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
Tag Archive: Property of Estate
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Debtor May Not Exempt Portion of Worker’s Comp Order Earmarked for Medical Care Providers
Posted by NCBRC - March 23rd, 2022
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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
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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
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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 White v. Regions Bank, No. 20-5355 (6th Cir. Sept. 30, 2021) (unpublished).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
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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
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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
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Pawned Vehicle Is Part of Bankruptcy Estate
Posted by NCBRC - September 28th, 2021
Where the maturity date on the vehicle pawn contract had not elapsed before the debtor filed for chapter 13 bankruptcy, she retained ownership of her vehicle, the vehicle became property of the estate, and the loan could be provided for in her chapter 13 plan. TitleMax of Alabama, Inc. v. Womack, — Fed. Appx. —-, 2021 WL 3856036 (11th Cir. Aug. 30, 2021) (case no. 21-11476) (unpublished).
The debtor filed her chapter 13 petition 11 days prior to the maturity date of the pawn contract on her vehicle and she proposed to pay the amount remaining on the loan through the life of the plan under section 1322(b)(2). TitleMax objected to confirmation, arguing that, under the terms of the pawn contract and state law, once the maturity date on the loan expired, the debtor’s choices were limited to redemption of the vehicle or forfeiture of title to TitleMax. The bankruptcy court overruled TitleMax’s objections, and the district court affirmed (see blog post here). Read More
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Tax Credits Exemptible as Public Assistance
Posted by NCBRC - July 13th, 2021
Where the Additional Child Tax Credit and Earned Income Tax Credit were both intended to benefit low-income households and were not limited by taxes owed, they were properly deemed “public assistance” under state exemption laws. In re Moreno, — B.R. —-, 2021 WL 1904189 (Bankr. W.D. Wash. May 11, 2021) (case no. 3:20-bk-42855). Read More
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Modification of Pawn Contract
Posted by NCBRC - July 1st, 2021
Where the debtor entered bankruptcy prior to the maturation date of her pawn contract, she had an ownership interest in her pawned vehicle, the lender was a lienholder, and the pawn contract could be modified under section 1322(b). TitleMax of Alabama, Inc. v. Womack, 2021 WL 1343051 (M.D. Ala. April 9, 2021) (case no. 2:20-cv-416). Read More
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No Deadline for Lien Avoidance Motion
Posted by NCBRC - May 21st, 2021
The debtor was not required to file her motion to avoid a judicial lien while her case was still open, and to assert a homestead exemption in Oklahoma, the debtor need only reside on the property. In re Rose-Brownfield, 2021 WL 809767, No. 18-80342 (Bankr. E.D. Okla. Feb. 22, 2021). Read More
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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.
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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.
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