Contrary to the majority opinion, proceeds of a lump sum workers’ compensation settlement were found to be exemptible under section 522(d)(11)(E), to the extent necessary for support of the debtor and his dependents. In addition, a Medicare “set aside” is not property of the estate. Carr v. Arellano (In re Arellano), No. 14-990 (Bankr. M.D. Pa. Jan. 5, 2015). [Read more…] about Lump Sum Workers’ Compensation Settlement Exempt under 522(d)(11)
Bankruptcy Reopened to Add Insurance Proceeds to Estate
The bankruptcy court properly reopened the debtor’s Chapter 7 case to permit the trustee to administer insurance proceeds where the debtor’s interest in the funds pre-dated his bankruptcy even though he did not acquire the funds until post-discharge. Wojcik v. Gold (In re Daher), No. 14-8028 (B.A.P. 6th Cir. Dec. 4, 2014). [Read more…] about Bankruptcy Reopened to Add Insurance Proceeds to Estate
Revocation of Technical Abandonment
Technical abandonment of an estate asset may be revoked if the abandonment was caused by deception by the debtor or inadvertence or mistake on the part of the trustee. Miller v. Reaves (In re Miller), No. 13-1307 (B.A.P. 9th Cir. Dec. 5, 2014). [Read more…] about Revocation of Technical Abandonment
Post-Petition Equity Goes to Debtor upon Conversion
Equity created by payments into a chapter 13 plan belongs to the debtor upon conversion to chapter 7. In re Hodges, No. 13-361 (E.D. Tenn. Sept. 29, 2014). [Read more…] about Post-Petition Equity Goes to Debtor upon Conversion
Trustee Fee Cut Where No Meaningful Distribution
In three consolidated Chapter 7 cases, the Bankruptcy Court, finding that carve-out or short sale agreements did not lead to any meaningful distribution to creditors, reduced the trustee’s fee by 50% of the requested amount. In re Scoggins, No. 12-42158 (Bankr. E.D. Cal. Sept. 8, 2014) (the court approved the fee request in a fourth, business case). [Read more…] about Trustee Fee Cut Where No Meaningful Distribution
Warning: May Cause Munchies and Preclude Bankruptcy Relief
A Colorado Bankruptcy Court found that a debtor whose only non-social security income was generated through the marijuana industry could not avail himself of bankruptcy relief. In re Arenas, — B.R. —-, 2014 WL 4288991 (Bankr. D. Colo. Aug. 28, 2014). The chapter 7 debtors’ income sources were $4,265.16 from Mr. Arenas’ marijuana growing business for which he was licensed under Colorado law, a lease with a marijuana dispensary, and $3,000.00 from his co-debtor wife’s social security disability benefits. Mr. Arenas’ marijuana-related business interests were legal under state law and illegal under the federal Controlled Substances Act. [Read more…] about Warning: May Cause Munchies and Preclude Bankruptcy Relief
Circuit Split on Undistributed Funds at Time of Conversion
Relying on policy and equity considerations, the Fifth Circuit found that funds paid into a plan but not yet distributed at the time of conversion should be distributed to creditors. Viegelahn v. Harris (In re Harris), No. 13-50374 (5th Cir. July 7, 2014) (disagreeing with In re Michael, 699 F.3d 305 (3d Cir. 2012)). [Read more…] about Circuit Split on Undistributed Funds at Time of Conversion
Debtor’s Claim to Equitable Distribution from Spouse’s Pension Property of Estate
Where no Qualified Domestic Relations Order (QDRO) has yet been entered, the debtor’s claim for equitable distribution of her ex-husband’s pension is property of the estate, and the trustee is free to negotiate a settlement agreement with respect to that pension. Walsh v. Urmann (In re Urmann), No. 11-21606 (Bankr. W.D. Pa. Apr. 15, 2014). [Read more…] about Debtor’s Claim to Equitable Distribution from Spouse’s Pension Property of Estate
Trustee May Not Compel Use of Non-Estate Property in Modified Plan
Relying on Eleventh Circuit precedent, a Georgia bankruptcy court found that a debtor could not be compelled to contribute life insurance proceeds received more than 180 days post-petition to his modified chapter 13 plan. In re McAllister, 2014 WL 1624106 (Bankr. N.D. Ga. April 3, 2014). [Read more…] about Trustee May Not Compel Use of Non-Estate Property in Modified Plan
Trustee Stands in Shoes of Creditor upon Avoidance of Lien
In a methodical and thorough opinion, the First Circuit found that “preservation of a lien entitles a bankruptcy estate to the full value of the preserved lien–no more and no less.” Under this principle, the court found that the trustee did not have the power to sell the debtor’s homestead where the trustee avoided the primary lien on the residence but the debtor was current on the mortgage, and her homestead exemption exceeded the value of the property. DeGiacomo v. Traverse (In re Traverse), No. 13-9002 (1st Cir. May 23, 2014). [Read more…] about Trustee Stands in Shoes of Creditor upon Avoidance of Lien