In re: Wanda Harding Staker

Summary

The United States Bankruptcy Court for the Eastern District of Virginia grants in part the Chapter 13 trustee’s amended motion to modify plan payments. The court holds that real property formerly held by the debtor and her deceased spouse as tenants by the entirety became property of the bankruptcy estate under 11 U.S.C. § 1306(a) after the spouse’s death. The court orders supplemental briefing on whether the resulting change in the debtor’s financial circumstances was substantial for purposes of modifying the confirmed plan under 11 U.S.C. § 1329.

Holdings

1. When a Chapter 13 debtor becomes the sole owner of property previously held as tenants by the entirety after the petition date, the debtor acquires a meaningful and distinct property interest, and 11 U.S.C. § 1306(a) brings that property into the bankruptcy estate notwithstanding the general exemption protections of 11 U.S.C. § 522(c). The court therefore held that the Property was property of the bankruptcy estate.
2. The court did not finally determine whether the change in the debtor's financial circumstances was substantial under § 1329. It held that the issue remained unresolved because the court needed supplemental briefing concerning the effect of the debtor's sole ownership of the property, the dismissal of her husband or his estate, and the disallowance of claims based solely on his obligations.

Questions Presented

1. Whether the debtor's acquisition of sole ownership of property formerly held as tenants by the entirety caused the property to become property of the Chapter 13 bankruptcy estate under 11 U.S.C. § 1306(a)(1).
2. Whether the debtor's change in financial circumstances was substantial for purposes of modifying the confirmed Chapter 13 plan under 11 U.S.C. § 1329(a).

Disposition

other