The “estate termination theory” allows the debtors to retain proceeds from the post-confirmation sale of prepetition property, where the value of the property appreciated and was sold after the property had revested in the debtors. In re Klein, No. 17-19106 (Bankr. D. Colo. Aug. 23, 2022). Read More
Tag Archive: Property of Estate
-
Post-petition Appreciation Not Part of Chapter 13 Estate
Posted by NCBRC - November 11th, 2022
-
Wrongful Possession Does Not Confer Property Interest
Posted by NCBRC - September 13th, 2022
“[A] debtor’s mere possession of a property, without a good-faith claim to it, does not save an installment contract for § 1322(c)(1) relief.” In re Peralta, No. 20-3496 (3rd Cir. Sept. 7, 2022).
The debtor bought his house on an installment contract rather than through a traditional mortgage. After he breached the contract, he and the seller entered into a new agreement where the debtor agreed to resume regular payments but if he defaulted again, the seller would exercise its right to get a judgment for possession, and the debtor would vacate the house. The agreement specified that a second breach would “extinguish[ ] any and all rights, liens, and/or interest” the debtor had in the house. Read More
-
$1.7 Million Retirement Accounts Not Part of Estate
Posted by NCBRC - September 6th, 2022
The court held its nose and slogged through the trustee’s lengthy complaint riddled with errors and legal misconceptions to find that the debtor’s retirement accounts totaling approximately $1.7 million were not property of the bankruptcy estate. McDonnell v. Gilbert (In re Gilbert), No. 21-12725, Adv. Proc. No. 22-1005 (Bankr. D. N.J. Aug. 23, 2022). Read More
-
$5 Million Domestic Support Debt and Offshore Trust
Posted by NCBRC - August 9th, 2022
The bankruptcy court was not bound by the state court’s finding that the debtor’s ex-wife did not violate the stay when she had the debtor arrested for failure to pay domestic support out of an offshore trust he claimed no ownership interest in, but the court found the issues more appropriate for summary judgment and granted the debtor’s motion to vacate its earlier order of dismissal. Foufas v. Foufas, No. 20-22967, Adv. Proc. No. 22-1013 (Bankr. S.D. Fla. June 17, 2022). Read More
-
Debtor May Not Exempt Portion of Worker’s Comp Order Earmarked for Medical Care Providers
Posted by NCBRC - March 23rd, 2022
The chapter 7 debtor was not entitled to exempt the portion of a settlement he negotiated with his employer and worker’s compensation insurer where that amount was in a trust for the benefit of his medical care providers and, therefore, did not become part of the bankruptcy estate. Ryan v. Branko PRPA MD, LLC, No.21-449 (E.D. Wisc. March 2, 2022). Read More
-
Split on Chapter 13 Trustee Retention of Fees in Unconfirmed Cases Deepens
Posted by NCBRC - February 14th, 2022
Deepening the split among lower courts, in McCallister v. Evans, et al., No. 20-112 (D. Ida. Feb. 8, 2022). Chief Judge Nye of the District of Idaho, held that the chapter 13 trustee is entitled to retain her commission on funds collected from the debtors even though the debtors’ case was dismissed prior to confirmation. While recognizing the split of authority, the court followed in the footsteps of the Ninth Circuit Bankruptcy Appellate Panel in favoring the language of 28 U.S.C. § 586(e)(2) and dodging the clear textual differences between section 1326(a)(2)—applicable in chapter 13—and section 1226(a)(2)—applicable in chapter 12. Read More
-
Estate Cannot Continue To Collect Trust Distributions after Debtor Dies
Posted by NCBRC - January 26th, 2022
The bankruptcy court erred in finding that the portion of the debtor’s interest in ongoing Trust distributions that were part of the bankruptcy estate would continue to enter the bankruptcy estate after the debtor died and the Trust was distributed to his children. In re Rens, — B.R. —-, 2021 WL 5049829 (B.A.P. 9th Cir. Oct. 29, 2021) (case no. 20-1131). Read More
-
Refund of Mortgage Double Payment to Trustee
Posted by NCBRC - November 9th, 2021
An overpayment resulting from the debtor’s mistakenly making mortgage payments while the chapter 13 trustee was making the same payments through the plan was properly remitted to the trustee for distribution rather than being returned to the debtor. White v. Regions Bank, No. 20-5355 (6th Cir. Sept. 30, 2021) (unpublished). Read More
-
Appreciation Is Part of Converted Chapter 7 Estate
Posted by NCBRC - October 29th, 2021
Post-petition appreciation in a chapter 13 case becomes part of the chapter 7 estate upon conversion. In re Castleman, No. 19-12233 (Bankr. W. D. Wash. June 4, 2021).
When the debtors filed for chapter 13 bankruptcy their residence was valued at $500,000. At the time of conversion of the case to chapter 7, the property value had appreciated to $700,000. The trustee moved to include the appreciation in the chapter 7 bankruptcy estate and the debtors opposed the motion. Read More
-
Property Appreciation Belongs to Ch 13 Debtor
Posted by NCBRC - September 30th, 2021
Under the “estate replenishment” theory, post-confirmation appreciation on the chapter 13 debtor’s residence belongs to the debtor. In re Larzelere, 2021 WL 3745428 (Bankr. D. N.J. Aug. 24, 2021) (case no. 1:17-bk-34411).
When the debtor filed for chapter 7 bankruptcy on December 4, 2017, his residential property was valued at $219,000 and was encumbered by a $172,877 mortgage. He converted to chapter 13 and confirmed a less-than-100% plan, which he committed to paying out of future earnings. Three years into the plan, the debtor moved the court for an order allowing him to sell his property for $348,000, use the proceeds to make all of the remaining plan payments at once, and retain the remaining proceeds. The trustee objected. She argued that, as an above median debtor, the debtor cannot complete his plan in fewer than 60 months unless he pays 100 percent of the claims. She further argued that the proceeds from the sale of the house are property of the estate under section 1306. Read More
-
Request Assistance
Request assistance with a case.
-
Help NCBRC
NCBRC needs your support to protect the rights of consumer bankruptcy debtors. The most effective way to support NCBRC is with a direct donation.
There are many other ways to give to NRBRC:
iGive.com: When you purchase items at over 1,400 online stores, a percentage of your purchase will be donated to NCBRC. Stores include Macy’s, Melissa and Doug, Bed Bath & Beyond, Nike, Petsmart, and more. Shop and Give today!
-
HAVEN Act Guide
The Honoring American Veterans in Extreme Need Act of 2019 (“HAVEN Act”) excludes certain benefits paid to veterans or their family members from the definition of current monthly income (“CMI”) found in the Bankruptcy Code. The HAVEN Act amends § 101(10A) of the Bankruptcy Code and supplements the 2005 amendments to the Code that excluded other government benefits, such as social security income.
This Guide provides an overview of the HAVEN Act identifies benefits that are excluded, and answers frequently asked questions.
-
Keep up with NCBRC
Thank you!
Thank you to the following organizations without whose support our work would not be possible.
American College of Bankruptcy
The American College of Bankruptcy is an honorary public service association of bankruptcy and insolvency professionals who are invited to join as Fellows based on a proven record of the highest standards of professionalism plus service to the profession and their communities. Together with its affiliated Foundation, the College is the largest financial supporter of bankruptcy and insolvency-related pro bono legal service programs in the United States.NACBA
The only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy. Formed in 1992, NACBA has more than 3,000 members located in all 50 states and Puerto Rico.O. Max Gardner Foundation, Inc.
Visit NACBA.org
The O. Max Gardner Foundation, Inc. provides financial support to institutions devoted to charitable, scientific, literary or educational purposes. NCBRC has been a recipient of grant awards from the foundation.