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Digest Number 17
Hi Silvio:
Sale proceeds are only exempt if the homeowner had a declared (i.e.
recorded) homestead. Your fact pattern does not mention this.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State Bar of
CA Bd of Legal Specialization.
Sent: Tuesday, March 30, 2004 9:27 AM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Digest Number 17
I am defending a preference/fraudulent transfer brought by a Chapter 7
trustee.
I represent the debtor's parents. About a month before he filed (his
plans
were unknown to them), they purchased his condo from him (it was in
foreclosure; they paid fair market value). In turn the debtor used the
net
sales proceeds (about $30K) to repay an earlier obligation to the
parents. In effect, he transferred exempt property to them in
satisfaction
of an antecedent debt. When he filed, he did not claim the proceeds as
exempt property.
I am thinking of having him reopen his case and amend his schedules to
show
the equity proceeds as exempt property.
Any other thoughts/suggestions on how to approach this case? It seems
to
me that the underlying purpose of the preference statute is to avoid
diminution of the debtor's estate by payments to a single creditor, but
where the property would have been exempt that purpose does not apply.
I welcome the collegiality present on this list.
Silvio Nardoni
Glendale, CA
Yahoo! Groups Links
The post was migrated from Yahoo.
My understanding is that the CA Homestead laws only allow exemption
of sale proceeds of a primary residence for a period of 6 months from
the date of the sale. The purpose of the 6-month period is to allow
the seller enough time to reinvest the proceeds in another home and
claim that as the new homestead. Apparently, this is a closed case
and the proceeds were not reinvested within the allowable period to
purchase another home as they were used to pay back the parents.
Thus, I don't think the proceeds can be claimed as exempt. Lastly,
was the sale of the property even disclosed on the debtor's petition
to begin with? I think there is also case law saying that the
discovery by the Trustee of undisclosed or concealed assets precludes
exemption of the same assets by the Debtor. Not sure, need to do
further research.
Ray Bulaon
The post was migrated from Yahoo.
charset="ISO-8859-1"
My understanding is that the CA Homestead laws only allow exemption of sale
proceeds of a primary residence for 6 months from the date of the sale. The
purpose of the 6-month period is to allow the seller enough time to reinvest
the proceeds in another home and claim that as the new homestead.
Apparently, this is a closed case and the proceeds were not reinvested
within the allowable period to purchase another home as they were used to
pay back the parents. Thus, I don't think the proceeds can be claimed as
exempt. Lastly, was the sale of the property even disclosed on the debtor's
petition to begin with? I think there is also case law saying that the
discovery by the Trustee of undisclosed or concealed assets precludes
exemption of the same assets by the Debtor. Not sure, need to do further
research.
Ray Bulaon
Sent: Tuesday, March 30, 2004 9:27 AM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Digest Number 17
I am defending a preference/fraudulent transfer brought by a Chapter 7
trustee.
I represent the debtor's parents. About a month before he filed (his plans
were unknown to them), they purchased his condo from him (it was in
foreclosure; they paid fair market value). In turn the debtor used the net
sales proceeds (about $30K) to repay an earlier obligation to the
parents. In effect, he transferred exempt property to them in satisfaction
of an antecedent debt. When he filed, he did not claim the proceeds as
exempt property.
I am thinking of having him reopen his case and amend his schedules to show
the equity proceeds as exempt property.
Any other thoughts/suggestions on how to approach this case? It seems to
me that the underlying purpose of the preference statute is to avoid
diminution of the debtor's estate by payments to a single creditor, but
where the property would have been exempt that purpose does not apply.
I welcome the collegiality present on this list.
Silvio Nardoni
Glendale, CA
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The post was migrated from Yahoo.
I am defending a preference/fraudulent transfer brought by a Chapter 7 trustee.
I represent the debtor's parents. About a month before he filed (his plans
were unknown to them), they purchased his condo from him (it was in
foreclosure; they paid fair market value). In turn the debtor used the net
sales proceeds (about $30K) to repay an earlier obligation to the
parents. In effect, he transferred exempt property to them in satisfaction
of an antecedent debt. When he filed, he did not claim the proceeds as
exempt property.
I am thinking of having him reopen his case and amend his schedules to show
the equity proceeds as exempt property.
Any other thoughts/suggestions on how to approach this case? It seems to
me that the underlying purpose of the preference statute is to avoid
diminution of the debtor's estate by payments to a single creditor, but
where the property would have been exempt that purpose does not apply.
I welcome the collegiality present on this list.
Silvio Nardoni
Glendale, CA
The post was migrated from Yahoo.