[CLBS] Property of the Estate

[Randy French]

Robin, 

Usually the ch 7 estate after a conversion consists only of assets that were
part of the estate at the petition date for the ch 13.  See sec. 348(f).
Post-petition wages are not part of the estate in a ch 7.  Cf. 541 and
1306(a)(2).  If you convert, whether today or later, the wages for
post-petition services will not be part of the ch 7 estate.  Cf. 348(f)(2).
(estate consists of assets as of the date of conversion, if the debtor
converts in bad faith.)

Will the debtor qualify for a ch 7 discharge, i.e., has there been a
petition in a previous case within 8 years of the ch 13 petition?  Are there
any avoidable transfers that would go away if your client just dismissed now
and refiled?  Of course, that would make the severance check potentially pat
of the ch 7 estate.

You could just let the debtor stay in ch 13 and receive the check and use it
to pay her living expenses for a few months (presumably while she is looking
for replacement employment)   and then convert.  If conditions are
appropriate.

Good luck.  I know these are tough decisions to make.  

Thanks.
Randy French

Law Office of Randal J. French, P.C.
Attorneys at Law
AP.O. Box 836 PBoise, ID 83701 B(208) 859-6881  

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-----Original Message-----
From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Robin Long
Sent: Wednesday, October 19, 2016 12:10 PM
To: Bankruptcy list
Subject: [CLBS] Property of the Estate

Listmates:

I have a client in a chapter 13 who lost her job. I would like to convert
the case, but she is receiving a severance check today. Since she will
receive the check prior to the order of conversion will the chapter 7
trustee have any claim to the funds?

Thank you,

Robin Long
Attorney
Foley Freeman PLLC
953 S. Industry Way
Meridian, ID 83642
P.O. Box 10
(208) 888-9111
(208) 888-5130

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