A recent appeals court decision on how to treat home sale proceeds during bankruptcy is a homeowner-friendly decision for those cashing out in the robust real estate market.
In Rodriguez v. Barrera, the U.S. Court of Appeals for the Tenth Circuit found that federal bankruptcy law allowed a bankrupt Colorado couple to keep home sale proceeds that were realized after their Chapter 13 plan was confirmed by a bankruptcy court, but before they converted the case to Chapter 7.
The court ruled that the proceeds weren’t automatically part of their Chapter 7 bankruptcy estate. That meant the couple could ...
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