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Wolfe v. Farrior (In re Farrior) (Case No. 04-00263; A.P. No. 05-05032) 04/20/2006

The male debtor inherited the real property within 180 days of filing the bankruptcy petition.  11 U.S.C. § 541(a)(5)(A) provides that property acquired by inheritance, bequest, or devise within 180 days of the filing of the petition becomes property of the estate.  The Chapter 7 Trustee filed a motion to sell real estate free and clear of liens and co-owner's interest pursuant to 11 U.S.C. § 363(h).  The debtors argue that the provisions of Section 363(h) do not apply to the proposed sale because the male debtor made a partial disclaimer of his inheritance, and under Virginia law, the right to disclaim his inheritance permits exclusion of the disclaimed interest as property of the estate even when the disclaimer occurs after the filing of the bankruptcy petition.  The Court disagrees, holding that federal law, not state law, governs property of the estate and legal rights and interests of the debtors.

Date: 
Thursday, April 20, 2006
Category: 
363 Sales
Property of the Estate
Chapter: 
7