Law Commons^™

Use It Or Lose It: Grappling With Classification Of Post-Petition Sale Proceeds Under Chapter Seven Bankruptcy For Consumer Debtors In The Lone Star State., Danielle Nicole Rushing

St. Mary's Law Journal

Texas affords consumer debtors some of the most generous state bankruptcy exemptions in the United States. This includes the homestead exemption, which permits consumer debtors to exempt a homestead of unlimited value from forced sale, subject to certain enumerated exceptions. Bankruptcy courts throughout the state are grappling with how to characterize proceeds from the sale of an exempted homestead once a consumer debtor files a Chapter Seven bankruptcy petition. Specifically, courts consider whether a debtor may personally retain funds from the sale of a homestead or whether a Chapter Seven Trustee should receive the sale proceeds on behalf of the …