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During a Chapter 13 bankruptcy proceeding, a trustee collects a portion of a debtor’s wages for distribution to creditors according to a court-approved payment plan. At any time, a debtor may convert his Chapter 13 proceeding into a Chapter 7 proceeding, during which the debtor’s wages are not collected. What happens to wages collected, referred …
As an update to our blog post of November 25, 2014 (below), the United States District Court for the District of Oregon recently changed course with regard to property surrendered in bankruptcy, vacating and remanding In re Watt. Judge Ann Aiken recognized the lack of clarity to 11 USC 1322(b)(9), which at first blush may appear …
Financial Services clients are in for a surprise if they read In Re Watt from the US Bankruptcy Court for the District of Oregon stating that, without consent, banks own property surrendered in bankruptcy. The court wrote that USC 1322(b)(9) does not restrict a court from vesting real property in a bank’s name even if the …