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Chapter 7 converted to Chapter 13
Dear Nancy,
The Chapter 7 Trustee may find it helpful to review the concept of community property. In the absence of a prenuptial agreement, community property includes all assets other than those inherited by a spouse and those a spouse had on the wedding day. In particular, wages and anything purchased with wages are community property. Community property is available to pay the debts of either spouse, and is therefore available to make either spouse's plan payments. It is for this reason that 524(a)(3) was included in the Code. Thus, if the community income sufficed to propose a feasible plan, and the 109(e) limits were not implicated, the debtor is eligible for Chapter 13 relief. Of course, if there are 1328(f) limitations the debtor might be ineligible for a discharge, but discharge ineligibility plays no role in filing eligibility.
You're facing Chapter 7 Trustee cupidity, nothing more, nothing less.
Nick
Nicholas Gebelt
Nicholas Gebelt, Ph.D., J.D.
Attorney at Law
Certified Bankruptcy Law Specialist
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Debtors are (and were) eligible for chapter 13 based on those facts. If
it's a Riverside case and a certain judge is assigned however .... expect
the unexpected.
On Fri, Aug 9, 2013 at 4:53 PM, nancybonaccorso wrote:
> **
>
>
> We recently substituted into a chapter 7 where the former attorney had not
> listed all of debtors' assets. We filed a motion to convert and the chapter
> 7 trustee opposed on the basis that the debtors filed in bad faith.
>
> At the hearing I requested an evidentiary hearing which the Court granted.
> However, the Court stated that based on In re Scovis, In re Slack and 11
> U.S.C. Sec. 109(e), debtors were ineligible for chapter 13 on the date of
> the filing of the chapter 7 because of debtors' income. On the day of
> filing the chapter 7, debtor husband was receiving unemployment ($1,950/mo)
> and debtor wife was fully employed as a teacher. At the time of the motion
> to convert, debtor husband obtained employment which pays more than his
> unemployment by $500/ month and debtor wife continues to work as a teacher.
>
> 11 U.S.C. Sec. 101(30)which states that the term "individual with regular
> income" means individual whose income is sufficiently stable and regular to
> enable such individual to make payments under a chapter 13 plan. I
> understand that debtor husband might not be an "individual with regular
> income" on the date of the chapter 7 filing but debtors' income included
> his fully employed wife. Based on her employment alone, aren't they
> eligible for chapter 13?
>
> The chapter 7 trustee's attorney stated (off the record) that because of
> debtor husband's unemployment status at the time of the chapter 7 filing,
> debtors are ineligible for chapter 13.
>
> What is even stranger in this particular case is that on the date of the
> original filing, debtors' Schedule J shows excess income in the amount of
> $1,285. I believe the chapter 7 trustee's attorney is trying to argue that
> because the amount of the unemployment received during that time was more
> than the amount of the excess income, debtors are still ineligible for
> chapter 13.
>
> Am I mistaken in thinking that this reasoning is completely flawed?
>
> Please let me know your thoughts.
>
> Thank you,
> Nancy B. Clark
> Borowitz & Clark, LLP
> 100 N. Barranca Avenue, Suite 250
> West Covina, CA 91791
> Office: (626) 332-8600
> Fax: (626) 332-8644
>
>
>
Kirk Brennan
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Debtors are (and were) eligible for chapter 13 based on those facts. If it's a Riverside case and a certain judge is assigned however .... expect the unexpected.
On Fri, Aug 9, 2013 at 4:53 PM, nancybonaccorso <nclark@blclaw.com> wrote:
We recently substituted into a chapter 7 where the former attorney had not listed all of debtors' assets. We filed a motion to convert and the chapter 7 trustee opposed on the basis that the debtors filed in bad faith.
At the hearing I requested an evidentiary hearing which the Court granted. However, the Court stated that based on In re Scovis, In re Slack and 11 U.S.C. Sec. 109(e), debtors were ineligible for chapter 13 on the date of the filing of the chapter 7 because of debtors' income. On the day of filing the chapter 7, debtor husband was receiving unemployment ($1,950/mo) and debtor wife was fully employed as a teacher. At the time of the motion to convert, debtor husband obtained employment which pays more than his unemployment by $500/ month and debtor wife continues to work as a teacher.
11 U.S.C. Sec. 101(30)which states that the term "individual with regular income" means individual whose income is sufficiently stable and regular to enable such individual to make payments under a chapter 13 plan. I understand that debtor husband might not be an "individual with regular income" on the date of the chapter 7 filing but debtors' income included his fully employed wife. Based on her employment alone, aren't they eligible for chapter 13?
The chapter 7 trustee's attorney stated (off the record) that because of debtor husband's unemployment status at the time of the chapter 7 filing, debtors are ineligible for chapter 13.
What is even stranger in this particular case is that on the date of the original filing, debtors' Schedule J shows excess income in the amount of $1,285. I believe the chapter 7 trustee's attorney is trying to argue that because the amount of the unemployment received during that time was more than the amount of the excess income, debtors are still ineligible for chapter 13.
Am I mistaken in thinking that this reasoning is completely flawed?
Please let me know your thoughts.
Thank you,
Nancy B. Clark
Borowitz & Clark, LLP
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
Office:
The post was migrated from Yahoo.
Flawed. Spouse's income is the other spouse's income, too. If necessary
the spouse can simply give it to the husband. I believe I've run across
cases dealing with the income of the nonfiling spouse. I bet there's some
juicy asset or pot of cash the Chapter 7 trustee is eyeing. That's all.
Giovanni Orantes, Esq.
Certified Bankruptcy Specialist*
Orantes Law Firm, P.C.
3435 Wilshire Blvd. Suite 2920
Los Angeles, CA 90010
Tel: (213) 389-4362
Fax: (877) 789-5776
e-mail: go@gobklaw.com
website: www.gobklaw.com
*Board Certified - Business Bankruptcy Law - American Board of Certification
*Board Certified - Consumer Bankruptcy Law - American Board of Certification
The post was migrated from Yahoo.
We recently substituted into a chapter 7 where the former attorney had not listed all of debtors' assets. We filed a motion to convert and the chapter 7 trustee opposed on the basis that the debtors filed in bad faith.
At the hearing I requested an evidentiary hearing which the Court granted. However, the Court stated that based on In re Scovis, In re Slack and 11 U.S.C. Sec. 109(e), debtors were ineligible for chapter 13 on the date of the filing of the chapter 7 because of debtors' income. On the day of filing the chapter 7, debtor husband was receiving unemployment ($1,950/mo) and debtor wife was fully employed as a teacher. At the time of the motion to convert, debtor husband obtained employment which pays more than his unemployment by $500/ month and debtor wife continues to work as a teacher.
11 U.S.C. Sec. 101(30)which states that the term "individual with regular income" means individual whose income is sufficiently stable and regular to enable such individual to make payments under a chapter 13 plan. I understand that debtor husband might not be an "individual with regular income" on the date of the chapter 7 filing but debtors' income included his fully employed wife. Based on her employment alone, aren't they eligible for chapter 13?
The chapter 7 trustee's attorney stated (off the record) that because of debtor husband's unemployment status at the time of the chapter 7 filing, debtors are ineligible for chapter 13.
What is even stranger in this particular case is that on the date of the original filing, debtors' Schedule J shows excess income in the amount of $1,285. I believe the chapter 7 trustee's attorney is trying to argue that because the amount of the unemployment received during that time was more than the amount of the excess income, debtors are still ineligible for chapter 13.
Am I mistaken in thinking that this reasoning is completely flawed?
Please let me know your thoughts.
Thank you,
Nancy B. Clark
Borowitz & Clark, LLP
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
Office: (626) 332-8600
Fax: (626) 332-8644
The post was migrated from Yahoo.