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Bankruptcy and Tithing

Can bankrupt church members continue to give?


• A federal court in Utah ruled that a church member's bankruptcy plan could not be approved since he proposed to "tithe" or give 10% of his income to his church. The church member had debts of $50,000 and an annual household income of $25,000. He filed a "Chapter 13" wage-earners bankruptcy plan, under which he agreed to pay his creditors 20% of their debts. A creditor objected to the proposed plan on the ground that it listed the church member's tithe to his church as a reasonably necessary living expense not available for distribution to creditors. Chapter 13 of the bankruptcy law requires that all of a debtor's "disposable income" be made available for distribution to creditors, except an amount that is reasonably necessary for living expenses. The church member claimed that he believed tithing to be mandatory rather than optional. He testified that tithing "is a commandment from ...

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Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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  • July 1, 1992

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