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CH 11 question
I would be surprised if anyone knew the answer to the question of what
happens when homestead proceeds are used during the course of a Chapter 11
to pay for Court approved fees but then lose their character as exempt
proceeds. The issue has not been litigated mostly because the DIP stays in
possession and the case is finished.
I look at the problem in a slightly different way. Suppose Debtor
liquidates house and puts the $100k in his bank account for 7 months. The
100k becomes property of the Estate and Debtor can do whatever he wants
with it subject to 363 restrictions. Suppose case is later converted to
Chapter 7.
Do Trustees then go after court approved payments to brokers, etc for those
payments? I am under the impression they don't, but I don't know. The risk
should be the same in the two scenarios.
The key is to obtain Court approval for payment of those fees.
Sincerely,
*Michael Avanesian, Esq. *
Simon Resnik Hayes, LLP
15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403
Tel: 818.783.6251 | Cel: 818.817.1725
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On Wed, May 6, 2015 at 7:44 AM, Holly Roark hollyroark22@gmail.com [cdcbaa]
wrote:
>
>
> If Debtor is selling his property and there is not enough equity to pay
> broker and attorney in full, can debtor pay these costs from his homestead
> exemption, and is that risky? I understand Debtors are supposed to reinvest
> their homestead in 6 months or they can lose it if the case got converted
> to Chapter 7. If debtor pays people's fees out of his homestead, could the
> chapter 7 trustee seek to recover those funds? If case does not get
> converted to chapter 7, is all okay with paying fees this way?
>
>
> Holly Roark
> Certified Bankruptcy Specialist*
> *and Sports Lawyer*
> holly@roarklawoffices.com **primary email address**
> www.roarklawoffices.com
> Central District of California - Consumer Bankruptcy Attorney
> 1875 Century Park East, Suite 600 Los Angeles, CA 90067
> T (310) 553-2600; F (310) 553-2601
>
> *By State Bar of California Board of Legal Specialization
>
> **Counsel for Chapter 13 Trustee Kathleen A. McCallister (Idaho) T (208)
> 922-5100
>
>
>
I would be surprised if anyone knew the answer to the question of what happens when homestead proceeds are used during the course of a Chapter 11 to pay for Court approved fees but then lose their character as exempt proceeds. The issue has not been litigated mostly because the DIP stays in possession and the case is finished.I look at the problem in a slightly different way. Suppose Debtor liquidates house and puts the $100k in his bank account for 7 months. The 100k becomes property of the Estate and Debtor can do whatever he wants with it subject to 363 restrictions. Suppose case is later converted to Chapter 7.Do Trustees then go after court approved payments to brokers, etc for those payments? I am under the impression they don't, but I don't know. The risk should be the same in the two scenarios.The key is to obtain Court approval for payment of those fees.
The post was migrated from Yahoo.
If Debtor is selling his property and there is not enough equity to pay
broker and attorney in full, can debtor pay these costs from his homestead
exemption, and is that risky? I understand Debtors are supposed to reinvest
their homestead in 6 months or they can lose it if the case got converted
to Chapter 7. If debtor pays people's fees out of his homestead, could the
chapter 7 trustee seek to recover those funds? If case does not get
converted to chapter 7, is all okay with paying fees this way?
Holly Roark
Certified Bankruptcy Specialist*
*and Sports Lawyer*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
Central District of California - Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067
T (310) 553-2600; F (310) 553-2601
*By State Bar of California Board of Legal Specialization
**Counsel for Chapter 13 Trustee Kathleen A. McCallister (Idaho) T (208)
922-5100
If Debtor is selling his property and there is not enough equity to pay broker and attorney in full, can debtor pay these costs from his homestead exemption, and is that risky? I understand Debtors are supposed to reinvest their homestead in 6 months or they can lose it if the case got converted to Chapter 7. If debtor pays people's fees out of his homestead, could the chapter 7 trustee seek to recover those funds? If case does not get converted to chapter 7, is all okay with paying fees this way?
The post was migrated from Yahoo.