Although the retention of collateral validly repossessed prior to the filing of the petition does not violate the stay, the sale of that property does violate the stay and the sale is void. (Bonapfel) In re Rakestraw, 2022 WL 4085881 (Bankr. N.D. Ga. Sept. 6, 2022) Case Summary Ms. Rakestraw filed Chapter 13 on August 12, 2022, listing her ownership...
From the Editor – Conversion and Dismissal
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By The Honorable William Houston Brown (Retired)
Fifth Circuit gives undistributed money to creditors on conversion. On conversion of a confirmed case to Chapter 7, the undistributed funds held by the Chapter 13 trustee should go to creditors, except for $1,200 assigned by the debtor for unpaid attorney fees. The circuit panel discussed the split of authority on what passes to the Chapter 7 estate on conversion, prior to the 1994 amendment to § 348, as well as the absence of a statute that explicitly states what happens to undistributed money on conversion after the 1994 . . .
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