Central District Consumer Bankruptcy Attorney's Association

Hi Jon,
Thank you for pointing that out. The clear wording in that statute says that her severance check postpetition is NOT property of the estate. This is contrary to the understanding of the learned counsel in prior posts in this thread as they would actually practice under this situation.
To me, the language of the statue below is clear that read as a whole postpetition earnings are not property of the estate, although some trustee attorney could read the last clause of the sentence as independent from the first part arguing the severance check is "under the control" of the debtor, even though that clause only is meant to qualify "remains in the possession."
Cases like In re Burgie 239 BR 406 state that postpetition appreciation in Chapter 13 is property of the estate such that the proceeds of sale beyond the exemption amount do not trigger a need more to unsecured creditors. The logic of that case to me seems compelling and practically airtight. Yet one of the Chapter 13 Trustee's at least in LA do not agree with it and I was going to be forced to brief it before a judge. That means that the judge did not know the law already, and in the meantime my client was not willing to risk an interpretation so we settled.
This is one instance where the statute creates substantial cognitive dissonance. Does the language standard in the plan Article VI Revesting of Property abridge 348? That paragraph says in a conversion it "shall vest in accordance with applicable law." 348 is applicable law, right?
Would I be required to disclose her huge stash of cash acquired postpetition? Even if not, with even the risk of the Trustee sniffing out the money, I know if he or she did, the attorneys for the Trustee would be looking for ways to crack the code to get at it.
Steve
(f)
(1)Except as provided in paragraph (2), when a case under chapter 13 of this title is converted to a case under another chapter under this title-
(A)
property of the estate in the converted case shall consist of property of the estate, as of the date of filing of the petition, that remains in the possession of or is under the control of the debtor on the date of conversion;

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Did you look at 348(f)(1)(A).
Sent from my iPhone

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How badly does debtor need the discharge??
It maybe worthwhile to keep paying and live off the funds to make plan payments and then seek a hardship discharge or other modification to lower plan payments.
Very truly yours,
Shai Oved
The Law Offices of Shai Oved
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Email: ssoesq@aol.com
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> On Oct 27, 2017, at 3:23 PM, 'Thomas Tedesco' ttedesco@pacbell.net [cdcbaa] wrote:
>
> I agree with David. If possible, your best alternative might be to do nothing. Wait for the Trustee to move to dismiss the 13, and dont oppose. Assuming the case is dismissed, the Debtor can live off of the severance. Then, if she doesnt find employment, she will probably qualify for a straight 7 (means test). If she does find new (high dollar) employment, consider filing a new 13 at that time.
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> Thomas J. Tedesco, Esq.
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> Sent: Friday, October 27, 2017 2:42 PM
> To: cdcbaa@yahoogroups.com
> Subject: [cdcbaa] Converting Chapter 13 to Chapter 7 with big severance check
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> I filed a higher income debtor case as Chapter 13 two years ago because there was no choice.
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> &nbs p;
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> Debtor just lost her job of 29 years.
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> She got a few weeks pay for each year served in severance. So she getting a lump sum check for almost the equivalent of a years salary. Big bucks.
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> I told her we could convert to 7 if she lost her job, but didnt know shed get the giant check.
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> Now Im aware of case law that says this is not property of the estate, but the analysis can be done differently if a Chapter 7 Trustee learns of the check.
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> My fear is that since postpetition income is property of the Chapter 13 estate a Trustee could argue its an assetnot postpetition incomeif we were to convert.
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> Anyone care to opine whether a Chapter 7 Trustee could reach this money?
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> Is there a UST issue with the means test?
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> Steve
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> Law Offices of Steven B. Lever
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> Steven B. Lever
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> ( Tel. (562) 436-5456 ext. 1
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> ( Fax (562) 485-6886
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> * sblever@leverlaw.com
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> & nbsp; www.leverlaw.com
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www.shaioved.com________________The information contained in this email is intended only for the individual or entity named above and may contain attorney privileged and confidential information. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this communication is strictly prohibited. If you received this communication in error, please immediately notify us by the telephone number above and return any hard copies to us via the postal service.. The Law Offices of Shai Oved is a debt relief agency which helps people file for bankruptcy under the Bankruptcy Code. Shai Oved is a Certified Bankruptcy Law Specialist by The State Bar of California Board of Legal Specialization.Sent from my iPhoneOn Oct 27, 2017, at 3:23 PM, 'Thomas Tedesco' ttedesco@pacbell.net [cdcbaa] <cdcbaa@yahoogroups.com> wrote:


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I agree with David. If possible, your best alternative might be to do
nothing. Wait for the Trustee to move to dismiss the 13, and don't oppose.
Assuming the case is dismissed, the Debtor can live off of the severance.
Then, if she doesn't find employment, she will probably qualify for a
straight 7 (means test). If she does find new (high dollar) employment,
consider filing a new 13 at that time.
Thomas J. Tedesco, Esq.

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Trustee could reach the income for the reason you stated.
David A. Tilem
Certified Bankruptcy Specialist Since 1997
Law Offices of David A. Tilem
206 N. Jackson St., #201
Glendale, CA 91206
Tel: 818-507-6000 * Fax: 818-507-6800
Toll Free: 888-BK PRO 4U (888-257-7648)
www.TilemLaw.com
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I filed a higher income debtor case as Chapter 13 two years ago because there was no choice.
Debtor just lost her job of 29 years.
She got a few weeks' pay for each year served in severance. So she getting a lump sum check for almost the equivalent of a year's salary. Big bucks.
I told her we could convert to 7 if she lost her job, but didn't know she'd get the giant check.
Now I'm aware of case law that says this is not property of the estate, but the analysis can be done differently if a Chapter 7 Trustee learns of the check.
My fear is that since postpetition income is property of the Chapter 13 estate a Trustee could argue it's an asset-not postpetition income-if we were to convert.
Anyone care to opine whether a Chapter 7 Trustee could reach this money?
Is there a UST issue with the means test?
Steve
Law Offices of Steven B. Lever
Steven B. Lever
* Tel. (562) 436-5456 ext. 1
* Fax (562) 485-6886
* sblever@leverlaw.com
www.leverlaw.com
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This Internet e-mail contains confidential information
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be privileged under applicable law. Do not read, copy
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I filed a higher income debtor case as Chapter 13 two years ago because there was no choice.

Debtor just lost her job of 29 years.

She got a few weeks’ pay for each year served in severance. So she getting a lump sum check for almost the equivalent of a year’s salary. Big bucks.

I told her we could convert to 7 if she lost her
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