Sanctioned for causing ‘unconscionable’ harm to their clients Report from the Department of Justice, 2/13/18 – Law Solutions Chicago, doing business as “UpRight Law”, UpRight’s managing partner Kevin Chern, and affiliated partner attorneys Darren Delafield and John C. Morgan Jr. were sanctioned hundreds thousands of dollars “for causing ‘unconscionable’ harm to their clients”.
Filing bankruptcy for one company may bring the assets of another company owned by the same family or group into the bankruptcy of the first. In a recent decision, In re Cameron Construction & Roofing Co., Adv. P. No. 15-1121, 2016 WL 7241337 (Bankr. D. Mass. December 14, 2016), the Bankruptcy Court made the assets […]
Please Note:
The information contained in this web site, article or link may be outdated, incorrect or not applicable; it is your obligation to confirm the accuracy.
It is very important that you obtain legal advice from an attorney experienced in the laws related to your particular situation. Never rely on information obtained from the Internet, your friends or neighbors; it is very rare that their situation is exactly like yours. Seeking good legal advice before you take action will certainly cost you less than it will cost to fix your unintentional errors.
The information in this web site is not intended to constitute legal advice or to create an attorney-client relationship.
By Rebecca McKinsey The Republic | azcentral.com Wed Aug 7, 2013
Frank Becerra Campos, 66, of San Diego was sentenced this week to five years in prison for his involvement in a scam in which many Arizona Latinos lost their homes.
Frank Becerra Campos, 66, of San Diego, and two other men ran advance-fee mortgage-rescue companies that collected at least $669,743 in up-front fees from more than 260 homeowners “in exchange for loan modification services they utterly failed to provide,” according to court documents.
More than half of those homeowners were in Arizona, said Cosme Lopez, public-affairs officer with the U.S. Attorney’s Office in Phoenix.
Campos, who speaks Spanish, and Miguel Carrera and Oswaldo Esqueda, both Mexican citizens who lived in Arizona, targeted mostly “distressed” Latino homeowners, according to the U.S. Attorney’s Office.
Active warrants are out for the arrests of Carrera and Esqueda, Lopez said. Both are believed to have fled to Mexico.
“It was an easy scheme for (Campos) to do this, because of the type of people in need,” Lopez said.
Under two business names, the men charged up-front fees ranging from $2,500 to $4,500 and promised homeowners their mortgage principal balance and monthly payments would be reduced by about 25 percent, a news release by federal prosecutors said.
Court documents said, “Not a single homeowner received a reduction in the principal balance on their mortgage loan.”
Rather, foreclosure proceedings “inevitably” began against most of them.
The three men facilitated bankruptcy proceedings for many of the homeowners, telling them it would delay their foreclosures.
Prosecutors also noted that Bankruptcy Courts found that the men committed multiple bankruptcy violations.
Campos started Gold Capital Investment Corp. in California in 1989, and Carrera and Esqueda, who are brothers-in-law, started Foreclosure Home Savers LLC in Arizona in 2009. They joined forces soon after, according to U.S. District Court documents.
In 2010, after a complaint from one of their clients, the FBI began investigating the men.
Campos pleaded guilty to his involvement with the scam after being charged with conspiracy, a felony.
He was sentenced Monday to five years in prison and three years of supervised release.
After being indicted and provided counsel, Carrera and Esqueda fled.
Officials believe that they are in Mexico and that Carrera is working in real estate, using the name Mike Beltran, according to prosecutors.
Campos’ plea agreement stipulates his agreement to pay full restitution to the victims of the scam — $127,253 to those in California.
It says that he, Carrera and Esqueda are all responsible for the $542,490 owed to Arizona victims.
Any service asking for payment to serve as a third-party mediator between homeowners and financial institutions should raise a red flag, said Andres L. Contreras, vice president of commercial property operations and housing counseling for Chicanos Por La Causa.
For more than 40 years, Chicanos Por La Causa has offered educational services and advocacy to people in Phoenix.
Although the organization caters to anyone, it offers services in English and Spanish and often serves Latino residents. Its housing counselors help homeowners who are nearing foreclosure or have encountered services such as those offered by Campos, Carrera and Esqueda.
For Campos’ victims, language was likely a major factor, Contreras said.
“(If you are) uncomfortable talking to the loan provider or the financial institution, and somebody comes to your house, speaking your language … telling you, ‘We can help you with this, we know how to navigate through that’ — a lot of it is the language barrier,” he said.
Chicanos Por La Causa and similar organizations seek to educate homeowners and help those facing language barriers learn to advocate for themselves when it comes to housing.
“Anyone who says, ‘I’ll take care of this for you; I will talk for you,’ you need to be wary of that,” Contreras said.
Check out this web site, watch this YouTube video or just Google the topic. You will see law firms that advertise on TV and the Internet subscribe to this policy of the “6 minute sales pitch”. For years there has been a move to create mass-production law firms rather than law firms designed to assist […]
Please Note:
The information contained in this web site, article or link may be outdated, incorrect or not applicable; it is your obligation to confirm the accuracy.
It is very important that you obtain legal advice from an experienced bankruptcy attorney regarding your particular situation. Consultation before you take action will certainly cost you less than it will cost to fix your unintentional errors.
The information in this web site is not intended to constitute legal advice or to create an attorney-client relationship.
We believe you deserve better than to be treated like cattle headed down a chute. I customize my legal advice in order to respect your unique history, needs and wants.
No one should ever file a bankruptcy without looking at the big picture. There is far too much is at stake – like losing your tax refunds, surrendering a vehicle you need or asking mom to give back the money you just repaid her. Sometimes our clients need to move forward quickly due to a foreclosure or garnishment. We try to accommodate those needs, but all of these issues must be balanced in such way that you understand possible consequences.
The information you provide us will help to paint an accurate and detailed picture of your unique situation. Make list of any questions. You will have several opportunities to ask questions or make corrections.
Always remember you are not alone; we are here as your guide. But also remember a guide does not carry you up the path or walk it for you. A guide’s job is to help you traverse this rocky mountain called “bankruptcy”.
STEP 1 - OBTAIN YOUR FREE CREDIT REPORTS
Obtain credit reports from all 3 reporting agencies. If you are married obtain credit reports for each spouse. Here is a link to your free annual credit reports at Annual Credit Report. Why free? – The federal law requires that every Arizona resident be able to obtain a free annual credit report from each of the three credit reporting companies.
The law requires that you list every creditor address on every piece of mail received in the last 90 days before filing a bankruptcy. There are creditor addresses on both the front and back of each statement/bill. These credit reports are intended to supplement, not replace the demands and statements you recently received from your creditors/collection companies.
STEP 2 - ENTER INFORMATION ABOUT YOUR ASSETS AND CREDITORS
Note – just because we had the free telephone consultation does not mean I agreed to take you as a client or that you agreed to hire my office to help with bankruptcy. Assuming we agreed to work together, one of two options happened:
Please call us if you cannot find that invitation. MyCaseInfo is a secure site and only our firm will receive your financial information.
I want you to be very comfortable with this affirmation. Now you can see why it is very important to commit the time and effort now in order to avoid serious complications later.
IN ORDER TO MAKE YOUR LIFE EASIER PLEASE PRINT THESE INSTRUCTIONS FOR FILLING OUT THE ON-LINE FORM:If after reading these instructions and those on MyCaseInfo you have questions – please call Jay (602-246-7106).
STEP 3 - COMPLETE THE REQUIRED CREDIT COUNSELING COURSE
The law requires that you take a credit counseling class before filing bankruptcy. If you are married and filing together then both of you must take on-line course.
1) Abacus Counseling – http://www.abacuscc.org/
a. The cost is $25 to $35 (good report from other clients)
2) Start Fresh Today: https://www.startfreshtoday.com (10/11/17 – client complained she was left on hold for more than one hour after completing the required information.)
a. Online and telephone consultations available
b. Prices for household advertised to be the “lowest”
3) Access Counseling – www.accesscounselinginc.org
a. The cost is $15 to $25. (Note – one client was very unhappy with this company.)
4) DebtorCC – https://www.debtorcc.org/
a. $14.95 for the counseling class and $9.95 for the education class
Other options for providers are: CINgroup, GreenPath, DebtHelper and DECAF.
Note from Diane: Please let me know immediately if you have any problems with the providers I suggested. Always confirm the provider is approved by the US Trustee’s Office. Several non-approved providers are preying on naive folks charging for unapproved services.
Beware of offers from fraudulent educational services. They must be approved by the US Trustee’s Office.
STEP 4 - I WILL CALL TO SCHEDULE YOUR FIRST MEETING
Diane will call to schedule your first meeting and e-mail a list of items to bring to your meeting. If you are anxious to schedule the meeting feel free to call at 602.246.7106 to confirm we received notice that you completed the MyCaseInfo form.
The following is an advanced look at some of the items on the list Diane will send confirming your first meeting:
FLOWCHART OF CHAPTER 7 PROCESS
FLOWCHART OF CHAPTER 13 PROCESS
EXTRA FOR YOU: STEPS FOR ENTIRE "TYPICAL" CHAPTER 7 FOR AN INDIVIDUAL
EXTRA FOR YOU: STARTING OVER - Dave Ramsey’s Post-Bankruptcy SURVIVAL GUIDE & OTHER MATERIALS
Gift for you – Starting-Over-Dave-Ramseys-Survival-Guide.pdf (212 downloads)
Some other materials from Dave Ramsey:
As a favor to us:Thank you for your courtesy.
Please Note:
The information contained in this web site, article or link may be outdated, incorrect or not applicable; it is your obligation to confirm the accuracy.
It is very important that you obtain legal advice from an experienced bankruptcy attorney regarding your particular situation. Consultation before you take action will certainly cost you less than it will cost to fix your unintentional errors.
The information in this web site is not intended to constitute legal advice or to create an attorney-client relationship.
The following is an excellent article by another attorney. I like to give credit where credit is due – so I offer to you Mr. Blades insights. These also are true for Arizona residents. In this article are some videos from me regarding Arizona and bankruptcy issues.
Written by Rock Hill Bankruptcy Lawyer, Showell Blades
A client who has a good bankruptcy lawyer usually has a calm experience once the case is filed. The idea is to, as my mentor explained to me twenty years ago, disclose everything and fly under the radar. You do not want to do anything which draws unnecessary attention to your file or your fact situation so that your creditors or the United States Trustee’s office decides to take a closer look at the file. Even if nothing comes of that closer look, the process can be stressful for the clients.
Recently I had a woman storm out of my Rock Hill bankruptcy office after a free thirty-minute consultation which she ended by calling me an unpleasant orifice. My crime: I told her she had to wait four months to file bankruptcy and she wanted to file right then. She would best be served by remembering Ovid’s quote: “Bear patiently with a rival.”
The reason a client with a good bankruptcy attorney usually has a calm experience once the case is filed is because that attorney knows of the pitfalls that can come from taking simple actions, or by not taking them, before the case is filed. If all the bases are covered properly, there is nothing for anyone to scrutinize, or the client is at least prepared for those items which will come under closer scrutiny.
Be advised: the bankruptcy system can be a system where you encounter strong, well-funded and well-prepared rivals. Ovid’s advice can come in handy.
First, Debtors need to make sure that they do not have any deposits in any banks to which they owe money, whether in the form of CDs, checking or savings accounts, or other forms of deposits. This is because a bank has the right of setoff. If you file bankruptcy and owe a bank any money, then that bank has the right to administratively freeze the account and take the funds to pay the loan which you are not likely to pay in bankruptcy. For that reason, most good bankruptcy attorneys will make sure that you move your accounts to which you owe no funds so that you do not file bankruptcy and have your checking account frozen and all of the money that you would have going to pay bills that month disappear. You will not get it back. Also, keep in mind that many clients have automatic payroll deposits which need to be moved and drafts to pay important things like life and health insurance which need to be moved (both of which often take thirty days to change) .
Second, your attorney will ask you to whom you’ve paid payments on debts within the ninety days prior to filing bankruptcy and to whom you’ve paid payments on debts within the one year prior to filing bankruptcy if the lender was a family member. Take time to think about your answers. If you say “No one” and the bankruptcy trustee finds out that you have, then you have not told the truth which means you’ve committed at least three federal crimes. Additionally, any payment on a debt which qualifies as one of the above payment can be taken back by the trustee (preferential treatment) and given to the rest of your creditors. In other words, if you gave Aunt Zelda the $15,000 you owed her eight months ago and then you file bankruptcy, your bankruptcy trustee can sue Aunt Zelda to get all of the money back and will win causing her great concern because she probably doesn’t have it. Christmas will never be the same.
Also, if you paid the four mortgage payments you were behind all at once a month before you file bankruptcy and do not wait ninety-one days after that check clears, then the trustee may be able to get all of that money back from the mortgage company. You would find yourself in bankruptcy and still four mortgage payments behind which could put you in foreclosure. Tell your attorney about these things and expect to have to wait to file bankruptcy.
Third, if you are remotely thinking about filing bankruptcy or feel overwhelmed, but you have a 401(k) or IRA or a similar investment vehicle, and are thinking about solving your problems by cashing it in, DON’T. Go talk to a bankruptcy attorney and get some advice. This is for several reasons. Initially, you need to understand that your creditors cannot take that investment from you no matter how broke you are. It is exempt, protected from the reach of creditors or the bankruptcy trustee. So leave it alone. Don’t cave to the creditors’ threats and take what may be your last or only safe asset.
Another reason to consider disposing of this asset very carefully is this: I cannot tell you how many people I have seen who have cashed in their 401(k) and paid their credit cards down only to find themselves overwhelmed and now without their 401(k) still needing to file bankruptcy. Get advice before you try to pay off your debts with your 401(k). The only way I would advise that would be if you could pay off all of your debts in full, be able to handle any tax ramifications of cashing it in early, and be able to make it on your family budget after the debts are gone so that you do not find yourself upside down very soon so that cashing in the 401(k) was a waste.
Finally, if you cash in your 401(k) within the six months prior to filing bankruptcy, this could cause you to fail the Means Test. This is one of the things that the Court looks at to see if you qualify for bankruptcy and, if so, which type and what a payment would be if you filed a chapter 13. (This reason MAY have been negated by a Supreme Court decision that came out this week, but I wouldn’t want to be the first person to try to make sure of that). So talk to your attorney before you do it.
A fourth trap for the unwary is to renew loans or taking out loans prior to filing bankruptcy. You need to tell your attorney what you’ve done with your credit in the last six months or so. This is because creditors have the right to object to your discharging, or getting rid of, their debts. There are a number of reasons creditors can use to do this but one of them involves your borrowing money right before you file bankruptcy. What IS “right before filing bankruptcy” is not defined. I have had a creditor object to charges that were made four and a half months prior to my client filing bankruptcy. If this happens you have to pay me extra money to defend that lawsuit or you have to settle it by paying back the creditor. It can be avoided by figuring out when you last used credit, telling your attorney, and waiting to file. Renewals of loans before filing count also.
The fifth and final trap involves not making sure you know what your assets (your property) is worth. Your attorney is going to be asking you all kinds of questions. Many of them deal with the value of your house, your cars, your furniture, antiques, an other property. The Court expects you to know what they are worth. If you do not it could have bad results for you for several reasons.
Most of the reasons involve the trustee’s selling your stuff because he can make money by selling them, paying off the liens on them, paying you your share of the money (your exemption) and, if he still can make more money after all of that, it is his to use pay to your creditors. If you make sure that you have an accurate value for your assets, then it will be close to what a trustee could get by selling them and your attorney can claim the correct exemptions and protect your assets. Since sometimes you have to make choices about what you want to protect and what you don’t, knowing a good value is important.
Also, a recent U.S. Supreme Court opinion (“Schwab” exemption case) says that, if a debtor undervalued his assets when he claimed his exemptions and a trustee can sell them for more, the Debtor cannot get the money that the trustee made over the debtor’s exemption amount even if he could have claimed more but did not. Thus, you need to know the value so you can claim the full amount of protection.
Another reason value is important is that, in some cases, if your collateral is worth less than you owe, you can pay the value of the collateral to the creditor and not the larger amount that you owe. If you undervalue your stuff and file a motion to value and the property turns out to be worth close to what you owe, then you wasted everyone’s time and you and your attorney look stupid.
Finally, if you undervalue your assets and they turn out to be worth significantly more, not only could you lose them but you could find yourself being criminally prosecuted for bankruptcy fraud. This could happen even if you did not intentionally undervalue them; rather, you were too lazy or irresponsible to try to find out a good value. Debtors have the burden of investigating their affairs and reporting everything truthfully and completely to the Court.
In summary, there are many considerations which must be addressed before you file bankruptcy. Attorneys know that everyone who needs to file bankruptcy wants it done as soon as possible. However, it also is their job to help Debtors make the best decisions. Debtors must understand that sometimes they must fully apprise their attorneys of the facts and think about what they are telling their attorneys (and of what their attorneys are telling them). They also need to understand that, sometimes, they are going to have to be patient before they enter Bankruptcy World because the wolves are at the door.
Please Note:
The information contained in this web site, article or link may be outdated, incorrect or not applicable; it is your obligation to confirm the accuracy.
It is very important that you obtain legal advice from an attorney experienced in the laws related to your particular situation. Never rely on information obtained from the Internet, your friends or neighbors; it is very rare that their situation is exactly like yours. Seeking good legal advice before you take action will certainly cost you less than it will cost to fix your unintentional errors.
The information in this web site is not intended to constitute legal advice or to create an attorney-client relationship.
By Benzion J Westreich & Scott C Cutrow, Katten Muchin Rosenman LLP (reprinted with permission of authors) (This article was first published by the International Law Office.)
Are you playing Jenga with your home?
Since the California Supreme Court’s 1897 decision in Davis v Randall,(1) the law in California has clearly been that “whether a mortgage lien is merged in the fee … upon both being united in the same person” is a question of the intent of the grantee, with the presumption being that both interests will be treated separately if the grantee is also the holder of the mortgage. Most, if not all practitioners have relied on this decision and have therefore used this two-step process (deed in lieu followed by non-judicial foreclosure) to quickly obtain title to the property and remove any and all intervening liens. The endgame is to clean up the property and position it for resale with a clean title. For decades, this strategy worked, with title companies providing the necessary insurance upon the subsequent sale.Due to the 2008 economic downturn, the ensuing pervasive foreclosure actions and the fact that title companies felt embattled because of the extraordinary number of mechanic’s lien claims that they had to insure as a result of underwriting decisions made for business reasons (the prime factor being the decision to insure the priority of deeds of trust even though they were recorded after the commencement of construction), title insurance companies have refused to insure sales by lenders after their two-step foreclosures, citing the merger doctrine. Title companies were ignoring the nonmerger presumption in the case of mortgagees, as well as the fact that the presumption was invariably bolstered by specific non-merger provisions in the deed in lieu documents.
In Decon Group, Inc v Prudential Mortgage Capital Co, LLC,(2) a California appellate court recently affirmed this tenet of California law. The court found that Davis is alive and well and held that where a senior lienholder receives a grant deed containing an anti-merger clause in lieu of foreclosure on a property that is also subject to a junior lien, the senior deed of trust lien does not merge into title and the senior lienholder retains the right to foreclose on the property and to extinguish the junior lien. Decon should help to dispel the reluctance of title companies to insure title upon a sale after a twostep foreclosure.
A property owned by a borrower was subject to a first deed of trust held by a lender recorded in February 2008. In April 2009 after not being paid for renovations that it had performed for the property owner, Decon recorded a mechanic’s lien against the property.
In July 2009 the mechanic’s lien holder filed suit against the borrower and the lender for breach of contract and quiet title. In September 2009 the lender filed a notice of default and election to sell the property, thus commencing the foreclosure process. In November 2009, in a negotiated transaction, the lender accepted a deed in lieu from the borrower. The grant deed between the borrower and lender expressly provided that the interest of the grantee of the property would not merge with the interest of the lender upon transfer or assignment, but would instead remain separate and distinct.
In December 2009 the lender filed a notice of sale and in January 2010 an affiliate of the lender purchased the property at the foreclosure sale (apparently, as is the practice, to avoid transfer taxes the affiliate was also the holder of the deed of trust). In April 2010 the affiliate sold the property. Following the sale, the holder of the mechanic’s lien brought an action to foreclose its lien, challenging the lender’s foreclosure. The mechanic’s lien holder argued that the merger doctrine applied. They argued that the senior lender’s acceptance of a deed in lieu had extinguished the senior loan and deed of trust, merging them into a single interest. The mechanic’s lien holder further argued that the senior lender was thus unable to initiate foreclosure proceedings.
The trial court agreed with the mechanic’s lien holder and held that under the merger doctrine, the mechanic’s lien was not eliminated by the sale of the property and was first and primary to all other liens on the property.
On appeal, the court held that the senior lienholder’s acceptance of a deed in lieu of foreclosure did not eliminate the senior deed of trust. The court reiterated the longstanding California law that “the senior beneficiary’s lien and title do not merge when a deed in lieu is given if there are any junior lienholders of record”.(3) The court reaffirmed that there is a presumption against merger if the grantee is a senior lienholder, as the senior lienholder’s intent to avoid merger is assumed. Regarding the actual intent of the parties, the court stated that the foregoing presumption was buttressed by the non-merger provision in the deed in lieu, which clearly indicated the specific intent of the parties. Consequently, the merger doctrine did not apply and the mechanic’s lien was eliminated by the lender’s non-judicial foreclosure.
The Decon decision reaffirms the longstanding principle that a senior lienholder’s acceptance of a grant deed in lieu of foreclosure does not merge the lien into title. Further, the case demonstrates the importance of the parties’ intent and establishes that there is no merger where the senior lienholder does not intend that the lien be merged into title. As a practical result of the case, senior lienholders can protect themselves by making their intent to avoid merger clear in the terms of the grant deed, as any such intent expressed will weigh heavily against merger.
Lenders looking for additional protection may seek to defend themselves by ensuring that the grant deed is accepted and held by an entity separate from the lienholder. Because the merger doctrine applies only where a single owner holds a greater and lesser estate in the same parcel, forming two distinct entities to hold the respective interests can serve to defeat merger. For example, a lender’s creation of a separate LLC to receive title by way of the grant deed will sufficiently result in two different and distinct owners, thereby avoiding the consequences of merger. California’s transfer tax laws are somewhat unclear as to whether transfer tax must be paid if the deed of trust is not held by the transferee in the non-judicial foreclosure. California law specifically exempts lenders that hold a deed of trust from transfer tax if they accept a deed in lieu or purchase the property in a foreclosure sale. It is unclear what happens if this is done through a subsidiary. This is why the non-merger doctrine, as applied to foreclosing lenders, is so important.
In light of Decon, title companies have little basis for refusing to insure sales by lenders after a twostep foreclosure, especially where lenders have taken the aforementioned precautionary measures, because Decon reaffirms that a senior lienholder’s interests will be protected under California law. Decon makes one thing abundantly clear: the strong and effective drafting of a grant deed is fundamental to a lender’s ability to avoid the consequences of merger and take advantage of the benefits of accepting a deed in lieu of foreclosure.
By Benzion J Westreich & Scott C Cutrow, Katten Muchin Rosenman LLP (This article was first published by the International Law Office.)
Please Note:
This area is intended for the exclusive use of attorneys. You know the drill – do your own due diligence. We make no representations as to the accuracy or current status of any information cited herein.
If you are NOT an attorney it is important to educate yourself, but this is not the place to do it. You must obtain legal advice from an experienced attorney familiar with your unique situation. Fixing unintentional errors will cost far more than doing it right the first time; if it can be fixed at all.
The information in this web site is not intended to constitute legal advice or to create an attorney-client relationship.
IMPORTANT: This firm makes NO representations as to the accuracy or current status of any law, case, article or publication cited herein or linked to.
Warning – some of these references are pre-BAPCPA.
DISCLAIMER OF INHERITANCE PRE-BANKRUPTCY
In re Costas, 06-16520, 555 F.3d 790 (2009) (BAP 9th Cir. 2008) Costas inherited $34,800, but refused to accept it and, on November 7, 2002, executed a disclaimer under Arizona law to relinquish her claims to the Trust property.
December 3, 2002, Costas filed a Chapter 7. Maureen Gaughan, trustee, sought to avoid Costas’ disclaimer of the Trust property under 11 U.S.C. § 548 as a fraudulent conveyance within a two year pre-petition. The question in this case is whether an Arizona disclaimer qualifies as a “transfer … of an interest of the debtor in property.” BAP decided “not a transfer”Arizona’s relation-back rule says that a disclaimant neither transfers nor possesses an interest in disclaimed property and thus creditors cannot reach the disclaimed interest. We hold that a disclaimer, properly executed under Arizona law, is not a “transfer … of an interest of the debtor in property” for purposes of § 548.
DEBTOR TRANSFERS INHERITANCE POST-PETITION
In re Brown, Brown vs Barclay, BAP No. SC-17-1068-AKuS (5/21/18) BAP for 9th Circuit affirmed summary judgment entered by bankruptcy court (SD Cal.) in favor of plaintiff-chapter 7 trustee avoiding debtor’s postpetition transfer of inheritance proceeds to his brothers. Because of debtor’s bad faith, postpetition receipt of inheritance proceeds while in chapter 13 remained property of chapter 7 estate under 11 USC 348(f)(2). Because debtor’s transfers were not ordinary and necessary expenses, 11 USC 348(f)(1) did not safe harbor transfers of inheritance proceeds from estate. Consequently, postpetition transfers of property of estate were avoidable.
EXEMPTION FOR INHERITANCE or OTHER MONIES
In re Berryhill, 2:19-07421-BKM The Court has reviewed the party’s arguments and the case cited by Mr. Mumme, In re Royal 165 B.R. 802 (Bankr. MD 1994). In analyzing a Maryland exemption statute, the court in Royal determines that it is appropriate to distinguish an inheritance from third party obligations triggered upon a person ‘s death.
“This distinction is significant because the Maryland statute lists out various third party obligations as being covered by the statute. In contrast, ARS 33‐1126(A)(1) lists no such examples and by its wording applies to any and all monies “payable or received… upon the life of a deceased….” The Court agrees with the analysis in In Re Thiem that the Arizona statute contains nothing to suggest the source of the funds received by the beneficiary is limited to insurance pay outs, or to amounts paid from third party sources. The Court, thus, concludes that ARS 33‐1126(A)(1) applies to all monies received by way of inheritance. Accordingly, the Trustee’s objection to Debtor’s exemption is overruled”
