Bankrupt Couple Can Keep Proceeds of Pre-Conversion Home Sale

A bankrupt couple can keep their Colorado home sale proceeds generated between their Chapter 13 plan confirmation and the bankruptcy case’s conversion to Chapter 7, instead of handing them over to creditors, the Tenth Circuit ruled.

The sale proceeds that belonged to the debtors when they filed Chapter 13 would later go back to the debtors after the plan is confirmed by the bankruptcy court, the U.S. Court of Appeals for the Tenth Circuit said Wednesday. The case conversion to Chapter 7 doesn’t automatically make the proceeds the estate’s property, which would be subject to creditors’ reach, the appeals court ...