Black Decision Sheds Light On Vesting Questions

shedding light on vesting

Clouds of uncertainty have hovered over Chapter 13 debtors who find that they need to sell appreciated property before the case is over. Does appreciation occurring after filing go to creditors on the theory that the appreciation is property of the estate? Or does the vesting of property at confirmation entitle the debtor to any post petition appreciation? With the 9th Circuit BAP's decision in Black, we have some more light on the issue.  Or at least, for those of us in the 9th Circuit. The BAP faced head-on the interplay between concepts of vesting and property of the estate.  The court held that property vested in the debtor belonged to the debtor free of the claims of unsecured creditors. So, on the sale of the property prior to completion of the case, the appreciation went to the debtor and the original Chapter 13 plan limited what creditors got. Facts going in At the commencement of the case, Debtor Black owned a rental property valued at $44,000.  He claimed no … [Continue reading...]