Bankr. No.:
87-10289
Chapter:
12
Date of Decision:
January 7, 1994
Issue:
(1) Whether the debtors' plan should be modified to recognize equity the debtors acquired post-confirmation in some real property when a mortgage was forgiven and in some non exempt personal property purchased with exempt assets? (2) Whether the debtors are entitled to claim as exempt life insurance benefits received post-confirmation from a fraternal benefit society and the property purchased with the
benefits? (3) Whether the debtors have paid all disposable income to unsecured creditors?
Ruling:
(1) The debtors' plan should be modified to reflect any increase in equity in non exempt real or personal property acquired post-confirmation by recalculating the best interest of creditors test under § 1225(a)(4). (2) The debtors may only claim the life insurance benefits as exempt property. Once the funds were spent on non exempt estate property, they are no longer protected by the unlimited life insurance exemption
for benefits from fraternal benefit societies provided by S.D.C.L. § 58-37-68. (3) The debtors have not paid all disposable income to unsecured creditors.
Full Bankruptcy Court Decision:
Full Bankruptcy Appellate Panel/District Court Appeal Opinion:
Full Eighth Circuit Court of Appeals Opinion: