§ 46.6     Gifts, Loans and Windfalls
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 46.6, at ¶ ____, LundinOnChapter13.com (last visited __________).

Because the Chapter 13 estate includes “all legal or equitable interests of the debtor in property” that the debtor “acquires after the commencement of the case,” even gifts, loans and just plain found money become property of the Chapter 13 estate.1 As mentioned above, under § 541(a)(5) all bankruptcy estates include an interest the debtor acquires by inheritance within 180 days of the petition.2 In a Chapter 13 case, § 1306(a)(1) would appear to extend the 180-day period in § 541(a)(5) to include the period between commencement of the Chapter 13 case and the time the case is closed, dismissed or converted. The court in In re Euerle,3 concluded that the Chapter 13 estate included a $300,000 inheritance received by the debtor after confirmation. Two bankruptcy courts separated by thousands of miles—in decisions separated by 16 years but involving the same debtor—both held that the Chapter 13 estate includes $1.3 million won by the debtor in a lottery before the petition when the prize was payable in installments during the cases.4 Another court held that money loaned to the Chapter 13 debtor by a relative became property of the Chapter 13 estate.5 There is some question whether money loaned to a Chapter 13 debtor would also be income for purposes of eligibility6 or for the disposable income test at confirmation.7


1  See 11 U.S.C. §§ 541(a)(1), 1306(a)(1).


2  11 U.S.C. § 541(a)(5)(A), discussed in § 45.1 [ What Is Property of the Chapter 13 Estate? ] § 46.1  What Is Property of the Chapter 13 Estate?.


3  70 B.R. 72 (Bankr. D.N.H. 1987).


4  Koonce v. McDonald (In re Koonce), 262 B.R. 850, 856 (Bankr. D. Nev. 2001) (“[T]he lottery prize payments payable after the petition was filed constitute property of the estate under 11 U.S.C. § 541(a)(1), as Koonce had a right to receive the payments as of the commencement of the case.”). Accord In re Koonce, 54 B.R. 643 (Bankr. D.S.C. 1985).


5  Doane v. Appalachian Power Co., 19 B.R. 1007 (Bankr. W.D. Va. 1982).


6  See § 8.1 [ What Is Regular Income? ] § 11.1  What Is Regular Income?.


7  See § 164.1 [ Projected (Disposable) Income ] § 91.2  Projected (Disposable) Income.