In a recent opinion, Hon. Mark A. Randon of the U.S. Bankruptcy Court for the Eastern District of Michigan ruled in favor of a debtor’s right to retain post-petition appreciation from the sale of a home while in chapter 13.
In re Elassal, 2023 Bankr. LEXIS 2126 is the first controlling opinion in the Eastern District of Michigan providing that post-petition value realized from the sale of a pre-petition asset can be retained and used by the debtor.
This is a significant decision for Michigan homeowners facing bankruptcy, particularly at the height of the real estate market. Consumers can now retain value in their pre-petition assets without fear of retribution by the Trustee in their plan. Debtors now have more flexibility to pivot with life’s changes during Chapter 13, while still realizing the benefits of reorganization, including the discharge of debts and retention of assets.
Homeowners facing bankruptcy, or those in Chapter 13 bankruptcy with questions about how this important ruling may impact their assets can contact Michelle H. Bass at mbass@wolfsonbolton.com
You can read the full version of the Bankruptcy Court’s decision here.
