You are here:

Oil/Gas/oil royalities and bankruptcy chapter 13

Advertisement


Question
Please tell me if in a chapter 13 the monthly oil royalties will be counted as income and assets by a bankruptcy court? I have to file and do not want to lose my  oil & gas royalyities payments or I cannot pay my living expenses.

Answer
Michelle
I am not real familiar with bankruptcy proceedings but do believe that you are required to furnish a statement in regard to your assets and your income. I do not know if the oil and gas revenue is then attached to and used to pay your debtors but I don't know why they wouldn't be, just like any other income you have.
I do know some people have chosen to sell their mineral interest to a mineral buyer who basis their offer on the owner's proportionate share of lifetime revenue of the well, after that amount has been factored by a present day discount factor [because $1000 today is worth more than $1000 received over 5 years] so the owner can still enjoy the full value of their oil and gas asset in one lump sum at a time when they really need it.
You should look at this option with a credible mineral buyer if you are in this situation. Also when you sell your minerals it is only taxed at the long term capital gains tax rate of 20% while revenue received from a producing well is taxed at your ordinary income tax rate. Additionally you remove all the risk you have being a mineral owner (how long with the well produce, how good will it be, will the oil and gas prices continue to fall which directly affect the production revenue, etc).
I've been able to assist many people with this decision. Please visit my website to see what others have done.
Best of luck and I'm glad you asked!!  

Oil/Gas

All Answers


Answers by Expert:


Ask Experts

Volunteer


Laura M. FitzGerald, CPL

Expertise

PLEASE READ CAREFULLY BEFORE SUBMITTING A QUESTION. I can answer all questions related to oil and gas ownership, mineral interests and working interests concerning the leasing and selling of your minerals, any questions concerning pipeline ROW's, units with the Louisiana Department of Conservation; pooling provisions, depth limitations, vertical or horizontal pugh clauses; and oil and gas terminology. I can offer assistance in negotiating for leasing your property, assisting in locating owners of suspended funds or to receive the best offer for your oil and gas interests, should you desire to sell. I am only able to answer questions regarding oil and gas leases, minerals, royalties, or offers to purchase mineral/royalty interests if I have complete information. Please provide a full legal description for your interest(s). If the question pertains to a lease, please include all terms of any current (or desired) lease offers, including lease bonus amount, royalty and lease term. If the question is regarding a mineral or royalty interest offer to purchase, please provide the offer amount, date of offer, other offer terms, and further details on the mineral/royalty interest, such as lease terms, and if producing, the average monthly income. Since I receive numerous inquiries daily, I am only able to answer your questions efficiently and effectively if I have complete information. I must decline any questions submitted with incomplete information. If your question is non-technical in nature and you simply need assistance understanding an oil and gas matter, please submit your question with as much information and detail as possible. Any background information that has led to your question is also very helpful.

Experience

I have over 34 years experience as an Independent Petroleum Landman. I became a Landman after working as a paralegal for Oil & Gas Attorneys for 8 years. My first 2 years were spent specializing in Well History and Research with the Louisiana Department of Conservation, then moving into clearing title defects and handling title curative for oil and gas properties for the next 6 years. Subsequent thereto, I handled title issues, buying oil and gas leases and settling surface damages. I also acquired acreage for drilling prospects in excess of 10,000 acres. I also became a mineral/royalty owner commencing in 2004 and have found that I can help many people when they have reached the point in their lives they feel converting their minerals or royalties into a cash asset benefits them.

Organizations
American Association for Professional Landmen, ArkLaTex Assoc. of Professional Landmen, and Dallas Association of Professional Landmen (DAPL), Certified by the Women's Business Enterprise National Council (WBENC)- South. This certification is one of the most widely recognized and respected certifications in the nation. This designation is reserved for only those women-led businesses that exemplify the characteristics of integrity and professionalism to which the WBENC adheres to so strictly.

Education/Credentials
Attended LSU, became a Certified Professional Landman in 1994; Notary Public with dual authority in multiple parishes in North Louisiana; Bilingual in English and Greek

Awards and Honors
Expert Oil & Gas Professional assisting attorneys representing landowners. Involved in 2 lawsuits and both suits were awarded to the landowner. Ilios Resources, Inc. has been awarded the Best of Shreveport Oil and Gas Mineral Buyer Award for 2016, 2015, 2014, 2013 and 2012.

Past/Present Clients
Consultant Landman for Texas Oil & Gas (TXO Production Corp.), Anadarko Petroleum, Comstock Resources,Independent Geologists, Pipeline ROW Clients, and Oil & Gas Attorneys. For the past 5 years my practice is primarily an advocacy for the landowner. I also assist royalty owners recover suspended payments or incorrect royalty payments, or sell their mineral or royalty interest.

©2016 About.com. All rights reserved.