Court Opinion

ID: 9398841
Source: CourtListenerOpinion
Date Created: 2023-06-01 15:01:36.422897+00
Date Added: 2024-06-11T17:19:36.882471
License: Public Domain

United States Bankruptcy Appellate Panel
                              For the Eighth Circuit
                       _______________________________

                               No. 22-6009
                       ___________________________

                         In re: MACHELE L. GOETZ,

                                             Debtor.

                       _______________________________

                              MACHELE L. GOETZ,

                                             Appellant

                                        v.

                   VICTOR F. WEBER, Chapter 7 Trustee,

                                         Appellee
                               ________________

                 Appeal from United States Bankruptcy Court
                    for the Western District of Missouri
                              ____________

                          Submitted: April 18, 2023
                             Filed: June 1, 2023
                               ____________

Before SHODEEN, RIDGWAY, AND HASTINGS, Bankruptcy Judges.
                         ____________

Hastings, Bankruptcy Judge.
      Debtor/Appellant Machele L. Goetz appeals the bankruptcy court’s 1 order
denying Goetz’s Motion to Compel Trustee to Abandon Real Property of Debtor.
For the following reasons, we affirm.

                                 BACKGROUND

       Goetz petitioned for bankruptcy relief under Chapter 13 of the Bankruptcy
Code on August 19, 2020. She valued her residence at $130,000 at the time, and the
parties stipulated that she claimed a $15,000 homestead exemption under section
513.475 of the Missouri Revised Statutes. On the petition date, Freedom Mortgage
held a $107,460.54 mortgage lien against the property. The parties agreed that there
would have been no proceeds in excess of the debt secured by the mortgage
lien, exemption and costs of sale had the Trustee liquidated Goetz’s residence
on the petition date.

       Goetz filed her Chapter 13 Plan on the same date she petitioned for bankruptcy
relief. The bankruptcy court confirmed her plan on October 16, 2020. Pursuant to
the confirmation order and 11 U.S.C. § 1327(b), property of the estate vested in
Goetz on confirmation.

      The bankruptcy court granted Goetz’s motion to convert from a Chapter 13
case to a Chapter 7 case on April 5, 2022. The parties agreed that the value of
Goetz’s residence increased from $130,000 to $205,000 between the petition date
and the conversion date. Between these dates, Freedom Mortgage’s mortgage lien
decreased to approximately $106,500. The parties stipulated that sale of Goetz’s
residence would result in more than $62,000 in proceeds after satisfying the
mortgage lien and paying the $15,000 homestead exemption and costs of sale.

       Prompted by indications that the Trustee planned to sell her residence, Goetz
filed a Motion to Compel Trustee to Abandon Real Property of Debtor. The
bankruptcy court denied the motion, finding that the increase in equity acquired

      1
      The Honorable Brian T. Fenimore, United States Bankruptcy Judge for the
Western District of Missouri.
                                         2
between the petition date and the conversion date is property of the Chapter 7
bankruptcy estate and concluding Goetz’s residence is worth more than
“inconsequential value and benefit to the estate” under 11 U.S.C. § 554. Goetz
appealed. With the consent of the parties, Amici Curiae National Association of
Consumer Bankruptcy Attorneys and National Consumer Bankruptcy Rights Center
filed a brief in support of Appellant, seeking reversal of the bankruptcy court’s order.

                                STANDARD OF REVIEW

       We review the bankruptcy court’s findings of fact for clear error and its
conclusions of law de novo. Ridings v. Casamatta (In re Allen), 628 B.R. 641, 642
(B.A.P. 8th Cir. 2021) (citing In re Zepecki, 277 F.3d 1041 (8th Cir. 2002)). “Where
the bankruptcy court has determined the factual predicates for abandonment are
present, we review the court’s decision and reverse only in the case of an abuse of
discretion.” Kaler v. Nelson (In re Nelson), 251 B.R. 857, 859 (B.A.P. 8th Cir.
2000). Under this standard, this Court will not reverse without a definite and firm
conviction that the bankruptcy court committed a clear error of judgment in
weighing the relevant factors and in reaching its conclusion. Id. (citations omitted).

                                   DISCUSSION

      The issues Goetz raises on appeal fall within two primary arguments. First,
she argues that the bankruptcy court erred in concluding that postpetition
preconversion market appreciation and an increase in equity resulting from
payments toward the mortgage lien inure to the estate’s benefit upon conversion
from a Chapter 13 case to a Chapter 7 case. The Amici Curiae join in this argument.
Second, she argues that her residence was removed from the bankruptcy estate when
the property vested in her on confirmation of her Chapter 13 plan or when she
exempted it, and she claims all equity accruing after these events inures to her
benefit.

                                           3
      A.    The bankruptcy court correctly concluded that postpetition
preconversion nonexempt equity resulting from market appreciation and
payments toward a mortgage lien accrue for the benefit of the bankruptcy
estate upon conversion from a Chapter 13 case to a Chapter 7 case.

       Section 541 of the Bankruptcy Code defines property of the bankruptcy estate
to include all of a debtor’s interests both equitable and legal, except those
specifically excluded. 11 U.S.C. § 541. Estate property includes “[p]roceeds,
product, offspring, rents, or profits of or from property of the estate, except such as
are earnings from services performed by an individual debtor after the
commencement of the case,” and “[a]ny interest in property that the estate acquires
after the commencement of the case.” 11 U.S.C. § 541(a)(6) and (7).

       Upon conversion from one chapter to another, this definition is adjusted.
Section 348 qualifies the scope of bankruptcy estate property by clarifying that
“property of the estate in the converted case shall consist of property of the estate,
as of the date of filing of the petition, that remains in the possession of or is under
the control of the debtor on the date of conversion[.]” 11 U.S.C. § 348(f)(1)(A). If
a debtor converts a case under Chapter 13 to a case under another chapter, the
property the debtor acquired between the petition date and the conversion date is not
property of the converted case, unless the debtor sought to convert the case in bad
faith. 11 U.S.C. § 348(f)(2).

      On the date Goetz petitioned for relief under Chapter 13, her residence became
property of the bankruptcy estate. The record shows no evidence of bad faith. Goetz
remained in possession and control of her residence throughout her Chapter 13 case
and on the date the bankruptcy court granted her motion to convert to a case under
Chapter 7. Her residence is property of the converted bankruptcy estate. The
question then becomes whether the increase in nonexempt equity resulting from
market appreciation ($75,000) and a reduction in the mortgage lien ($960) is estate
property or Goetz’s property.

                                          4
       As the bankruptcy court observed, courts are split on the question of whether
postpetition preconversion market appreciation or an increase in equity resulting
from payments toward a lien inures to a debtor’s benefit upon conversion to a
Chapter 7 case. Goetz urges this Court to treat the postpetition preconversion
increase in the value of her property as a separate interest that she acquired between
petition and conversion. This position is supported by some courts, which find that
postpetition appreciation in the value of an asset is a separate interest or “new equity”
that inures to a debtor’s benefit upon conversion to a Chapter 7 case. See, e.g., In re
Nichols, 319 B.R. 854, 856–57 (Bankr. S.D. Ohio 2004) (finding that postpetition
earnings used to “purchase” “new equity” in existing estate assets are not property
of the estate).

       Applying a slightly different rationale, some courts find that equity in excess
of exemptions should be determined as of the petition date and any equity accruing
after that date inures to the debtor. 2 These courts look to the legislative history for
section 348 and consider policy-based reasons supporting their conclusion that

      2
        See, e.g., Kendall v. Lynch (In re Lynch), 363 B.R. 101, 106 (B.A.P. 9th Cir.
2007) (finding that equity resulting from debtors’ postpetition payments on loans
secured by their residence and property appreciation inures to the debtors’ benefit
upon conversion from Chapter 13 to Chapter 7); In re Barrera, 620 B.R. 645, 653
(Bankr. D. Colo. 2020), aff’d 2020 WL 5869458 (B.A.P. 10th Cir. 2020) (finding
that a proper interpretation of “property” under section 348(f)(1)(A) “is the property
as it existed on the petition date, with all its attributes including the amount of equity
that existed on that date.” (emphasis in original)); Leo v. Burt (In re Burt), 2009 WL
2386102, at *5 (Bankr. N.D. Ala. July 31, 2009) (“Section 348(f)(1)(A) establishes
the original chapter 13 petition date as the date on which a hypothetical inventory is
to be conducted to determine what property will be in the estate of the converted
case. This Court is of the opinion that the amount of equity remaining after deducting
secured claims encumbering such property should also be determined based on the
secured claim outstanding on the petition date.” (footnote omitted)).

                                            5
equity created by a debtor’s plan payments or asset appreciation during the course
of the Chapter 13 case is not property of the estate.3

       Similar to the bankruptcy court in this case, other courts find that appreciation
is not a distinct asset but rather a characteristic or attribute of property subsumed
within a particular asset. 4 If the asset is property of the converted bankruptcy estate,
the increase in equity—whether by appreciation or reduction of encumbrances—is
also property of the estate, compelling these courts to conclude that postpetition
preconversion equity increases inure to the benefit of the estate.5

      3
       See In re Lynch, 363 B.R. at 106; In re Barrera, 620 B.R. at 653; In re Burt,
2009 WL 2386102, at *5; see also In re Cofer, 625 B.R. 194, 202 (Bankr. D. Idaho
2021).
      4
        See In re Goetz, 647 B.R. 412, 416–17 (Bankr. W.D. Mo. 2022); In re Adams,
641 B.R. 147, 151 (Bankr. W.D. Mich. 2022) (“The court regards the value of any
property as an attribute or incident of the property, not a separate right or interest in
the property.” (citation omitted); In re Castleman, 631 B.R. 914, 919 (Bankr. W.D.
Wash. 2021) (“Post-petition appreciation is not treated as a separate asset from pre-
petition property and inures to the bankruptcy estate, not the debtor.” (citations
omitted), aff’d 2022 WL 2392058 (W.D. Wash. 2022)); see also In re Hayes, No.
113, Case No. 15-20727, slip op. at 9, 14 (Bankr. D. Colo. Mar. 28, 2019) (“Equity
is merely a descriptive term for that portion of a debtor’s property which represents
value in excess of encumbrances. Thus, the Debtors’ legal interest in the Property as
of the Petition Date was the physical land and buildings comprising the Property.…
Because the entirety of the Property is property of the estate, the entirety of the
proceeds received from sale of the Property will be property of the estate, including
the portion representing an increase in Debtors’ equity from appreciation.”); In re
Goins, 539 B.R. 510, 516 (Bankr. E.D. Va. 2015) (“In the Court’s view, the cases
under Section 541(a)(6) are applicable because the equity attributable to the post-
petition appreciation of the property is not separate, after-acquired property, to
which we might look to Section 348(f)(1)(A). The equity is inseparable from the real
estate, which was always property of the estate under Section 541(a).”).
      5
       See In re Adams, 641 B.R. at 151; In re Castleman, 631 B.R. at 919; In re
Hayes, No. 113, Case No. 15-20727, slip op. at 9, 14; In re Goins, 539 B.R. at 516.

                                           6
       As these courts observed, section 348 does not specify whether postpetition
preconversion equity resulting from debt payments or appreciation due to market
conditions is property of the estate or property of the debtor. It simply refers to
“property of the estate” and provides that “property of the estate in the converted
case shall consist of property of the estate, as of the date of filing of the petition, that
remains in the possession of or is under the control of the debtor on the date of
conversion.” 11 U.S.C. § 348(f)(1)(A). When this statute is read in conjunction
with section 541 and case law interpreting it, “property of the estate” includes all
debtor’s interests, both legal and equitable, with some exceptions not applicable
here. See 11 U.S.C. § 541 (defining property of the estate). As we have previously
observed, “Nothing in Section 541 suggests that the estate’s interest is anything less
than the entire asset, including any changes in its value which might occur after the
date of filing.” Potter v. Drewes (In re Potter), 228 B.R. 422, 424 (B.A.P. 8th Cir.
1999) (relying on section 541 to conclude that postpetition preconversion equity
increases accrue to the benefit of the bankruptcy estate).6

       Goetz and the Amici Curiae insist that section 348(f) is ambiguous. They urge
the Court to consider legislative history, which they maintain supports their
argument that postpetition preconversion equity increases should benefit debtors.
We detect no ambiguity in sections 348(f) and 541. Even if we were to conclude
that section 348(f)(1)(A) is ambiguous, the legislative history of this statute does not
mandate a different outcome. 7 Section 348(f)(1)(A), as enacted, accomplished the

       6
       This conclusion is consistent with case law interpreting section 541 in the
context of a Chapter 7 case that has not been converted. In this context, courts
consistently find that an increase in nonexempt equity inures to the benefit of the
bankruptcy estate. See Coslow v. Reisz, 811 F. App’x 980, 984 (6th Cir. 2020);
Hyman v. Plotkin (In re Hyman), 967 F.2d 1316, 1321 (9th Cir. 1992); Schwaber v.
Reed (In re Reed), 940 F.2d 1317, 1323 (9th Cir. 1991); In re Lents, 644 B.R. 479,
489 (Bankr. D.S.C. 2022); In re Ostendorf, 2011 WL 1060992, at *1 (Bankr. D.
Neb. Mar. 23, 2011); In re Moyer, 421 B.R. 587, 594 (Bankr. S.D. Ga. 2007); In re
Shipman, 344 B.R. 493, 495 (Bankr. N.D. W. Va. 2006).
       7
       The House Judiciary Committee’s report on the Bankruptcy Reform Act of
1994 indicates that section 348(f)(1)(A) was enacted to:
                                             7
purpose of the legislation as articulated in the legislative history: it eliminated a
“serious disincentive to [C]hapter 13 filings” by adopting the reasoning of In re

      clarify the Code to resolve a split in the case law about what property
      is in the bankruptcy estate when a debtor converts from chapter 13 to
      chapter 7. The problem arises because in chapter 13 (and chapter 12),
      any property acquired after the petition becomes property of the estate,
      at least until confirmation of a plan. Some courts have held that if the
      case is converted, all of this after-acquired property becomes part of the
      estate in the converted chapter 7 case, even though the statutory
      provisions making it property of the estate do not apply to chapter 7.
      Other courts have held that the property of the estate in a converted case
      is the property the debtor had when the original chapter 13 petition was
      filed.

             These latter courts have noted that to hold otherwise would create
      a serious disincentive to chapter 13 filings. For example, a debtor who
      had $10,000 equity in a home at the beginning of the case, in a State
      with a $10,000 homestead exemption, would have to be counseled
      concerning the risk that after he or she paid off a $10,000 second
      mortgage in the chapter 13 case, creating $10,000 in equity, there would
      be a risk that the home could be lost if the case were converted to
      chapter 7 (which can occur involuntarily). If all of the debtor’s property
      at the time of conversion is property of the chapter 7 estate, the trustee
      would sell the home, to realize the $10,000 in equity for the unsecured
      creditors and the debtor would lose the home.

            This amendment overrules the holding in cases such as Matter of
      Lybrook, 951 F.2d 136 (7th Cir. 1991) and adopts the reasoning of In
      re Bobroff, 766 F.2d 797 (3d Cir. 1985). However, it also gives the
      court discretion, in a case in which the debtor has abused the right to
      convert and converted in bad faith, to order that all property held at the
      time of conversion shall constitute property of the estate in the
      converted case.

H.R. Rep. No. 103–835, at 57 (1994), as reprinted in 1994 U.S.C.C.A.N. 3340,
3366.

                                          8
Bobroff and specifying that property a debtor acquires postpetition is not property of
the converted bankruptcy estate. H.R. Rep. No. 103–835, at 57 (1994), as reprinted
in 1994 U.S.C.C.A.N. 3340, 3366; see 11 U.S.C. § 348(f)(1)(A); Bobroff v.
Continental Bank (In re Bobroff), 766 F.2d 797 (3d Cir. 1985). Section 348(f) does
not specify that debtors are entitled to retain equity resulting from payments during
the Chapter 13 case—the scenario referenced in the House Report. Likewise, the
statute does not address whether debtors are entitled to retain postpetition
preconversion equity resulting from market appreciation, asset improvements or
repairs. To accept Goetz’s argument, one must read this clarification into the statute.

       The plain meaning of a statute is conclusive, except in the “‘rare cases [in
which] the literal application of a statute will produce a result demonstrably at odds
with the intentions of its drafters.’” Waugh v. Internal Revenue Serv. (In re Waugh),
109 F.3d 489, 493 (8th Cir. 1997) (quoting United States v. Ron Pair Enters., Inc.,
489 U.S. 235, 242 (1989) (quoting Griffin v. Oceanic Contractors, Inc., 458 U.S.
564, 571 (1982)). “‘In such cases, the intention of the drafters, rather than the strict
language, controls.’” Bank of Mo. v. Fam. Pharmacy (In re Fam. Pharmacy), 614
B.R. 58, 66 (B.A.P. 8th Cir. 2020) (quoting Ron Pair, 489 U.S. at 242–43). Section
348(f) is clear and consistent with legislative intent. See 11 U.S.C. 348(f); see also
In re Castleman, 631 B.R. 914, 918–20 (Bankr. W.D. Wash. 2021); In re John, 352
B.R. 895, 903–04 (Bankr. N.D. Fla. 2006). Congress’s failure to address the
example included in the legislative history does not mean this omission was
inadvertent. Recognizing that statutes are often the result of compromise, we decline
to accept Goetz’s invitation to assume that Congress intended that debtors may retain
postpetition preconversion market appreciation and equity resulting from debt
payments without language articulating this intent.

       We also reject Goetz’s claim that interpreting section 348(f) to allow the
bankruptcy estate to benefit from postpetition preconversion estate property value
increases treats Goetz as though she converted her case in bad faith. To the extent
Goetz acquired new property after she petitioned for bankruptcy relief under Chapter
13, this property remains her property. In enacting section 348(f), Congress
distinguished between property of the estate at the time of conversion that remains
                                           9
in the possession or control of the debtor from property acquired after petition. The
former is property of the estate (Goetz’s residence), the latter is property of debtor
unless she converted in bad faith. The bad faith provision neither hinders nor
advances Goetz’s claim to the equity increase in her residence. It simply does not
apply. Accordingly, the bankruptcy court correctly concluded that postpetition
preconversion nonexempt equity accrues for the benefit of the converted Chapter 7
estate.

      B.    Goetz’s claim that she benefits from the increase in equity in her
residence because her residence was removed from the bankruptcy estate is also
rejected.

        Goetz claims she is entitled to the equity increase in her residence because the
residence was removed from the bankruptcy estate when she exempted it.
Alternatively, Goetz argues that her residence and any nonexempt equity in it vested
“in the debtor” upon confirmation under 11 U.S.C. § 1327(b) and the confirmation
order, removing it from the converted bankruptcy estate. She claims the appreciation
in her residence occurred after the property vested and she is entitled to retain this
value. Although the bankruptcy court did not specifically address these claims, it
implicitly rejected them when it declared, “There can be no question about whether
the residence is property of the converted chapter 7 estate—it is. And because the
post-petition equity in Goetz's residence is inseparable from the residence itself, the
post-petition equity is also property of the chapter 7 estate.” In re Goetz, 647 B.R.
412, 418 (Bankr. W.D. Mo. 2022). Neither party highlighted the bankruptcy court’s
failure to specifically address these arguments or requested remand due to this
omission. However, Goetz devoted many pages of her brief to them. Because these
arguments raise questions of law, we exercise our discretion to address them in the
first instance. 8

      8
       When a trial court neglects to address an issue, but the facts are undisputed,
the parties exclusively argue questions of law, and the review is de novo, appellate
courts may exercise discretion to decide legal issues in the first instance. See
Zaldivar Anzardo v. U.S. Att’y Gen., 835 F. App’x 422, 428 (11th Cir. 2020);
Bokenfohr v. Gladen, 828 F. App’x 485, 486, n.3 (9th Cir. 2020); Kistner v. L. Off.
                                          10
       Goetz’s reliance on section 1327 and the confirmation order to support her
claim that her residence is no longer property of the bankruptcy estate is misplaced.
While it is true that property vested in Goetz when the bankruptcy court confirmed
her Chapter 13 plan, neither section 1327(b) nor the relevant provision of the
confirmation order applies in the converted Chapter 7 case. See 11 U.S.C. § 103(j)
(“Chapter 13 of this title applies only in a case under such chapter.”); Harris v.
Viegelahn, 575 U.S. 510, 520 (2015) (“When a debtor exercises his statutory right
to convert, the case is placed under Chapter 7’s governance, and no Chapter 13
provision holds sway.”). Rather, section 348 governs the scope of estate property
upon conversion. See 11 U.S.C. § 348; In re Cofer, 625 B.R. 194, 198 (Bankr. D.
Idaho 2021) (“In sum, sound statutory interpretation and the relevant authorities
support the conclusion that the plain language of § 348(f)(1)(A) revests in the estate
of the converted case all property of the estate of the original filing still in the
possession or control of Debtor despite the provisions of § 1327.”). Because Goetz’s
interpretation ignores section 348(f)(A)(1), it is rejected.

       Her assertion that she removed her residence from the bankruptcy estate when
she claimed the homestead exemption is likewise rejected. Citing to stipulated facts,
Goetz maintains there was no value in her residence available to the bankruptcy
estate on the date she petitioned for bankruptcy relief. She asserts that any equity in
the residence was “removed” or “withdrawn” from the estate when she claimed her
homestead exempt and no interested party objected to the exemption. Citing cases
ruling that exempt property is not property of the estate, Goetz insists any increase
in equity between the petition date and the conversion date inures to her benefit
because the residence is no longer property of the estate.

of Michael P. Margelefsky, LLC, 518 F.3d 433, 438 (6th Cir. 2008); Hill v.
Peoplesoft USA, Inc., 412 F.3d 540, 544 n.* (4th Cir. 2005); Savard v. Rhode Island,
320 F.3d 34, 38 (1st Cir. 2003), on reh'g en banc, 338 F.3d 23 (1st Cir. 2003);
Roberts v. Van Buren Pub. Sch., 773 F.2d 949, 955 (8th Cir. 1985); see also Planned
Parenthood of Greater Wash. & N. Idaho v. U.S. Dep’t of Health & Hum. Servs.,
946 F.3d 1100, 1112 (9th Cir. 2020).

                                          11
       Goetz’s eligibility for the Missouri homestead exemption is determined as of
the date of the Chapter 13 petition. See Alexander v. Jensen-Carter (In re
Alexander), 236 F.3d 431, 433 (8th Cir. 2001). On the petition date, Goetz valued
her residence at $130,000. After deducting the $15,000 homestead exemption and
the debt secured by a mortgage lien, there remained $7,539.46 in equity. On the
conversion date, the value of the house increased to $205,000 and the debt against
the home decreased, leaving approximately $83,000 in equity. We are not convinced
that the sum of nonexempt equity in Goetz’s residence on the petition date governs
whether it is property of the estate or determines the value of the estate’s interest in
the property at the time she sought to compel abandonment of the property under
section 554.

        Section 513.475 of the Missouri Revised Statutes entitles Goetz to exempt a
house, appurtenances and land “not exceeding the value of fifteen thousand dollars”
that is used as a homestead. See Mo. Rev. Stat. § 513.475(1). The parties stipulated
that Goetz claimed and was entitled to a $15,000 homestead exemption. To the
extent the equity in this property is more than $15,000, it is not exempt. Stated
another way, section 513.475 entitles Goetz to “remove” from the estate only a
portion of the value of the homestead—equity in the maximum sum of $15,000. It
is not an in-kind exemption; it does not entitle Goetz to remove the dwelling house
and appurtenances, and the land in its entirety. As explained by the court in In re
Adams, “In effect, most exemptions which entitle a debtor to a representative value,
measured by former ownership of particular property, operate as a charge against
that property, much like a lien to secure payment of the specified amount, rather than
title to the thing itself.” 641 B.R. 147, 153 (Bankr. W.D. Mich. 2022); see generally
Schwab v. Reilly, 560 U.S. 770, 783–84, 794–95 (2010) (finding that under sections
522(5) and (6), the debtor may claim his aggregate interest in the business equipment
he sought to exempt, not the equipment per se and explaining that the estate may
preserve its right to retain any value in the equipment beyond the value of the exempt
interest). Accordingly, Goetz’s homestead exemption did not remove the residence
from the bankruptcy estate. Further, Goetz’s $15,000 homestead exemption was
consistent with the Missouri statutory limit and, therefore, facially valid. The

                                          12
Trustee’s failure to object to the exemption claim does not preclude him from
pursuing the nonexempt equity. See Schwab, 560 U.S. at 774 (noting that because
the exemption was facially valid, the Trustee was not compelled to object “to
preserve the estate’s ability to recover value in the asset beyond the dollar value the
debtor expressly declared exempt.”).

        Importantly, this dispute arises in the context of a motion to compel
abandonment. The use of present tense in the text of section 554 suggests courts
must consider the current value or benefits of the property sought to be abandoned.
See 11 U.S.C. § 554(b) (“On request of a party in interest and after notice and a
hearing, the court may order the trustee to abandon any property of the estate that is
burdensome to the estate or that is of inconsequential value and benefit to the
estate.”) (emphasis added); see also Coslow v. Reisz, 811 F. App’x 980, 984 (6th
Cir. 2020); In re Adams, 641 B.R. at 152–53. Also, section 554 “says nothing about
looking to the ‘commencement of the case’ to determine value” and “every court
confronted with an analogous abandonment dispute has looked to the equity
contained in the debtor’s property at the time the abandonment motion came before
it, rather than at some static moment in the past.” Coslow, 811 F. App’x at 984
(citation omitted). Consequently, Goetz’s claim that her homestead exemption claim
limited the estate’s interest in her residence to its value on the petition date is not
persuasive.

                                  CONCLUSION

       For the reasons stated, the bankruptcy court correctly concluded that the
postpetition preconversion equity increase in Goetz’s residence is property of the
bankruptcy estate. The parties stipulated that sale of Goetz’s residence would result
in more than $62,000 in proceeds after satisfying the mortgage lien and paying the
$15,000 homestead exemption and costs of sale. The bankruptcy court’s
determination that this sum is “of more than inconsequential value and benefit to the
estate” was not an abuse of discretion. We affirm the bankruptcy court’s decision
to deny Goetz’s Motion to Compel Trustee to Abandon Real Property of Debtor.

                       ______________________________
                                          13