Posted by NCBRC - January 31st, 2023
A chapter 13 debtor’s statutory right to dismiss his bankruptcy is not precluded by bad faith or ineligibility under section 109(e). Powell v. TICO Construction Co. Inc., No. 22-1014 (B.A.P. 9th Cir. Oct. 21, 2022).
TICO Construction, a judgment creditor in the debtor’s chapter 13 case, opposed the debtor’s motion to voluntarily dismiss his bankruptcy under section 1307(b). TICO alleged both that the debtor’s unsecured debts exceeded the debt limit set forth in section 109(e), and that the debtor abused by the bankruptcy process by transferring non-exempt assets to his ex-wife in “sham” divorce proceedings. TICO requested that, instead of granting the debtor’s motion to dismiss, the court should convert the case to chapter 7 or 11. Read More
Posted by NCBRC - March 18th, 2022
Certain dollar amounts in the U.S. Bankruptcy Code will increase effective April 1, 2022, pursuant to 11 U.S.C. §104. On February 4, 2022, the Judicial Conference of the United States announced and detailed these changes in The Federal Register. See Adjustment of Certain Dollar Amounts in the Bankruptcy Code, 87 Fed. Reg. 6625 (February 4, 2022).
Changes relevant to consumer bankruptcy attorneys include:
- 11 U.S.C. § 109(e) (debt limits for chapter 13):
- The unsecured debt cap has increased from $419,275 to $465,275.
- The secured debt cap has increased from $1,257,850 to $1,395,875.
- 11 U.S.C. § 522(d) (federal exemptions):
- Section 522(d)(1) (homestead exemption) has increased from $25,150 to $27,900.
- Section 522(d)(2) (motor vehicle exemption) has increased from $4,000 to $4,450.
- Section 522(d)(3) (household goods etc. exemption) has increased from $625 to $700 for value in any particular item and from $13,400 to $14,875 in aggregate value.
- Section 522(d)(4) (jewelry) has increased from $1,700 to $1,875.
- Section 522(d)(5) (unused amounts from 522(d)(1)) has increased from $1325 to $1,475 for value in any particular item and from $12,575 to $13,950 in aggregate value.
- 11 U.S.C. § 522(n) (Exemption cap for certain individual retirement accounts) has increased from $1,362,800 to $1,512,350.
- 11 U.S.C. § 707(b)(2)(A)(i)(Means Test) – CMI is not less than the lesser of –
- Section 707(b)(2)(A)(i)(I) 25% of unsecured claims or $9,075 (up from $8,175) or
- Section 707(b)(2)(A)(i)(II) $15,150 (up from $13650).
- Section 707(b)(2)(A)(ii)(IV) (necessary dependent school expenses) has increased from $2,050 to $2,275.
- Section 707(b)(6)(C) (to calculate median income for family greater than 4) the amount per additional family member has increased from $750 to $825.
Posted by NCBRC - February 10th, 2022
In the face of a good faith challenge to the debtors’ eligibility for chapter 13 bankruptcy under section 109(e), the bankruptcy court considered evidence beyond the debtors’ schedules and conducted its own eligibility calculation. In re Beach, 2022 Bankr. LEXIS 313, Case no. 21-10762 (Bankr. D. N.M. Feb. 7, 2022). Read More
Posted by NCBRC - October 9th, 2018
A debtor who exceeds the debt limit specified in section 109(e) is ineligible for chapter 13 bankruptcy regardless of the nature of the debts and, therefore, there is cause for dismissal or conversion. Stearns v. Pratola (In re Pratola), No. 18-213 (N.D. Ill. Aug. 31, 2018).
Christopher Pratola filed a chapter 13 bankruptcy petition listing unsecured debts at less than the debt limit set forth in section 109(e). He later amended his schedules to include an additional federal student loan debt which he was repaying under an IBR at 10%. That loan raised his unsecured debt to above the debt ceiling. Read More
Posted by NCBRC - February 9th, 2018
A court is not required to dismiss a chapter 13 case where the debtor’s student loan debt causes his total unsecured debts to exceed the statutory debt cap. In re Pratola, 578 B.R. 414 (Bankr. N.D. Ill. Dec. 27, 2017), appeal filed, Stearns v. Pratola, Case No. 1:18-cv-213 (N.D. Ill. filed Jan. 11, 2018). Read More
Posted by NCBRC - August 7th, 2013
NACBA has moved for leave to file an amicus brief in the Third Circuit case of In re Scotto DiClemente, No. 12-3336. That case involves the question of how underwater mortgages are counted toward the debt limits when the chapter 13 debtor’s personal liability on the mortgages was discharged in a previous chapter 7 bankruptcy. Read More
