Chapter 7 Debtors had to Turnover Pre-petition Payments made for Daughter’s Ballet Courses, as well as Paid Time Off

Chapter 7 Debtors had to Turnover Pre-petition Payments made for Daughter’s Ballet Courses, as well as Paid Time Off

Prior to  filing a Chapter 7 bankruptcy case, the Debtors  made several payments related to an upcoming ballet course in North Carolina, which their 17-year-old daughter was to attend. Trustee filed a Motion to Compel Debtor to Turnover Estate Property seeking turnover of two things: (1) the equivalent value of the payments related to the ballet course, and (2) 25% of the Debtors’ interest in the paid time off (“PTO”) each had accrued at their respective places of employment as of the petition date.

The Bankruptcy Court held a hearing on the Trustee’s Motion to Compel.  With respect to the ballet course, Debtors were to “immediately turn over the equivalent value of the Tickets, Ballet Tickets, and Workshop in the amount of $3,491.20”; with respect to the PTO, Debtors were to “turn over twenty-five percent (25%) of the net value of the Estate’s pro-rata interest in paid time off in the aggregate amount of $2,297.57 as the Debtors use the paid time off.”  The Debtors moved for reconsideration, which motion the Bankruptcy Court denied on October 4, 2016. Debtors filed a Notice of Appeal on October 12, 2016, and the matter was assigned to this Court.

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1 Comment

  1. Richard Heston

    Penny ante as this case may be, the outcome seems justified and consistent with the law. Frankly, we might not be suffering under the anti-debtor provisions of BAPCPA, but for this type of spendaholic abuse. The debtors’ nearly majority aged daughter does not need to go to ballet camp, and the paid time off, i.e. the right to receive money, is clearly an asset. If the standard is the proverbial “honest, but unfortunate debtor”, these debtors miss the mark by a country mile.

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