In a rising real estate market, chapter 13 debtors risk losing their homes if they sell or convert to chapter 7.
A secured lender who doesn’t file a claim doesn’t get paid by the chapter 13 plan and keeps its lien, but can’t reclaim the collateral during the life of the plan.
The Code and the Rules are unclear about a chapter 13 debtor’s obligation to disclose assets acquired post-petition that were not derived from income.
Courts are deeply split on a chapter 13 debtor’s ability to keep the appreciation in an exempt home, whether or not the case converts to chapter 7.