October 28, 2013 4th Circuit published opinion

Carroll v Logan

Carroll and his wife filed for Chapter 13 bankruptcy and had their plan approved. Before the case was closed, Carroll inherited from his mother and the bankruptcy court ordered the inheritance included in the Chapter 13 estate. The appeal was certified to the 4th Circuit. The panel affirmed. It held that 11 USC 541 includes inheritances in bankrupt estates and 11 USC 1306 includes inheritances during the pendency of a Chapter 13 case. It reasoned that the plain language of the 1306 expanded the time frame for including inheritances by incorporating 541’s definition of the types of property included but substituting the period when the case is not closed, dismissed or converted for the 180 day period in 541. The panel held this is consistent with chapter 13’s balance of privileges to the debtor with the right of creditors to take part of any increase in income over the term of the plan. The panel rejected Carroll’s counterarguments holding the two sections plainly supported inclusion and 1306 is specific to Chapter 13 cases and therefore governs the issue.

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