SONIA M BENITEZ LAJARAS

1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
IN THE UNITED STATES BANKRUPTCY COURT FOR
THE DISTRICT OF PUERTO RICO
IN RE:
SONIA M BENITEZ LAJARAS 	CASE NO. 10-04613 BKT
Chapter 13
XXX-XX-1868
FILED & ENTERED ON 03/28/2011
Debtor(s)
OPINION AND ORDER
This proceeding is before the Court upon the Debtor’s Response to Order and Submit
Memorandum of Law [sic] [Dkt. No. 33] and the trustee’s Objection to Confirmation of Plan [Dkt
No. 34].
I. FACTUAL BACKGROUND
The Debtor filed a voluntary Chapter 13 petition on May 28, 2010. 	Part of the estate listed
in the Debtor’s schedules includes a usufruct interest in certain property that the Debtor received as a
result of an intestate inheritance. On June 29, 2010, Debtor filed a proposed Chapter 13 Plan. The
trustee objects to the confirmation of the proposed plan under 11 U.S.C. § 1325(a)(4) (the “best
interest of creditors test”) because it fails to include the value of the usufruct, which, he alleges, is a
quantifiable interest of the debtor in property that should be included in the estate under 11 U.S.C. §
541(a)(1). The Debtor responds that the usufruct is not an interest of the Debtor under § 541(a)(1)
Case:10-04613-BKT13 Doc#:37 Filed:03/28/11 Entered:03/28/11 14:58:28 Desc: Main
Document Page 1 of 3

2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
since the lineal heirs of the deceased have the right to decide whether to satisfy the surviving
spouse’s share with a cash payment or an equitable interest in property, and thus the plan need not
account for it.
This Court has jurisdiction over the subject matter and the parties pursuant to 28 U.S.C.
§§1334 and 157(a) and the General Order of referral of Title 11 Proceedings to the United States
Bankruptcy Court for the District of Puerto Rico dated July 19, 1984 (Torruella, C.J.).
II. LEGAL ANALYSIS AND DISCUSSION
To satisfy the “best interests of creditors test” of 11 U.S.C. § 1325(a)(4), a Chapter 13 plan
must provide for payment to each allowed unsecured claim holder of no less than the amount such
holder would be paid on such claim if the Debtor’s estate was liquidated under Chapter 7. Thus, the
estate’s liquidation value must be evaluated to establish whether the proposed plan satisfies this test.
In a hypothetical Chapter 7 scenario, the Chapter 7 Trustee would collect and liquidate all non-
exempt property of the estate. 11 U.S.C. § 704(a)(1). It is undisputed that the Debtor’s estate in the
instant case encompasses her statutory share of her deceased husband’s estate. The parties do not
agree, however, on whether the Debtor’s usufruct interest in her deceased spouse’s intestate estate
should be included in her bankruptcy estate.
Under the laws of the Commonwealth of Puerto Rico, a usufruct inherited by a surviving
spouse may be conveyed should the heirs be unable to agree upon the manner in which the surviving
spouse’s share should be satisfied. 31 L.P.R.A. § 2415. In such situations, the value of the usufruct
may be calculated for the purposes of determining and satisfying the statutory share of a deceased
spouse’s estate. Id.; Calimano Diaz v. Rovira Calimano, 113 D.P.R. 702, 704. Because the widow
Case:10-04613-BKT13 Doc#:37 Filed:03/28/11 Entered:03/28/11 14:58:28 Desc: Main
Document Page 2 of 3

3
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
usufruct in this case is a non-exempt interest whose value may be determined under applicable state
law, it must be included in the estate under 11 U.S.C. § 1325(a)(4) before a Chapter 13 plan may be
confirmed.
Having found that the usufruct is a quantifiable, non-exempt interest of the Debtor in
property, the Court SUSTAINS the trustee’s objection to confirmation [Dkt. No. 34]. 	A
confirmation hearing is hereby scheduled for May 26, 2011 at 9:00a.m. The parties are ordered to
inform the Court if an agreement to assign a value to the widow usufruct is reached and file an
informative motion ten (10) days prior to the confirmation hearing.
SO ORDERED.
San Juan, Puerto Rico this 28 day of March, 2011.
Brian K. Tester
U.S. Bankruptcy Judge
Case:10-04613-BKT13 Doc#:37 Filed:03/28/11 Entered:03/28/11 14:58:28 Desc: Main
Document Page 3 of 3