Bankr. No.:
05-10146
Chapter:
7
Date of Decision:
October 31, 2005
Issue:
(1) What portion of the debtor’s bank account on the petition date was estate property? (2) What portion of the debtor’s 2005 federal income tax refund was property of the estate? (3) What amount of wages that the debtor had earned pre-petition but that remained unpaid on the petition date was property of the estate?
Ruling:
(1) Whatever funds were in the bank account at the time the debtor filed her petition, those funds were property of the bankruptcy estate. The power to stop payment on outstanding checks also becomes a bankruptcy estate asset that was exercisable by the case trustee. (2) As the Court has long held, the debtor and the bankruptcy estate divide any federal income tax refund for the year in which the petition is filed based on the date of filing. The nature or statutory basis for the refund does not alter that calculation. (3) Less mandatory deductions, all wages earned pre-petition but unpaid on the petition date are property of the bankruptcy estate. As the Court has previously held, S.D.C.L. § 21-18-53 precludes a debtor from exempting wages under S.D.C.L. § 43-45-4. The Court further concluded that S.D.C.L. § 15-20-12 is not an exemption statute recognized in bankruptcy in addition to § 43-45-4.
Full Bankruptcy Court Decision:
