This matter comes before the Court on Appellant the United States of America's appeal from the final judgment of the United States Bankruptcy Court for the Eastern District of Virginia (the "Bankruptcy Court"). The United States and Appellees Matthew A. Copley and Jolinda M. Copley (the "Appellees" or "Debtors") have filed their respective briefs. (ECF Nos. 16, 17, 19.) The Court dispenses with oral argument because the materials before it adequately present the facts and legal contentions, and argument would not aid the decisional process. The Court exercises jurisdiction pursuant to 28 U.S.C. § 158(a)(1).1 For the reasons that follow, the Court will affirm the decision of the Bankruptcy Court and will dismiss this appeal.

I. Standard of Review

"When reviewing a decision of the bankruptcy court, a district court functions as an appellate court and applies the standards of review generally applied in federal courts of appeal." Paramount Home Entm't Inc. v. Circuit City Stores, Inc. , 445 B.R. 521, 526-27 (E.D. Va. 2010) (citing In re Webb , 954 F.2d 1102, 1103-04 (5th Cir. 1992) ). The district court reviews the bankruptcy court's legal conclusions de novo and its factual findings for clear error. In re Harford Sands Inc. , 372 F.3d 637, 639 (4th Cir. 2004). A finding of fact is clearly erroneous if a court reviewing it, considering all of the evidence, "is left with the definite and firm conviction that a mistake has been committed." Anderson v. City of Bessemer City , 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985) (quoting United States v. United States Gypsum Co. , 333 U.S. 364, 365, 68 S.Ct. 525, 92 L.Ed. 746 (1948) ); accord In re Mosko , 515 F.3d 319, 324 (4th Cir. 2008) (quoting United States Gypsum Co. , 333 U.S. at 365, 68 S.Ct. 525 ). In cases where the issues present mixed questions of law and fact, the Court will apply the clearly erroneous standard to the factual portion *269of the inquiry and de novo review to the legal conclusions derived from those facts. Gilbane Bldg. Co. v. Fed. Reserve Bank of Richmond, Charlotte Branch , 80 F.3d 895, 905 (4th Cir. 1996).

II. Factual and Procedural Background

A. Factual Background 2

This appeal arises out of the Debtors' petition for bankruptcy under Chapter 7 of the United States Bankruptcy Code.3 The petition for bankruptcy proceeded on stipulated facts. On May 29, 2014, the Debtors filed a petition for bankruptcy, along with Schedules A through J.4 On Schedule E,5 the Debtors identified the Internal Revenue Service ("IRS") as a creditor holding unsecured priority claims for "Income Taxes" for tax years 2008, 2009, and 2010 in the cumulative amount of $13,547.10. (App. 0025, ¶ 2.) On Schedule C,6 the Debtors listed as exempt a "refund from 2014 federal ... income taxes" in the amount of $3,208.007 pursuant to Virginia Code § 34-4 (Virginia's Homestead Exemption).8 (App. 0026, ¶ 4 (emphasis added).) The parties agree that the Debtors intended to exempt the 2013 federal income tax overpayment.

On June 3, 2014, the Debtors each filed a Homestead Deed with the Clerk of the Circuit Court for Spotsylvania County, Virginia, claiming as exempt a "Refund from 2014 federal ... income taxes [in the amount of] $3,208.00." (App. 0026, ¶ 6 (emphasis added).) The parties agree that the Debtors intended to exempt the 2013 federal income tax overpayment.9

On June 6, 2014, the Debtors filed their 2013 federal tax return with the IRS. The Debtors reported that their 2013 tax liability totaled $7,054.00, but that $10,262.00 had been withheld from their earnings. Because the Debtors overpaid federal income *270taxes in 2013 by $3,208.00, they claimed a refund in that amount.

On or about June 30, 2014, IRS records demonstrate that the IRS mailed a Notice to the Debtors, informing them that their "2013 Form 1040 overpayment was applied to tax [they] owe[d]." (App. 0027, ¶ 9.) The Debtors deny receiving this notice.10 The summary identified the Debtors' "overpayment for 2013 in the amount of $3,208.00" and listed $3,208.00 as the "[a]mount applied to tax owed for [years] 2008 [and] 2009." (App. 0027 ¶ 9 (brackets in original).) Using the $3,208.00, the IRS paid in full the Debtors' $158.76 unpaid tax balance from 2008, and applied the remaining $3,049.24 to the Debtors' 2009 unpaid tax balance. The IRS then wrote off the remainder of the Debtors' 2009 unpaid tax balance by reason of their discharge in bankruptcy.11

B. Procedural History

On February 1, 2015, the Debtors filed an Amended Complaint in the Bankruptcy Court,12 seeking to compel the United States to turn over the $3,208.00 tax overpayment. The Debtors sought the tax refund return because they had listed it as an exempt asset pursuant to Virginia Code § 34-4 and 11 U.S.C. §§ 52213 (the debtor's right to exempt), 542(a)14 (requirement to turn property over to the estate), and 553(b)15 (the right to setoff). Both parties filed motions for summary judgment.

On March 22, 2016, the Bankruptcy Court issued a final order and memorandum opinion. The Bankruptcy Court granted the United States's motion for summary judgment on Count I, denying the Debtors' request for turnover of the tax overpayment under the Virginia common law principle of assumpsit. The Bankruptcy Court granted the Debtors' motion for summary judgment on Count II, granting the Debtors' request for turnover of the tax overpayment under §§ 522 and 542(a).16

On April 6, 2016, the United States filed an amended notice of appeal17 challenging whether the Bankruptcy Court had jurisdiction to hear the case and claiming, for the first time on appeal, that it did not waive sovereign immunity for the purpose of the Debtors' claims. The United States *271never asserted in the Bankruptcy Court that sovereign immunity barred the Debtors' claim, so the Bankruptcy Court did not reach that issue. The Court remanded the case to the Bankruptcy Court to rule on the issue of sovereign immunity. After considering the parties' briefing on the issue, the Bankruptcy Court ruled that Congress abrogated the United States's sovereign immunity under 11 U.S.C. § 106(a).18

The United States renewed its appeal, on four grounds: (1) the Bankruptcy Court lacked jurisdiction to compel the IRS to refund the tax overpayment; (2) the Debtors' 2013 federal income tax overpayment did not become part of the bankruptcy estate until after the IRS set off the overpayment against the Debtors' prepetition income tax liability pursuant to 26 U.S.C. § 6402 ;19 (3) the United States did not need to object to the Debtors' claim for a refund to preserve its setoff rights because the Debtors' refund claim lacked any value; and, (4) the United States's setoff right under § 553 supersedes the Debtors' exemption rights under § 522. The Court begins, as it must, by assessing the threshold jurisdictional challenge.

III. Analysis: Sovereign Immunity

The United States argues that the Bankruptcy Court lacked jurisdiction to hear the Debtors' refund suit because the United States has not waived its sovereign immunity from such cases under 11 U.S.C. § 106. Specifically, the United States says that none of the Bankruptcy Code sections referenced in § 106 -specifically, 505,20 *272522, 542, and 553-provides the Debtors with "an avenue for bringing a suit to recover a tax overpayment." (Appellant's Br. 15, ECF No. 16.)

The Bankruptcy Court held § 505 inapplicable, found §§ 522 and 553 directly implicated, and determined that the United States was "bound by the abrogation of sovereign immunity provided in § 106(a)." (App. 0074.) On appeal, the United States argues that "[§] 106(a)'s waiver allows a court to take action against the United States only in the manner and to the extent set out in the listed Code provisions." (Appellant's Br. 12.) The United States argues that the listed code sections at issue-505, 522, 542, and 553-do not abrogate the United States's sovereign immunity in this case because none of the applicable code sections create a cause of action like the one at bar. For the reasons below, the Court will affirm the Bankruptcy Court's holding.

A. Legal Standard for the United States's Sovereign Immunity in Bankruptcy Cases

Absent a waiver that permits suits against it on a particular kind of matter, sovereign immunity protects the United States and its agencies from suit. FDIC v. Meyer , 510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994). Any waiver of sovereign immunity by the United States must be "unequivocally expressed" and "construed strictly in favor of the sovereign." United States v. Nordic Village, Inc. , 503 U.S. 30, 33-34, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992) (internal quotation marks and citations omitted). If an action falls outside the strictly-construed terms of an unequivocal waiver, the Court lacks subject-matter jurisdiction, and the action must be dismissed. See id. ; Meyer , 510 U.S. at 475, 114 S.Ct. 996.

The Bankruptcy Code expressly abrogates sovereign immunity in 11 U.S.C. § 106 as to fifty-nine (59) provisions of the Bankruptcy Code. The list of provisions includes 11 U.S.C. §§ 505, 522, 542, and 553.

B. Sections 106, 522, and 553 Abrogate the United States's Sovereign Immunity

Section 106 expressly abrogates the United States's sovereign immunity for the purpose of this suit. First, Debtors bring their claims pursuant to §§ 522 and 553. Because the suit directly implicates §§ 522 and 553, and because resolving the case requires resolving the tension between §§ 522 and 553, the case falls squarely within the scope of §§ 522 and 553. Section 106, in turn, abrogates the United States's sovereign immunity with regard to suits implicating these provisions. See 11 U.S.C. § 106(a)(1). Further, § 106 also states: "[t]he court may hear and determine any issue arising with respect to the application of such sections to governmental units." 11 U.S.C. § 106(a)(2) ) (emphasis added).

As the Bankruptcy Court explained, "the Court is being called upon to reconcile the enforceability of an exemption under § 522 [and] the ability of the United States to exercise a setoff under § 553." (App. 0073.) The United States Bankruptcy Court for the Western District of Virginia thoroughly analyzed the issue:

At least two of the statutes expressly enumerated in Section 106(a), 11 U.S.C. § 522 and 11 U.S.C. § 553, are directly implicated in this case, wherein the Court is asked to determine whether the Debtor has an enforceable exemption in the tax overpayment that entitles her [or him] to a refund over the IRS's claim of offset.... [T]he issues at hand go to the crux of the functions of [§§] 522 and *273553, both expressly within the [§] 106 waiver provisions.

In re Benson , 566 B.R. 800, 805 (Bankr. W.D. Va. 2017). The Bankruptcy Court held, correctly, §§ 522 and 553 directly implicated in this suit.

The United States argues that § 106(a)(1) abrogates sovereign immunity only to the extent that the listed provisions create an independent cause of action, and that neither § 522 nor § 553 creates a cause of action that would authorize Debtors to bring this suit.21 Although the Bankruptcy Court did not expressly address the United States's argument for a more narrow construction of §§ 522 and 553, the Court concludes that this argument lacks merit.

The United States asks the Court to adopt the novel interpretation that § 522 does not create a cause of action similar to the one at bar because "[t]he only 'suit provisions' of [§] 522 are subsections (f) (relating to the avoidance of liens), and subsection (h), which allows a debtor to recover a setoff in very limited circumstances that are patently inapplicable to this case." (Appellant's Br. 17.) The United States invites the Court to adopt this construction without citing to any legal precedent for this proposition. Indeed, contrary Virginia law exists. See, e.g. , In re Benson , 566 B.R. at 805 (finding that claims almost identical to the claims at bar fit within the meaning of § 522 ). Adopting the United States's narrow interpretation would contradict the express terms of Bankruptcy Code § 106.

Also, abrogation of sovereign immunity pursuant to § 106(a) supports the goals of the Bankruptcy Code, including "centraliz[ing] disputes over the debtor's assets and obligations in one forum, thus protecting both debtors and creditors from piecemeal litigation and conflicting judgments." In re Benson , 566 B.R. at 806 (citing In re White Mountain Mining Co., LLC , 403 F.3d 164, 170 (4th Cir. 2005) ). Abrogation serves additional Bankruptcy Code goals, such as facilitating the cost-effective use of the Debtors' financial resources and the efficient use of judicial resources. In re Benson , 566 B.R. at 806. Finally, abrogation facilitates the Bankruptcy Code's fundamental goals: "provid[ing] debtors with a fresh start and creditors with an equitable distribution of the debtor's assets." Moses v. CashCall, Inc. , 781 F.3d 63, 72 (4th Cir. 2015) (citing Katchen v. Landy , 382 U.S. 323, 328, 86 S.Ct. 467, 15 L.Ed.2d 391 (1966) ). In short, "the obvious purpose of [§] 106(a), and the most reasonable interpretation to give effect to its provisions, is to bring adjudication of all those matters [including those related to the tension between §§ 522 and 553 ] under one roof-that of the bankruptcy court." In re Benson , 566 B.R. at 806.

*274Section 106(b), which permits a court to "hear and determine any issue arising with respect to the application of such sections to governmental units," further supports this interpretation. 11 U.S.C. § 106(a)(2) ) (emphasis added). The Bankruptcy Court highlighted this provision in holding that § 106 abrogates the United States's sovereign immunity. The United States asserts that adopting the Bankruptcy Court's interpretation "would substantially widen the scope of suits to which the United States is subject." (Appellant's Br. 22.) According to the United States, were the Court to affirm the Bankruptcy Court's interpretation of sovereign immunity under § 106(a), "the only rule would be that a debtor cite to one of the enumerated sections without needing to actually fit within that section's language." (Appellant's Br. 25.) The United States overstates the effect of the Bankruptcy Court's holding.

The present case does not simply cite to §§ 522 and 553, but directly implicates the application of §§ 522 and 553. The Debtors' claim "fits within" § 522 because they allege that the IRS improperly withheld the $3,208.00 in violation of the Debtors' claimed § 522 exemption. The United States invoked § 553 to perform the disputed offset. The application of these provisions constitute the heart of the case. Nothing in the Bankruptcy Court's interpretation of the United States's abrogation of sovereign immunity under § 106(a) commands the expansive consequence suggested by the United States.

As have other courts to address the issue, this Court concludes that § 106(a) abrogates the United States's sovereign immunity under §§ 522 and 553, meaning that the Bankruptcy Court properly exercised jurisdiction over the claims before it.22 See, e.g. , In re Benson , 566 B.R. at 806.23 For this reason, the Court will affirm the Bankruptcy Court's conclusion that the United States was subject to suit under §§ 522 and 553 pursuant to § 106(a).

IV. Analysis: The IRS's Right to Offset the 2013 Tax Refund

The Bankruptcy Court masterfully understated that "[t]he effect of a taxpayer's filing bankruptcy while the government is in the process of executing an offset pursuant to [ § 6402 ] has generated a great deal of conflicting case law." (App. 0036 (citing In re Sexton , 508 B.R. 646, 659-62 (Bankr. W.D. Va. 2014) ; In re Pigott , 330 B.R. 797, 799 (Bankr. S.D. Ala. 2005) ).) The United States Court of Appeals for the Fourth Circuit has not resolved the tension between the exemption provisions and tax offset provisions at issue here.24 Federal *275courts across the country have taken varying approaches, and reached contrary outcomes, when addressing the interplay of setoffs and exemptions under the Bankruptcy Code. Indeed, some tension has developed recently among Virginia federal courts. Compare In re Benson , 566 B.R. 800 (holding that § 553 preserves the IRS's right to setoff under § 6402 without qualification), with In re Addison , 533 B.R. 520 (Bankr. W.D. Va. 2015), aff'd No. 1:15CV41, 2016 WL 223771 (W.D. Va. Jan. 19, 2016) (finding § 6402 setoff rights subject to the Bankruptcy Code's automatic stay provisions), and In re Sexton , 508 B.R. 646 (finding that a properly claimed exemption under § 522 supersedes § 553.).25

For the reasons that follow, the Court will affirm the Bankruptcy Court's rulings. First, the Court cannot find that the Bankruptcy Court abused its discretion in disallowing the setoff. After thoroughly reviewing the law and the cases the Bankruptcy Court relied on, the Court cannot find that the Bankruptcy Court erroneously applied the law. Therefore, for the reasons explained below, the Court agrees with the Bankruptcy Court's conclusion that § 522 supersedes § 553.

A. The Bankruptcy Court Did Not Abuse its Discretion

The Court reviews the Bankruptcy Court's decision to disallow a setoff for abuse of discretion. In re Lambert Oil Co., Inc. , 347 B.R. 508, 521 (W.D. Va. 2006) (citing In re Larbar Corp. , 177 F.3d 439, 447 (6th Cir. 1999) ; see also In re Gould , 401 B.R. 415, 421 (9th Cir. BAP 2009), aff'd , 603 F.3d 1100 (9th Cir. 2010). The Bankruptcy Court considered the parties' arguments and existing bankruptcy court decisions from the Western District of Virginia to hold that § 522 supersedes § 553 in this case. The Court recognizes that "a bankruptcy court necessarily abuses its discretion if it bases its decision on an erroneous view of the law or clearly erroneous factual findings." In re Gould , 401 B.R. at 429.

As discussed below, after thoroughly reviewing the cases that the Bankruptcy Court relied on, cases from other jurisdictions, and the parties' arguments, the Court determines that the Bankruptcy Court did not err in its application of the law or rely on clearly erroneous facts to reach the conclusion that § 522 supersedes § 553. The Court also finds that the Bankruptcy Court acted within its discretion to disallow the § 553 setoff.

B. The Debtors Retain Their Right to the 2013 Tax Overpayment

The Court recognizes that many courts addressing the interplay between § 522 and § 553 have reached conflicting conclusions. This case presents a difficult legal issue, and one lacking a straightforward *276resolution. But after evaluating the statutes and extant caselaw, the Court concludes that the Debtors retain their right to the 2013 overpayment.

First, the Debtors' claim to the $3,208.00 overpayment for their 2013 federal taxes vested on December 31, 2013, at midnight. Next, the $3,208.00 overpayment became part of the bankruptcy estate upon the Debtors' filing, on May 29, 2014. At that juncture, any right the United States had to the Debtors' overpayment became subject to the provisions of the Bankruptcy Code. Finally, the Debtors' rights under § 522 supersede the United States's right to offset under § 553. Section 553's discretionary application, concerns over nullification, and the fundamental policy goals of the Bankruptcy Code support this conclusion. The United States shall release the $3,208.00 overpayment to the Debtors.

1. Applicable Statutory Provisions

Several statutory provisions undergird this case. To aid its later discussion, the Court outlines the relevant provisions below.

a. Setoff Rights Under Bankruptcy Code Section 553 and Internal Revenue Code Section 6402

Bankruptcy Code § 553(a)"sets forth a general rule, with certain exceptions, that any right of setoff [also called an offset] that a creditor possessed prior to the debtor's filing for bankruptcy is not affected by the Bankruptcy Code." Citizens Bank of Md. v. Strumpf , 516 U.S. 16, 20, 116 S.Ct. 286, 133 L.Ed.2d 258 (1995). "Although no federal right of setoff is created by the Bankruptcy Code, 11 U.S.C. § 553(a) provides that, with certain exceptions, whatever right of setoff otherwise exists is preserved in bankruptcy." Id. at 18, 116 S.Ct. 286.

"Courts have construed the language of [§] 553(a) to be 'permissive in nature, rather than mandatory.' " In re Shortt , 277 B.R. 683, 688 (Bankr. N.D. Tex. 2002) (quoting Alexander v. Comm'n, Internal Revenue Service, (In re Alexander ), 225 B.R. 145, 147 (Bankr. W.D. Ky. 1998) ). The bankruptcy court may exercise its equitable discretion to determine whether to apply an offset provision of the Bankruptcy Code. Cumberland Glass Mfg. Co. v. De Witt , 237 U.S. 447, 454-55, 35 S.Ct. 636, 59 L.Ed. 1042 (1915) (discussing § 68a of the Bankruptcy Act of 1898, the offset provision that predated § 553 ).

The Court reviews a bankruptcy court's decision to disallow setoff for abuse of discretion. In re Lambert Oil Co. , 347 B.R. at 521 (citing In re Larbar Corp. , 177 F.3d at 447 ); see also In re Gould , 401 B.R. at 421 ; Melamed v. Lake Cty. Nat. Bank , 727 F.2d 1399, 1404 (6th Cir. 1984). "[A] bankruptcy court necessarily abuses its discretion if it bases its decision on an erroneous view of the law or clearly erroneous factual findings." In re Gould , 401 B.R. at 429. Setoff rights "should be enforced unless 'compelling circumstances' require otherwise." Id. (quoting Camelback Hosp., Inc. v. Buckenmaier (In re Buckenmaier ), 127 B.R. 233, 237 (9th Cir. BAP 1991) (citation omitted in original) ).

Section 553 allows "the use of setoff whe[n] three conditions exist: (1) the creditor holds a claim against the debtor that arose before the commencement of the case; (2) the creditor owes a debt to the debtor that also arose before the commencement of the case; and (3) the claim and debt are mutual." In re Harrison , 383 B.R. 398, 400 (Bankr. W.D. Ky. 2008) (citing 11 U.S.C. § 553(a) ; In re Morristown Lincoln-Mercury, Inc. , 42 B.R. 413, 415 (Bankr. E.D. Tenn. 1984) ).26

*277Internal Revenue Code § 6402 establishes the United States's discretionary right to apply tax overpayments to preexisting tax liabilities, creating the setoff at issue here:

In the case of any overpayment, the Secretary, within the applicable period of limitations, may credit the amount of such overpayment, including any interest allowed thereon, against any liability in respect of an internal revenue tax on the part of the person who made the overpayment and shall, subject to [certain statutory limitations inapplicable here], refund any balance to such person.

26 U.S.C. § 6402(a).

b. Right to Exempt Property Pursuant to Bankruptcy Code Section 522 and Virginia Code Section 34-4

Bankruptcy Code § 522 permits debtors to exempt certain property from the bankruptcy estate, meaning the debtor retains that property outside the reach of creditors. See 11 U.S.C. § 522(b)(1). Section 522(b)(3) allows debtors to exempt, with certain limitations not applicable here, "any property that is exempt under [f]ederal law ... or [s]tate or local law that is applicable on the date of the filing of the petition." 11 U.S.C. § 522(b)(3).

Relevant here, Virginia Code § 34-4 (the Virginia Homestead Exemption) authorizes a debtor to exempt from a creditor's collection "real and personal property, or either, to be selected by the householder, including money and debts due the householder not exceeding $5,000 in value." Va. Code § 34-4.

2. The Debtors' $3,208.00 Tax Overpayment Became Part of the Bankruptcy Estate On May 29, 2014

Before deciding whether the Debtors properly exempted property from the bankruptcy estate under § 522 or the IRS properly performed an offset against property in the bankruptcy estate under § 553, the Court must first address whether the Debtors' $3,208.00 income tax overpayment became part of the bankruptcy estate at all. The Court concludes that it does. First, the Debtors' $3,208.00 overpayment vested as a property interest on December 31, 2013 at midnight. Next, the Debtors possessed that property interest when they filed for bankruptcy, on May 29, 2014. Upon filing for bankruptcy, all of the Debtors' property, including the $3,208.00 overpayment, became part of the bankruptcy estate, and by extension, subject to the provisions of the Bankruptcy Code.27

*278Virginia bankruptcy courts have held that a taxpayer's right to recover his or her tax overpayment arises at midnight on December 31 of the taxable year in which the overpayment occurred. See, e.g. , In re Sexton , 508 B.R. at 662 (The debtor's "right to recover her tax overpayment arose for the 2012 tax year at ... midnight on December 31, 2012."). Absent specific action by the United States regarding the Debtors' overpayment-i.e., absent the United States completing the statutorily authorized offset under § 6402-before midnight on December 31, 2013, the Debtors' property interest in the overpayment vested at that time. See In re Addison , 2016 WL 223771, at *4.

As of December 31, 2013, the Debtors owed the IRS $13,547.10 in unpaid taxes from 2008, 2009, and 2010.28 Also as of that date, the Debtors had paid $10,262.00 in federal taxes for the tax year 2013 through withholding from their earnings. The Debtors' tax liability for 2013 amounted to only $7,054.00, resulting in an overpayment of $3,208.00. As of December 31, 2013, at midnight, the Debtors had a property interest in the $3,208.00 overpayment. In re Sexton , 508 B.R. at 662 ; see also In re Addison , 2016 WL 223771, at *4.

The United States does not challenge that the Debtors had a property interest in their overpayment that vested on midnight of December 31, 2013. Instead, the United States challenges the nature of the property interest.

A 2001 case from the United States Court of Appeals for the Fifth Circuit forms the basis of the argument. In re Luongo , 259 F.3d 323, 335 (5th Cir. 2001). Despite its limited application,29 many courts have followed the 2001 finding that a federal tax refund constitutes only a contingent claim. See, e.g. , In re Gould , 401 B.R. at 425. "Because the prior unpaid tax liability exceeded the amount of the overpayment, the debtor was not entitled to a refund and the tax refund did not become property of the estate." In re Luongo , 259 F.3d at 335. This would mean no money enters the estate because the offset occurs before any "contingent" claim ripened. In re Luongo , and the United States here, relied on two statutory provisions to reach this conclusion.

In re Luongo and its progeny state that, under § 6402, the United States has a right to set off any tax overpayment against any preexisting tax liability owed it. 26 U.S.C. § 6402(a). Section 553 of the Bankruptcy Code generally preserves a creditor's right to offset mutual debts that existed before the petition for bankruptcy. See 11 U.S.C. § 553(a). Taken together, § 6402 created and § 553 preserved, the United States's right to offset the 2013 overpayment to the 2008 and *2792009 tax liabilities. Because the Debtors' preexisting tax liabilities exceeded the 2013 overpayment, the contingent claim was valueless and never became part of the bankruptcy estate. The Court recognizes that a number of non-binding decisions have followed the reasoning in In re Luongo in recent years.30 See, e.g. , In re Gould , 401 B.R. at 425 ; see also In re Shortt , 277 B.R. at 688.

Nonetheless, the Court holds that the $3,208.00 overpayment became part of the bankruptcy estate when the Debtors filed for bankruptcy. In making this finding, the Court adopts the long-standing approach embraced by the majority of courts, including the majority of Virginia bankruptcy decisions that have considered the issue. See In re Sexton , 508 B.R. at 668 ; In re Addison , 533 B.R. at 531. Because the $3,208.00 overpayment became part of the bankruptcy estate, the Bankruptcy Code provisions affect the IRS's ability to offset pursuant to § 6402. Here, the Debtors' authority to exempt the $3,208.00 pursuant to § 522 and Virginia Code § 34-4 overrides the IRS's authority to offset the overpayment with preexisting tax liability pursuant to § 553 and § 6402.31

On May 29, 2014, the Debtors filed for bankruptcy. As of that date, the Debtors had not yet filed their 2013 federal income tax return and the IRS had not applied § 6402 to offset the 2013 overpayment against the preexisting tax debt. Parties disagree about the effect of the bankruptcy filing on the 2013 overpayment given this timeline.

The Debtors' May 29, 2014 bankruptcy filing created a bankruptcy estate, comprised of certain of the debtor's property as specified by statute. See 11 U.S.C. § 541(a)(1) ("The commencement of a case under ... this title creates an estate."). The Bankruptcy Code construes property broadly. "An estate in bankruptcy consists of all the interests in property, legal and equitable, possessed by the debtor at the time of filing, as well as those interests recovered or recoverable through transfer and lien avoidance provisions." Owen v. Owen , 500 U.S. 305, 308, 111 S.Ct. 1833, 114 L.Ed.2d 350 (1991) ; see also In re Sexton , 508 B.R. at 656 (citing 11 U.S.C. § 541(a) ( Section 541 construes property "liberally to include all property interests of the debtor at the time she [or he] files her [or his] petition, irrespective of whether the property interests are legal or equitable, *280tangible or intangible, or vested or contingent.") ).

Because the United States had not yet offset the 2013 tax overpayment against the Debtors' preexisting tax liabilities, the Debtors' overpayment became part of the bankruptcy estate on May 29, 2014.32 11 U.S.C. § 541(a-b) ; In re Sexton , 508 B.R. at 662. Once the $3,208.00 overpayment became part of the bankruptcy estate, the Bankruptcy Code required the United States and the Debtors to comply with its provisions.33 The Debtors properly claimed an exemption to the sum certain of $3,208.00 pursuant to § 522 and Virginia Code § 34-4, shielding the $3,208.00 from creditors. The United States failed to timely object to this claim for an exemption.34

The 2013 overpayment's inclusion in the bankruptcy estate means the United States could not, absent some authorizing statutory language in the Bankruptcy Code, unilaterally take property from the bankruptcy estate and apply it to preexisting debts pursuant to non-bankruptcy law. The United States's next argument-that § 553 provides the necessary statutory *281language to do exactly that-requires the Court to consider the intersection between §§ 522 and 553.

3. Debtors' Rights Under Section 522 Supersede the United States's Rights Under 553

When the Debtors filed for bankruptcy on May 29, 2014, all of the Debtors' property went into the bankruptcy estate, including the $3,208.00 overpayment. The dispute before the Court, and the one that has sparked so much legal debate, arises because both the Debtors and the IRS claim entitlement to the $3,208.00 under different statutory provisions of the Bankruptcy Code.

As the Bankruptcy Court recognized, an apparent conflict exists "between § 553, which unqualifiedly preserves the right of offset, and § 522(c), which provides that property claimed exempt is not liable for prepetition debts." (App. 0041.) Courts have struggled to reconcile §§ 522 and 553, resulting in courts reaching conflicting outcomes. Compare In re Alexander , 225 B.R. at 149 (holding that § 522(c)"would simply have no meaning" if the court allowed § 553 to supersede it), with In re Bourne , 262 B.R. 745, 756 (Bankr. E.D. Tenn. 2001) ("[B]y giving primary effect to the exemption rights of a debtor, the offset right of a creditor is often completely nullified, as would be the result in the instant case. It is just as logical to give effect to both provisions by holding that a debtor may claim an exemption which is valid as to all creditors except one having a right of offset.").

Courts that have determined that § 522 supersedes § 553 often rely on three arguments. See, e.g. , In re Benson , 566 B.R. at 808-11 (discussing this line of cases and their reasoning at length). First, this interpretation prevents nullification of § 522. Id. Second, the Bankruptcy Code's goal of providing debtors with a fresh start overrides the IRS's right to offset. Id. Third, the legislative history suggests Congress intended for § 522 to supersede § 553. Id. A number of courts have also discussed § 553's history as "permissive" rather than mandatory, finding that the application of a permissive provision must yield to debtors' exemption under § 522. See, e.g. , In re Alexander , 225 B.R. at 147.

Courts that have determined that § 553 supersedes § 522 often rely on § 553's "plain language." See, e.g. , In re Benson , 566 B.R. at 813 ("[W]hen the statute's language is plain, the sole function of the courts-at least where the disposition required by the text is not absurd-is to enforce it according to its terms." (quoting Lamie v. United States Trustee , 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004) ) ). This line of cases finds § 553's express language determinative. With certain exceptions not applicable here,

this title does not affect any right of a creditor to offset a mutual debt owing by such creditor to the debtor that arose before the commencement of the case under this title against a claim of such creditor against the debtor that arose before the commencement of the case ....

11 U.S.C. § 553(a) (emphasis added). Courts have also found, in diametric opposition to others, that nullification arguments favor interpreting § 553 to supersede § 522 to prevent nullification of § 553. Again counter to previous decisions, courts have noted that the legislative history of § 522 states nothing about offsets, suggesting Congress did not mean for exemptions under § 522 to affect any right to offset existing outside of bankruptcy. The fact that § 553 follows § 522 in the Bankruptcy Code has led some courts to conclude § 553 supersedes. See, e.g. , Miller v. United States , 422 B.R. 168, 173 (W.D. Wisc. 2010) ("[I]t is [a] long-settled *282rule of statutory construction that where there is irreconcilable conflict between parts of the same act, the last in order of arrangement controls." (internal citations omitted) ).

As the Bankruptcy Court noted, "[p]ersuasive arguments can be made to support either view." (App. 0042.) After reviewing the statutory language, existing case law, and the parties' arguments, the Bankruptcy Court ultimately adopted the reasoning set forth in In re Sexton and In re Addison , holding that "the Debtors' exemption in their 2013 tax refund supersedes the setoff rights of the United States under § 553." (App. 0044.)

The Court reviews the Bankruptcy Court's decision for abuse of discretion. In re Lambert Oil Co., Inc. , 347 B.R. at 521 ; see also In re Gould , 401 B.R. at 421. It would be difficult to find that a court that weighed these competing interests, as the Bankruptcy Court did here, abuses its discretion when ultimately deciding between allowing or disallowing a § 553 offset. Moreover, the Court does not necessarily see the apparent conflict between §§ 522 and 553 as irreconcilable. First, the Bankruptcy Court did not abuse its equitable discretion in holding that the IRS's right to setoff under § 553 appropriately gave way to the Debtors' claimed exemption under § 522. Section 553 is permissive in application, not mandatory. Setoff rights "should be enforced 'unless compelling circumstances' require otherwise." In re Gould , 401 B.R. at 429 (quoting In re Buckenmaier , 127 B.R. at 237 (citation omitted in original) ). The Court concludes that the Bankruptcy Code's authorization of the claimed exemption under § 522 creates a compelling circumstance here. Next, the Court adopts the majority position that interpreting § 522 to supersede § 553 avoids nullifying either provision in its entirety, although the Court recognizes that nothing remains in this particular case for the IRS to offset. Finally, after reviewing the policy rationale throughout existing case law, the Court finds that prioritizing § 522 over § 553 best supports the fundamental goals of the Bankruptcy Code.35 For all of these reasons, the Court will affirm the Bankruptcy Court's holding.

a. Fundamental Principles of Statutory Interpretation

The purpose of statutory interpretation is "to try to determine congressional intent."

*283Dole v. United Steelworkers of America , 494 U.S. 26, 35, 110 S.Ct. 929, 108 L.Ed.2d 23 (1990) (citation omitted). The analysis must "begin, as always, with the language of the statutory text," and "[i]n the absence of a definition from Congress, [the Court] accord[s] words in a statute their ordinary, contemporary, common meaning." United States v. Midgett , 198 F.3d 143, 145-46 (4th Cir. 1999) (internal citation and quotation marks omitted); see also Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship , 507 U.S. 380, 388, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993) ("Courts properly assume, absent sufficient indication to the contrary, that Congress intends the words in its enactments to carry 'their ordinary, contemporary, common meaning.' " (quoting Perrin v. United States , 444 U.S. 37, 42, 100 S.Ct. 311, 62 L.Ed.2d 199 (1979) ) ).

The Court must look to the statute as a whole in determining the meaning of individual words because "the meaning of statutory language, plain or not, depends on context." King v. St. Vincent's Hosp. , 502 U.S. 215, 221, 112 S.Ct. 570, 116 L.Ed.2d 578 (1991) ; see also Dole , 494 U.S. at 35, 110 S.Ct. 929 ("[I]n expounding a statute, we are not guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy." (internal citation and quotation marks omitted) ). And courts should read statutes, "where possible[,] as effecting a 'symmetrical and coherent regulatory scheme.' " BP America Prod. Co. v. Burton , 549 U.S. 84, 99, 127 S.Ct. 638, 166 L.Ed.2d 494 (2006) (quoting FDA v. Brown & Williamson Tobacco Corp. , 529 U.S. 120, 133, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) ).

When two provisions of a statute appear to conflict, the court, if possible, "must interpret the statute to give effect to both provisions." Husted v. A. Philip Randolph Inst. , --- U.S. ----, 138 S.Ct. 1833, 1842, 201 L.Ed.2d 141 (2018) (quoting Ricci v. DeStefano , 557 U.S. 557, 580, 129 S.Ct. 2658, 174 L.Ed.2d 490 (2009) ); see also In re Alexander , 225 B.R. at 149 (quoting In re Miel , 134 B.R. 229, 235 (Bankr. W.D. Mich. 1991) ; In re Monteith , 23 B.R. 601, 603 (Bankr. N.D. Ohio 1982) ("[W]hen two provisions of a statute are in conflict they should be interpreted in such a fashion as to give meaning to the whole.") ). If possible, the court "should favor an interpretation that gives meaning to each statutory provision." Life Techs. Corp. v. Promega Corp. , --- U.S. ----, 137 S.Ct. 734, 740, 197 L.Ed.2d 33 (2017) (emphasis added).

When "the terms of [a] statute are unambiguous on their face, or in light of ordinary principles of statutory interpretation," judicial inquiry normally ends. United States v. Morison , 844 F.2d 1057, 1064 (4th Cir. 1988). But if the "terms of a statutory provision are ambiguous [the Court may] ... consider other evidence to interpret the meaning of the provision, including the legislative history and the provision's heading or title." United States v. Hatcher , 560 F.3d 222, 226 (4th Cir. 2009) (citing Ratzlaf v. United States , 510 U.S. 135, 147-48, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994) ; Bhd. of R.R. Trainmen v. Baltimore & O.R. Co. , 331 U.S. 519, 528-29, 67 S.Ct. 1387, 91 L.Ed. 1646 (1947) ). At base,

[i]f the language is ambiguous, in that it lends itself to more than one reasonable interpretation, [the court's] obligation is to find that interpretation which can most fairly be said to be imbedded in the statute, in the sense of being most harmonious with its scheme and the general purposes that Congress manifested.

United States v. Joshua , 607 F.3d 379, 384 (4th Cir. 2010) (quoting Newport News Shipbuilding & Dry Dock Co. v. Brown , 376 F.3d 245, 248 (4th Cir. 2004) ). A court is "not at liberty to rewrite [a] statute to *284reflect a meaning [it] deem[s] more desirable. Instead, [courts] must give effect to the text Congress enacted." Ali v. Fed. Bureau of Prisons , 552 U.S. 214, 228, 128 S.Ct. 831, 169 L.Ed.2d 680 (2008).

b. Section 553's Permissive Application Does Not Supersede Section 522's Unqualified Language

The Court finds the historical interpretation of § 553 instructive. Historically, allowing setoff under the Bankruptcy Code remained within the equitable discretion of the court presiding over the bankruptcy action, rather than mandatory. Cumberland , 237 U.S. at 455, 35 S.Ct. 636 ; see also In re Alexander , 225 B.R. at 147. The apparent tension between § 553 and § 522 dissipates because § 553's permissive application must yield to § 522's unqualified authorization to Debtors to exempt property pursuant to its requirements. The Court finds that this exemption right, imbedded in the same Code as the permissive application of offsets, creates a compelling circumstance that justifies the disallowance of an offset if the Debtor properly exempts the property prior to the offset being invoked. This interpretation of § 553, rooted in legal history, neither nullifies nor weakens § 553, but instead affirms the longstanding tradition of interpreting offsets as subject to the discretion of the court overseeing the bankruptcy proceeding.36

As early as 1913, the Supreme Court of the United States described the Bankruptcy Code's preservation of setoff rights as "permissive rather than mandatory." Cumberland , 237 U.S. at 455, 35 S.Ct. 636 (discussing the history of setoff rights under § 68a of the Bankruptcy Act of 1898). Section 68a of the Bankruptcy Act of 1898 provided: "in all cases of mutual debts or mutual credits between the estate of a bankrupt and a creditor the account shall be stated and one debt shall be set off against the other, and the balance only shall be allowed or paid." Id. at 454, 35 S.Ct. 636 (citation omitted in original). The Supreme Court in Cumberland , analyzing § 68a, discussed the nature of setoff rights under the Act of 1898 and the Bankruptcy Act of 1867 that predated it. Id. at 454-55, 35 S.Ct. 636. The Cumberland Court held that the decision whether to apply setoff rights or not "is placed within the control of the bankruptcy court, which exercises its discretion in these cases upon the general principles of equity." Id. at 455, 35 S.Ct. 636 (citing Hitchcock v. Rollo , 3 Biss. 276, Fed. Cas. No. 6,535 ).

Section 68a predates the modem § 553. United States on behalf of Internal Revenue Service v. Norton , 717 F.2d 767, 772 (3d Cir. 1983) (citing 11 U.S.C. § 108(a) (1971) and referring to "[§] 68a of the Bankruptcy Act of 1898" as "the predecessor of [§] 553"). Nothing suggests the precise language of the current Bankruptcy *285Code altered the fundamental treatment of offset rights in a bankruptcy proceeding. In fact, compared to § 553, § 68(a)'s

language is less permissive than the modern law in declaring that "one debt shall be set off against the other, and the balance only shall be allowed or paid." 11 U.S.C. § 108(a) (1971) [emphasis added]. Even that statute, which on its face seems to mandate the cancellation of mutual debts, has been interpreted as giving broad discretion to the courts and as recognizing setoff rights only "as established in common law and equitable procedure." [ Cumberland , 237 U.S. at 455, 35 S.Ct. 636 ]. The broad equitable discretion of courts in recognizing setoff rights defined by the common law has been carried over to the Bankruptcy Reform Act of 1978 and in particular to [§] 553, whose language is permissive, not mandatory. "Its application, when properly invoked before a court, rests in the discretion of that court, which exercises such discretion under the general principles of equality." 4 Collier on Bankruptcy ¶ 553.02, at 553-11 (15th ed. 1983).

Id.

Some courts have held that § 553's plain language must prevail over § 522. In re Benson , 566 B.R. at 813. But § 522(c) just as plainly states that "property exempted under this section is not liable during or after the case for any debt of the debtor that arose ... before the commencement of the case." 11 U.S.C. § 522(c) (emphasis added). Section 522(c) lists various exceptions, but tax liabilities such as those here do not appear on the list. Id. Thus, language, "plain or not," must be contextualized. St. Vincent's Hosp. , 502 U.S. at 221, 112 S.Ct. 570. Since at least 1868, federal bankruptcy law in the United States has recognized a creditor's ability to offset mutual debts with a debtor as permissive, rather than mandatory, and as in the discretion of the court.37 Cumberland , 237 U.S. at 455, 35 S.Ct. 636. The Supreme Court interpreted setoff rights this way even when interpreting § 68a, which-as Norton noted-seems more "plain" and even less discretionary than § 553. Given this context, the Court finds any argument relying solely on § 553's express language employs too narrow a view of the statutory language at issue and existing legal precedent.

Because § 553's applicability is permissive, rather than mandatory, and because nothing similarly narrows the scope of § 522, the Court finds § 522's exemption rights superior to § 553's setoff rights. Such an interpretation gives meaning to both sections without nullifying either.

c. Concern Over Potential Nullification Supports Interpreting Section 522 to Supersede Section 553

The Court observes that interpreting § 522 to apply before § 553, and interpreting § 553 as permissive rather than mandatory, gives meaning to both §§ 522 and 553 without nullifying either provision. To the extent tension remains between §§ 522 and 553 in this case, the Court finds that § 553 must yield to § 522.

When two provisions of a statute appear to conflict, the court, if possible, *286"must interpret the statute to give effect to both provisions." Husted , 138 S.Ct. at 1842 (citing Ricci , 557 U.S. at 580, 129 S.Ct. 2658 ). Courts should interpret statutes, when possible, to prevent nullification.

Courts considering nullification have reached contrary conclusions. In In re Alexander , the Bankruptcy Court held that § 522(c)"would simply have no meaning" if the court allowed § 553 to supersede it. 225 B.R. at 149. The Bankruptcy Court in In re Bourne reached the opposite conclusion: "It is just as logical to give effect to both provisions by holding that a debtor may claim an exemption which is valid as to all creditors except one having a right of offset." 262 B.R. at 756. Each position has merit.

After considering the applicable statutory provisions, the Court adopts the majority position that interpreting § 522 to supersede § 553 would give meaning to both provisions in more circumstances than the reverse. Interpreting § 553 to supersede § 522 would seem to risk nullifying § 522 more regularly. This is true because the exemptions allowed in § 522 do not grant debtors unlimited leave to file exemptions. Section 522 limits the debtor's right to exempt property in two ways. First, § 522 constrains exemptions to specific allowable categories of property38 or, as applicable here, to exemptions authorized by state law. See 11 U.S.C. § 522.

In this case, the Debtors invoked § 522 in conjunction with Virginia Code § 34-4, an exemption limited to $5,000.00.39 After carving out the properly exempted $3,208.00 overpayment, § 553 still permits offsets on any remaining property in the bankruptcy estate. Although nothing remains of the Debtors' overpayment to subject to the § 553 offset provision in this particular case, the Court finds that the monetary limits in Virginia Code § 34-4, imputed to § 522 in this case, offers a sound limitation on the application of § 522 and allows § 553 to retain meaning.

Were the Court to allow § 553 to supersede § 522, the likely effect would be to broadly nullify exemptions claimed under § 522. Nothing in § 553 limits the amount a creditor can apply to offsets: here, the Debtors owed the IRS $13,547.10 in unpaid taxes from 2008, 2009, and 2010. The amount greatly exceeds the Debtors' ability to exempt up to $5,000 of an expected tax refund under § 522 and Virginia Code § 34-4.40 Nothing would remain of *287the overpayment for the Debtors to exempt if the IRS could apply § 553 offsets first.41 This creates a compelling circumstance which justifies disallowing the offset in this case.

On the factual record before it, a finding that either provision applies before the other will necessarily appear to "nullify" one provision in this case because of the dollar amounts at issue. Considering the applicable provisions in this case, though, the Court finds that the monetary limits set by § 522 through Virginia Code § 34-4 adequately ensure that § 553 will often retain its force when the United States claims a right to offset tax overpayments against preexisting tax liabilities under § 553 and § 6402. Allowing an exemption under § 522 would limit the application of § 553, but would seemingly rarely nullify its application. Section 553 would still apply when debtors have reached the statutory limits, or when a debtor cannot exempt property under § 522 due to varying state provisions. For these reasons, the Court finds that concerns over nullification justify prioritizing the application of § 522 over § 553's permissive application in this case.

d. Interpreting Section 522 to Supersede Section 553 Supports the Bankruptcy Code's Goal of Giving Debtors a Fresh Start

In addition to § 553's permissive application and evaluation of nullification, the Bankruptcy Code's goal of giving debtors a fresh start creates a compelling circumstance that justifies interpreting § 522 to supersede § 553. The Court must interpret the provisions in a manner "harmonious with [the statutory] scheme and the general purposes that Congress manifested." Joshua , 607 F.3d at 384 (citation omitted). The Supreme Court has recognized two fundamental goals of federal bankruptcy law: giving the debtor a fresh start and ensuring efficiency and fairness among creditors. Lamar, Archer & Cofrin, LLP v. Appling , --- U.S. ----, 138 S.Ct. 1752, 1758, 201 L.Ed.2d 102 (2018) (citing Stellwagen v. Clum , 245 U.S. 605, 617, 38 S.Ct. 215, 62 L.Ed. 507 (1918) ("One of the 'main purpose[s]' of the federal bankruptcy system is 'to aid the unfortunate debtor by giving him a fresh start in life, free from debts, except of a certain character.' ") ); Katchen , 382 U.S. at 328, 86 S.Ct. 467 ("[T]his Court has long recognized that a chief purpose of the bankruptcy laws is 'to *288secure a prompt and effectual administration and settlement of the estate of all bankrupts within a limited period.' ").

Courts finding that § 553 supersedes § 522 have concluded that this reading gives debtors enough of a fresh start. See, e.g. , In re Bourne , 262 B.R. at 756 ("Allowing setoff against exempt property would not undermine the general policy behind the Bankruptcy Code because .... [o]nly creditors who possess a valid setoff right can offset their obligation with a debtor's exempt property."). The court in Bourne stated that the inclusion of "eighteen categories of debts that are excepted from discharge under § 523(a)42 [showed that the] policy [of a fresh start] is not always paramount and is often subordinated to other social and economic concerns and objectives." Id. at 757 (citing Grogan v. Garner , 498 U.S. 279, 287, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991) ). But § 523(a) does not control here. The operative provision here, § 522, unambiguously authorizes the Debtors' claimed exemption. The claimed exemption better comports with the goal of a "fresh start" that the Bankruptcy Code envisions.

Although the Bankruptcy Code balances competing interests and does not always prioritize providing debtors with a "fresh start," nothing in § 522 contemplates limiting claims for exemptions in ways that go beyond the express limitations that Congress specified in § 522. The United States argues that the Bankruptcy Code's "general principle of a 'fresh start' is not enough to override the express language." (Appellant's Br. 48.) This Court agrees, but sees the policy rationale as persuasive when weighed against the findings above.

In conclusion, the Court recognizes that many courts have addressed the tension between §§ 522 and 553 in well-reasoned and thoughtful decisions which nevertheless reach contrary results. Persuasive arguments exist on either side of the debate. After a thorough review of the law, the Court finds that the Bankruptcy Court did not err in its application of the law, and did not abuse its discretion in disallowing the setoff in this case.

The Bankruptcy Court acted within its equitable discretion because compelling circumstances exist to disallow the setoff. First, Section 553's historically permissive application must yield to the unambiguous authorization in § 522. Second, the doctrine of interpreting statutes to prevent nullification favors a conclusion that § 522 applies before § 553, even if that will sometimes, as here, result in leaving no money available for the United States to offset pursuant to § 553. Finally, the Bankruptcy Code's fundamental goal of providing debtors with a fresh start supports the Court's conclusion that compelling circumstances exist in this case that justify disallowing the offset.

The Court finds that the Debtor's $3,208.00 overpayment became part of the bankruptcy estate upon the Debtors' petition for bankruptcy and that the Debtors properly exempted it pursuant to § 522 and Virginia Code § 34-4, without objection from the United States. The Court concludes that the United States inappropriately applied the $3,208.00 overpayment to prepetition tax liabilities in violation of the Debtors' claimed exemption. The Court affirms that § 522 supersedes § 553 in this case and that the United States must release the $3,208.00 to the Debtors.

*289V. Conclusion

For the foregoing reasons, the Court will affirm the Bankruptcy Court's holdings and dismiss this appeal.

An appropriate Order shall issue.