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9th Circuit Case re: Wells Fargo's holds on personal
This issue is annoying to us all, but in all fairness, what is the bank
supposed to do?
When a case is filed, property of the estate includes all assets wherever
held. Presumably that includes funds in a bank account. Exempt funds are
not exempt until 60 days after the conclusion of the meeting of creditors.
Until then, the funds are property of the estate and subject to the control
over the Trustee and the Court. Technically they should be turned over to
the Trustee per 542(a) or (b). If the bank fails to do so, it is acting at
its own peril. From your client's perspective, using the money in those
accounts jeopardizes the discharge - check out 727(a)(2)(B).
We all "look the other way" for small numbers and funds within the exemption
limits, but please don't try to push something which is working reasonably
well in our favor into something which will ruin the situation for all
future clients. The "technical" law is NOT on our side.
The cited case is NOT helpful. If the bank follows the law, the funds will
be sent to the Trustee - NOT to your clients.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
Dennis McGoldrick
Sent: Tuesday, July 06, 2010 12:14 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] 9th Circuit Case re: Wells Fargo's holds on personal
bank accounts postBK [1 Attachment]
[Attachment(s) from Dennis McGoldrick included below]
Hello everyone:
In re Mwangi held:
"The bankruptcy court erred when it determined that Wells
Fargo did not exercise control over property of the estate when
it placed its administrative freeze on Appellants account funds.
Appellants have standing to seek sanctions against Wells Fargo
pursuant to 362(k) for willful violation of the stay with
respect to their interest in estate property."
It was a pain, because the BAP has not published the opinion yet, but I used
pacer to find the opinion and it is attached.
The opinion is not a strong as we would all like, because it skirts the
issue a little. Since exempt property is subject to a sixty day objection
period, it holds the account funds are property of the estate. Wells kept
the property after the 60 days, so they got smacked.
Wells will now have to decide if they are just going to mail the trustee a
check in each case, or just stop the freezes.
dennis
The post was migrated from Yahoo.