Is a debtor's interest in a pending cause of action considered abandoned by the bankruptcy trustee?

California, United States of America


The following excerpt is from Hill v. Law Offices of Beatrice L. Snider, APC, D071656 (Cal. App. 2019):

however, a debtor's interest in a pending cause of action may revert back to the debtor at the conclusion of the bankruptcy case. For example, if a cause of action is listed in the debtor's bankruptcy schedules, and the bankruptcy trustee does not otherwise administer it, the cause of action is "abandoned" to the debtor when the bankruptcy case ends. (See 11 U.S.C. 554(c); Cusano v. Klein (2001) 264 F.3d 936, 945 (Cusano).) But, if a debtor does not properly schedule a cause of action or other asset, it will not be automatically abandoned by the trustee and it remains in the bankruptcy estate. (Cusano, at pp. 945-946.)

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