9th Cir: Here’s who gets Asset Appreciation in Converted Bankruptcy
Ninth Circuit rules home appreciation which accrued between Chapter 13 confirmation and conversion to Chapter 7 can be administered to repay debts, creating split from 10th Circuit
It’s not uncommon for a debtor in Chapter 13 bankruptcy to need to convert to Chapter 7 if debtor has a job loss or health problems. In a rising real estate market, homes can appreciate between confirmation and conversion. To whom does the appreciation in equity belong? This is where debtors and Chapter 7 trustees fight fiercely over the home and its new equity.