Chapter 13 Post-Confirmation Property

02/12/14

In the case of In re Foreman, 378 B.R. 717 (Bkrtcy.S.D.Ga. 2007) a wrongful death claim arose post-petition. The Court held this claim not to be property of estate as it arose post-confirmation and that a debtor has no ongoing duty to disclose assets acquired post-confirmation that are not property of the estate.

The Court held that a debtor has an ongoing duty to disclose only property of the estate. Burnes v. Pemco Aeroplex, Inc. 291 F.3d 1282 (11th Cir.2002). In chapter 13, the determination of property of the estate is complicated under sections 1306 and 1327. Per section 1327, the  confirmation of the chapter 13 vests all of the property of the estate in the debtor except as otherwise provided in plan or order of confirmation. It noted that Telfair v. First Union Mort. Corp., 216 F.3d 1333 (11th Cir. 2000) adopted the "estate transformation" approach of the 7th Circuit holding in Black v. United State Postal Serv., 115 F.3d 521, 524 (7th Cir. 1997). Under the "estate transformation" approach, only property necessary for the execution of the plan remains property of the estate after confirmation. Muse v. Accord Human Resources, Inc., 129 Fed. Appx. 487 (11th Cir. 2005)(No party asserted property was necessary to fulfull plan).

The court held that Burnes does not apply to chapter 13 post-confirmation assets as it involved the duty to disclose upon a request for conversion to chapter 7 and not the ongoing duty to disclose assets acquired post-confirmation in a chapter 13 case.  The court further held that there was no judicial estoppel as the post-confirmation tort was not involved in the bankruptcy case and the debtor did not have the obligation to disclose it and that there was no reason for debtor to amend schedules to list this claim.

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