July 31, 2025 — In Humphrey v. Christopher, No. 24-1854, the U.S. Court of Appeals for the Eighth Circuit sidestepped a key question in consumer bankruptcy law: whether a debtor’s defensive appellate rights are part of the bankruptcy estate and may be sold by the trustee. Instead, the court resolved the case on procedural grounds, holding that because the debtor failed to obtain a stay of the bankruptcy court’s sale order, review of that order was statutorily moot under 11 U.S.C. § 363(m). While declining to reach the merits, the decision underscores the critical importance of seeking a stay pending appeal when challenging sales of purported estate assets.
[Read more…] about Eighth Circuit Ducks Issue Whether Defensive Appellate Rights Are Estate Property, but Highlights Necessity of Staying an Order Granting SaleCarve-Out Agreement Creates Exemptible Equity
The debtor was entitled to obtain the benefit of her homestead exemption even though, at the time she filed her petition, she had no equity in the property, where “the secured creditor’s agreement to accept less money upon a sale creates equity in the home where none existed before.” Stark v. Pryor (In re Stark), No. 20-4766 (E.D.N.Y. June 28, 2022). [Read more…] about Carve-Out Agreement Creates Exemptible Equity
California Clarifies Marital Property Presumptions
Relying on the answer to a certified question propounded to the California Supreme Court regarding presumptions attached to marital property, the Ninth Circuit found that one of two properties owned by the individual debtor and his wife was community property despite its being designated a joint tenancy. Brace v. Speier (In re Brace), No. 17-60032 (9th Cir. Nov. 9, 2020).
The debtor and his wife acquired the San Bernardino property sometime after they married in 1972, and the Redlands property in 1977 or 1978. When the husband filed for chapter 7 bankruptcy, the trustee sought to sell both properties and distribute the proceeds to the debtor’s creditors. Even though both deeds characterized the properties as joint tenancies, the bankruptcy court found that, under the California Family Code, they were community property and could be sold to satisfy the husband’s debts. The BAP affirmed. In re Brace, 566 B.R. 13 (B.A.P. 9th Cir. 2017). [Read more…] about California Clarifies Marital Property Presumptions