Debtor has trouble keeping vacation property in Mass. bankruptcy case

A bankruptcy case heard in Boston this past summer might make it more difficult for Massachusetts debtors to hold on to vacation property if they are filing a Chapter 13 bankruptcy case.

In the Turner case, bankruptcy judge William C. Hillman ruled that the married debtors couldn’t make $430 in monthly payments on thier hunting cabin in Maine, because their Chapter 13 plan didn’t pay anything to unsecured creditors, and a hunting cabin isn’t necessary for the financial rehabilitation of the debtors.

In other words, if the Turners want to get the benefits of a Chapter 13 case, they are going to have to let go of the vacation property.

Judge Hillman says this is so even considering the rather decrepit state of the cabin, which lacked amenities like running water and phone service.

The result might be different in a different case, however, where they debtor could show the vacation property was capable of being rented out for income, or where the debtors are able to propose a plan that pays a substantial dividend to unsecured creditors.


By Doug Beaton

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