In the absence of bad faith, post-petition appreciation does not enter the Chapter 7 estate upon conversion from Chapter 13. Rodriguez v. Barrera (In re Barrera), No. 20-1376 (10th Cir. Jan. 9, 2022). NCBRC filed an amicus brief on behalf of the NACBA membership in support of the debtor in this case.
When the debtors filed for Chapter 13 bankruptcy, the value of their home was less than the sum of the liens plus their homestead exemption. However, the value of their home appreciated such that, when they sold it during their bankruptcy, the sale proceeds exceeded the liens and exemptions by $140,251. They then converted to Chapter 7, and the trustee moved for turnover of the non-exempt portion of the proceeds. The bankruptcy court denied the motion, and the BAP affirmed. [Read more…] about Post-Petition Appreciation Not Part of Converted Estate