Giving to One's Church After Declaring Bankruptcy
Bankrupt donors can use disposable income for tithing provided requirements are met.

Background. Kevin and Tina are a young couple who were married a few years ago. Shortly after their marriage, Tina quit her practice of "tithing" to her church. Kevin was not a member of any church, and so he had never made any church contributions. Kevin and Tina had a premature baby, which resulted in substantial medical bills that were not fully covered by insurance. Tina's church provided the couple with funds to help them pay their phone bills and utility bills. Because of this assistance by the church in their time of need, Kevin joined his wife's church and began tithing a portion of his income to the church. A few months later, the couple filed for bankruptcy protection under chapter 13 of the bankruptcy law. Under chapter 13 (also known as a "wage earner's plan"), the debtor continues to work and applies all "disposable income" to the payment of debts. Kevin and Tina's plan called for monthly plan payments of $365 for 39 months. Unsecured, nonpriority creditors received nothing under the plan. The bankruptcy trustee objected to the plan on the ground that the couple was not applying all of their disposable income to their debts. In particular, the trustee noted that the couple planned on making monthly contributions of $234 to their church, which amounted to 7% of Kevin's gross income. Kevin conceded that tithing is not required as a condition of membership in his church, but is "strongly recommended." Kevin claimed that his charitable contributions will result in "raises and bonuses" in his employment, since "the more I give the more I will receive."

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Posted: September 3, 2001
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