February 2015

If you are a beneficiary of a trust, and you are looking to eliminate debt, you may be able to retain the benefits such a trust. The Bankruptcy Code defines what is subject to the bankruptcy estate under 11 USC 541. Property of the estate is subject to a trustee sale and distribution in a Chapter 7. The Bankruptcy Code provides a exception to its broad definition of property belonging to the estate. This exception excludes from the bankruptcy estate a debtor’s interest in property that contains “a restriction on the transfer of a beneficial interest of the debtor in a trust that is enforceable under applicable nonbankruptcy law.” Courts, after examining the legislative history of this provision, have concluded...

A recent court decision in Georgia found against a creditor for simply being too late (United Community Bank v. Harper, 489 B.R. 251).  When individuals file for bankruptcy, creditors who are owed money can contest a bankruptcy by filing a complaint in the bankruptcy court called an “adversary proceeding.”  However, the Bankruptcy Code puts time limitations on those complaints.  As the court in Harper explained, “the Code sets the deadline for the filing of such a complaint, objecting to discharge . . . at sixty (60) days after the first date set for the meeting of creditors under 11 U.S.C. § 341.” The debtor had previously agreed with the creditor to extend the date to object to the discharge.  However,...

Here at Henshaw & Henry, PC, we handle bankruptcy cases, as well as litigation cases.  Many of our litigation cases derive from bankruptcy filings.  We recently received a favorable decision in the Alameda Superior Court wherein a plaintiff sued our clients (both individuals and corporations) over various contract and tort claims.  The plaintiff sought to obtain a large sum of money based on an investment he and his wife made in a restaurant business. One of the major issues in the case was whether two of the defendants (husband and wife) could be held liable in the case even though the facts of the case took place after the couple filed for bankruptcy, and later received a bankruptcy discharge.  The plaintiff...

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