When a Chapter 13 case is dismissed, funds held by the trustee must be returned to the debtor. So said the district court in Williams v. Marshall (In re Williams), No. 13-2326 (N.D. Ill. Apr. 11, 2014). [Read more…] about Undistributed Funds Returned to Debtor upon Dismissal
Property of Estate Includes Inheritance More Than 180 Days Post-Petition
The Chapter 13 debtor inherited $30,000.00 from his mother more than 180 days post-petition, but before the close of his Chapter 13 case. When the debtor failed to turn over the inheritance for the benefit of creditors, the trustee moved to dismiss. Finding that Section 1306(a)(1) brought the inheritance into the estate, the court granted the motion. The BAP for the Ninth Circuit agreed. Dale v. Maney (In re Dale), No. 13-1251 (B.A.P. 9th Cir. Feb. 5, 2014). [Read more…] about Property of Estate Includes Inheritance More Than 180 Days Post-Petition
SSA Setoff Not Recoverable under Section 553(b)
After paying disability (SSDI) benefits to the debtor, Damas, for several years, the SSA determined that it had overpaid him by $13,478. It therefore began deducting $605 from his monthly benefit. When Damas filed for bankruptcy, he sought to recover the amount the SSA had collected toward this debt during the ninety days preceding the petition date. The court granted summary judgment in favor of the SSA. Damas v. U.S.A., No. 12-15313, A.P. 12-1331 (Bankr. D. Mass. Jan. 6, 2014). [Read more…] about SSA Setoff Not Recoverable under Section 553(b)
Court Allows Sale of Property in Joint Tenancy with Non-Debtors
When it comes to estate planning (and carpentry), “use the right tool for the job.” This was the ultimate message in Soule v. Gragg (In re Harrison), No. 11-13580, A.P. No. 13-1010 (Bankr. N.D. Okla. Jan. 23, 2014). [Read more…] about Court Allows Sale of Property in Joint Tenancy with Non-Debtors
Charitable Contribution in Excess of 15% Avoidable in its Entirety
In a sharply circumscribed opinion, the Tenth Circuit found that the trustee could avoid in their entirety charitable contributions over 15% of the debtors’ gross annual income. Wadsworth v. The Word of Life Christian Center (In re McGough), No. 12-1142 (Dec. 16, 2013). [Read more…] about Charitable Contribution in Excess of 15% Avoidable in its Entirety
Fifth Circuit Finds Defensive Appellate Rights Property of Estate
In a case of first impression, the Fifth Circuit Court of Appeals found that a chapter 7 debtor’s right to appeal a state court judgment against him was property of the estate that could be sold by the trustee. Croft v. Lowry (In re Croft), No. 13-50020 (Dec. 10, 2013). [Read more…] about Fifth Circuit Finds Defensive Appellate Rights Property of Estate
Absolute Assignment of Rents Precludes Turnover
This case centered on whether rent collected by the debtors becomes part of the bankruptcy estate even though the right to collect the rents had been absolutely assigned to their lender PHH Mortgage (“PHH” or “assignee”). Relying on In re Jason Realty, 59 F.3d 423 (3d Cir. 1995), the bankruptcy court found that PHH, as assignee, was the owner of the right to collect rents and, therefore, the debtor had no ownership interest to augment the bankruptcy estate. The district court affirmed. In re Cordova, No. 13-810 (D. N.J. Oct. 22, 2013). [Read more…] about Absolute Assignment of Rents Precludes Turnover
Inheritance Received more than 180 Days Post-Petition Part of Chapter 13 Estate
The Fourth Circuit found that an inheritance acquired after section 541(a)(5)’s 180 day look-back period but prior to termination of the chapter 13 case, becomes part of the bankruptcy estate under section 1306(a)(1). Carroll v. Logan (In re Carroll), No. 13-1024 (Oct. 28, 2013). [Read more…] about Inheritance Received more than 180 Days Post-Petition Part of Chapter 13 Estate
SunTrust Consent Order Payment Not Part of Estate
After the chapter 7 debtors received their discharge they disclosed to the trustee that they had received funds as a result of a settlement agreement between the Federal Reserve and SunTrust Mortgages. They moved to reopen their bankruptcy and amend their schedules to reflect the payment. They also sought to exempt the payment as related to a “potential wrongful foreclosure claims against SunTrust Mortgage” under applicable state exemption laws. The trustee objected to the exemption and sought to administer the payment as part of the bankruptcy estate.
The issue turned on whether the payment was a “legal or equitable interest” of the debtors that existed as of the commencement of the case. The bankruptcy court found that it was not. In re Vanwart, No. 13-515 (Bankr. E.D. N.C. Aug. 27, 2013).
[Read more…] about SunTrust Consent Order Payment Not Part of Estate
Proceeds of Settlement for Stay Violation Part of Bankruptcy Estate
The district court for the southern district of Georgia held that settlement proceeds from post-confirmation violation of the automatic stay under section 362(k) are property of the chapter 13 estate under section 1306(a)(1). Crouser v. BAC Home Loans Servicing, No. 12-156 (S.D. Ga. Aug. 21, 2013). [Read more…] about Proceeds of Settlement for Stay Violation Part of Bankruptcy Estate