When a non-debtor spouse of a debtor is in a bankruptcy proceeding, does the debtor have any interest in property that would have been part of the debtor's estate?

federal, United States of America

The following excerpt is from In re Keller, 185 BR 796 (B.A.P. 9th Cir. 1995):

As noted above, the trustee may recover a preferential transfer only where the transfer was of "an interest of the debtor in property." Such property "is best understood as that property that would have been part of the estate had it not been transferred before the commencement of bankruptcy proceedings." Begier v. Internal Revenue Service, 496 U.S. 53, 58, 110 S.Ct. 2258, 2263, 110 L.Ed.2d 46 (1990). Thus, when analyzing questions regarding the distribution of property of a dissolved marital estate involving a non-debtor spouse, the trial court must determine whether the property at issue is or could be considered property of the debtor's estate. Matter of Paderewski, 564 F.2d 1353, 1356 (9th Cir.1977).8 The focus should be not on what interest the transferee received, but rather on the interest, if any, of the debtor in the property. Id. at 1357.

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