claiming.