KEVIN R. HUENNEKENS, Bankruptcy Judge.
Before the United States Bankruptcy Court for the Eastern District of Virginia (the "Court") is the Motion for Allowance of Debtor's [sic] Exemption Request and Chapter 7 Trustee Abandonment of Proceeds [ECF No. 56] (the "Motion to Compel") filed by James Lee Love and Marciel Love ("Mrs. Love" and together with James Lee Love, the "Debtors"). For the reasons set forth below, the Court holds that the personal injury claim of Mrs. Love is not property of the Debtors' bankruptcy estate and denies the Motion to Compel.
The Court has subject-matter jurisdiction over this proceeding pursuant to 28 U.S.C. §§ 157 and 1334 and the General Order of Reference from the United States District Court for the Eastern District of Virginia dated August 15, 1984. This is a core proceeding under 28 U.S.C. § 157(b)(2)(A) and (B). Venue is appropriate in this Court pursuant to 28 U.S.C. § 1408.
The Debtors commenced this bankruptcy case by filing a voluntary, joint petition for relief under chapter 13 of title 11 of the United States Code (the "Bankruptcy Code") on September 25, 2015 (the "Petition Date"). Almost two years after the Petition Date, Mrs. Love was involved in an automobile accident.
Mrs. Love was able to negotiate a settlement of her Personal Injury Claim with "[t]he defendant insurance company."
On April 29, 2019, the Chapter 7 Trustee filed the Trustee's Objection to Debtors [sic] Exemption of Personal Injury Claim [ECF No. 54] (the "Objection to Exemption"), contending that "[u]pon the reopening of the case to list the personal injury claim, it became property of the bankruptcy estate, [and the Personal Injury Claim could] only be asserted by the trustee unless abandoned by the trustee."
Both the Debtors' Motion to Compel and the Chapter 7 Trustee's Objection to Exemption assume that Mrs. Love's post-Petition Date, pre-Conversion Date Personal Injury Claim constitutes property of the Debtors' bankruptcy estate. A debtor may convert a chapter 13 case "to a case under chapter 7 of this title at any time." 11 U.S.C. § 1307(a). Once a chapter 13 case is converted to chapter 7, "property of the estate in the converted case [consists] 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."
By the Motion to Compel, the Debtors request that the Court order the Chapter 7 Trustee to "abandon debtor's personal injury proceeds and allow [the] personal injury exemption of $20,000.00." Mot. Compel 1. The Chapter 7 Trustee is simply not able to abandon property that is not part of the Debtors' bankruptcy estate.
The Chapter 7 Trustee seeks an order denying the Debtors' claimed exemption in the Personal Injury Claim. "[A]n individual debtor may exempt from property of the estate the property listed in either paragraph (2) or, in the alternative, paragraph (3) of this subsection." Id. § 522(b)(1). As the Personal Injury Claim is not property of the estate, it need not be exempted. Accordingly, the Objection to Exemption must be overruled.
The Court concludes that the Personal Injury Claim, acquired by Mrs. Love after the Petition Date but prior to the Conversion Date, is not property of the Debtors' bankruptcy estate under section 348(f)(1)(A) of the Bankruptcy Code. Because the Personal Injury Claim is not property of the estate, the Debtors need not not exempt it. Nor, for the same reason, may the Chapter 7 Trustee administer it. There is nothing for the Chapter 7 Trustee to abandon. The Debtor is entitled to the full amount of the settlement proceeds realized from the Personal Injury Claim.
A separate Order shall issue.