Bankr. No.:
88-50112
Chapter:
7
Date of Decision:
March 23, 1989
Issue:
(1) Whether a statutory redemption right existing at the time the bankruptcy case was filed is property of the Chapter 7 estate? (2) Are the proceeds of the post-petition sale of the redeemed real estate encumbered by the lien of the second mortgage or are the proceeds unencumbered and available to satisfy unsecured claims? (3) Are the proceeds exempted from the estate under the debtors' homestead exemption?
Ruling:
(1) The debtors' right of redemption was part of the bankruptcy estate at the time of the filing - Johnson v. First National Bank of Montevideo, Minn., 719 F.2d 270 (8th Cir. 1983), cert. denied, 465 U.S. 1012 (1984). (2) Under South Dakota law, by virtue of the debtors' redemption, the second mortgage survived the foreclosure of the first mortgage. (3) The debtors are unable to exempt the proceeds of the sale from their bankruptcy estate.
Full Bankruptcy Court Decision:
Appeal Summary:
The district court affirmed the bankruptcy court’s decision. District Court Opinion no long available.