LET’S say that husband and wife filed for Chapter 7 bankruptcy relief to discharge $80,000 of credit card debt. A week after they filed for bankruptcy husband dies. In schedule B of their bankruptcy petition, they list a $100,000 term life insurance insuring the life of husband with wife as beneficiary. The question is who has the right to get the $100,000 life insurance proceeds, the wife or the Chapter 7 trustee? This is an interesting question, isn’t it? You have the wife who is mourning the death of her beloved husband who obviously got the insurance so his wife could have $100,000 when he died. And then there is the trustee who wants to get the $100,000 so he can use that to pay their creditors. Is there any justice in this world? I mean, does a debtor literally owe creditors his life insurance proceeds when he dies?
Atty. Larry Yang
Lawrence Bautista Yang specializes in bankruptcy, business, real estate and civil litigation and has successfully represented more than five thousand clients in California. Please call Angie, Barbara or Jess at (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803
Bankruptcy trustees also get in trouble
CHAPTER 7 bankruptcy trustees represent the collective interest of creditors in a bankruptcy case. They are responsible for selling non-exempt debtor assets and using the sale proceeds to pay off creditors. Debtors often mistake the Chapter 7 trustee for a Judge. They are not judges. There is a judge assigned to each bankruptcy case. Any conflict between debtors and trustees go to the judge for adjudication. The judge is an impartial arbiter who determines what the facts are, applies the law, and promulgates judgments that bind the parties.
Are tax refunds subject to turnover to Chapter 13 trustee
WHAT happens to income tax refunds when a debtor files for Chapter 13 relief? This is an interesting question, indeed. First, distinguish as to tax refunds for income earned before filing of the Chapter 13, and tax refunds for income during the Chapter 13 commitment period. For example, debtor filed his Chapter 13 case on January 2, 2012 but is expecting to receive a tax refund of $10,000 for his 2011 tax returns. What will happen to the $10,000 refund? Does debtor get to keep the refund or should debtor transfer the refund to the Chapter 13 trustee? Ouch, that hurts! Most debtors plan on using tax refunds for emergency payments, or use refunds to pay for real estate taxes, so refunds are money that debtors are relying on for survival. If they lose the refund by filing Chapter 13, they might as well postpone filing the case until they receive the refund and use it up, if they have time to spare. But if they are filing a 13 to stop an imminent foreclosure, delaying filing is not an option.
Archdiocese of Milwaukee and ‘Twinkies’ walk into bankruptcy court
THE Catholic Archdiocese of Milwaukee, which faces more than a dozen civil fraud lawsuits because of its mishandling of clergy sex abuse cases filed for Chapter 11 bankruptcy protection this week. Apparently, the Church needed to stop the lawsuits from proceeding further to trial where judgments may wipe out the Church completely. Archbishop Listecki sugar coated the Church’s reason for bankruptcy by saying that the move was necessary to “fairly compensate victims” and to continue the “essential ministries” of the Church.
Will Bishop Gabino Zavala file for Chapter 7 relief?
WHY should Catholic Bishop Gabino Zavala, the number two bishop in Los Angeles County seek Chapter 7 relief when priests do have a vow of poverty? I’m just speculating based on the headlines today in the LA times: “L.A. AREA BISHOP, FATHER OF TWO, RESIGNS.” So what if he fathered two kids who now are teenagers, living with their mother in another state. Why should he need Chapter 7 relief?
Archbishop Jose Gomez who succeeded Roger Mahoney responded with a letter to the once again betrayed faithful saying that “He is the father of two minor teenage children, who live with their mother in another state… Let us pray for all those impacted by this situation and for each other.” I am not sure why Archbishop Gomez refers to a Bishop having two kids as a “situation”. Didn’t the bible say go fruitful and multiply? I am also not sure who is impacted by this situation and why we should pray for each other. I mean Bishop Zavala is certainly impacted by this situation but why should I pray for him?
