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• Can a debtor who files a "Chapter 13" bankruptcy plan continue to make monthly contributions to his church? No, concluded a federal district court in Florida. The debtor filed a plan under which he proposed to pay only $50 per month for three years (a total of $1,800) against $90,000 in unsecured debts. The plan reflected monthly take-home pay of $1,150 out of which the debtor donated $160 to his church. Under federal law, a bankruptcy court need not confirm a Chapter 13 plan over the objection of the bankruptcy trustee unless the plan provides that all of the debtor's "projected disposable income" over the next three years "will be applied to make payments under the plan." The bankruptcy trustee objected to the debtor's plan, arguing that by making the monthly contributions of $160 to his church the debtor was not applying all of his "disposable income" toward the payment of his ...

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Posted:
  • November 1, 1989