Dale v. Maney (In re Dale)
- Summarized by Bryan Robinson , Law Offices of Bryan Robinson
- 10 years 11 months ago
- Citation:
- In Re Dale, 9th Cir. B.A.P., AZ-13-1251-DPaKu, (Feb. 5, 2014)
- Tag(s):
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- Ruling:
- In a published opinion, the 9th Circuit Bankruptcy Appellate Panel affirmed the Bankruptcy court ruling that an inheritance received by the debtor, 180 days following the petition date but prior to confirmation of the debtor's chapter 13 plan, was an asset of their bankruptcy estate pursuant to 11 U.S.C §1306 and must be distributed under an amended plan in a manner in the best interest of the creditors as stated in 11 U.S.C §1325.
- Procedural context:
- The chapter 13 trustee demanded that the debtor's turn over the Inheritance funds to the trustee for distribution to their creditors.The Trustee filed a motion to dismiss the debtors’ chapter 13 case, for failure to turn over inheritance to trustee and because payments under their proposed plan were delinquent. The debtors responded with an “Amended Motion for Moratorium,” proposing to make the remaining payments under their plan using the unspent funds from the Inheritance. The Trustee filed an amended motion to dismiss (“Amended Motion”), arguing that the debtors’ chapter 13 case should be dismissed because the debtors 1) had failed to comply with the Trustee’s recommendations; 2) had failed to disclose and turn over the nonexempt Inheritance proceeds; and 3) were still delinquent on plan payments. The bankruptcy court determined that the Inheritance proceeds were property of the bankruptcy estate. The debtors timely appealed.
- Facts:
- The debtors filed their chapter 13 petition on October 31, 2011. On August 11, 2012, more than 180 days following the petition date, debtor's (Mr. Dale’s) mother passed away, entitling him to an inheritance of approximately $30,000 (“Inheritance”). On December 13, 2012, the debtors filed a declaration with the bankruptcy court disclosing the Inheritance. To date, no plan has been confirmed in their chapter 13 case. The chapter 13 trustee demanded that the debtor's turn over the Inheritance funds to the trustee for distribution to their creditors. The Trustee filed an amended motion to dismiss (“Amended Motion”), arguing that the debtors’ chapter 13 case should be dismissed because 1) the debtors' had failed to comply with the Trustee’s recommendations; 2) the debtors had failed to disclose and turn over the nonexempt Inheritance proceeds; and 3) the debtors were still delinquent on plan payments. The debtors asserted that their case should not be dismissed because the post petition Inheritance proceeds were not property of their bankruptcy estate. The debtors argued that even if the inheritance is a part of the bankruptcy estate, the inheritance must be accounted for consistent with “Chapter 7 reconciliation” rather than being required to turn over the entire Inheritance proceeds for distribution to their creditors.
- Judge(s):
- DUNN, PAPPAS, and KURTZ,
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