9th Circ. Backs Pro-Creditor View Of Ch. 7 Collateral

Law360, New York (June 21, 2012, 6:14 PM EDT) -- A Chapter 7 creditor may seize personal property that's pledged to it as collateral and not shielded by the debtor, even if the property isn't listed in a schedule of pledged assets filed with the bankruptcy court, the Ninth Circuit said Thursday in a precedential decision.

The appeals court ruling backed a May 2011 finding by the Ninth Circuit’s Bankruptcy Appellate Panel that clarified the meaning of section 521(a)(2) of the federal bankruptcy code. The section allows a Chapter 7 debtor to file a statement with...
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