In re Key, 465 B.R. 709

Key inherited four properties from his mother more than 180 days after Debtors filed their chapter 13 petition; Hammond Avenue is valued at $39,294 by taxing authorities and is encumbered by a balloon loan maturing in 2011, with foreclosure imminent; Debtors amended Schedules A, I, and J to disclose the properties and their proposed plan funding; Debtors seek an order for Key to incur debt not to exceed $21,445.77 with monthly payments up to $338.28 for 35 months at 7.5% interest to renovate and rent the Hammond Avenue property; Key testified renovation costs for Hammond Avenue exceed $10,000 and may take about a year, and the other properties also require major repairs or demolition; one other property is encumbered by a loan to a different lender; combined value of the four properties is likely less than the debt owed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether post-petition inheritance is estate property	Trustee argues §1306(a)(1) includes post-petition inheritance	Key argues §541(a)(5) excludes inheritances received after 180 days	Not property of the estate
Whether Debtors may incur debt to renew the mortgage	Trustee says debt is unnecessary and depletes funds for creditors	Debtors claim need to perform plan and renovate for rent	Motion denied

In re Schlottman, 319 B.R. 23 (Bankr.M.D.Fla.2004) (supports interplay of §1306 with §541(a)(5) exclusions)
In re Egan, 458 B.R. 836 (Bankr.E.D.Pa.2011) (discusses §1306(a)(1) incorporating §541 while respecting §541(a)(5) time limits)
In re Wetzel, 381 B.R. 247 (Bankr.E.D.Wis.2008) (an inheritance post-petition case cited for estate boundaries)
In re Drew, 325 B.R. 765 (Bankr.N.D.Ill.2005) (cases denying post-petition debt where not necessary for plan)
In re Nott, 269 B.R. 250 (Bankr.M.D.Fla.2000) (denial of debt incursion for speculative gains)