The Seventh Circuit Considers Whether a Chapter 13 Trustee May Take A Fee If the Case is Dismissed Pre-Confirmation

Posted by Jim Haller - November 14, 2023

The Seventh Circuit, in the case of In re Johnson, Case No. 23-2212 (7th Cir. 2023), accepted a direct appeal from the Bankruptcy Court for the Northern District of Illinois.  The bankruptcy court held that a chapter 13 trustee may not deduct her fee if a chapter 13 case is dismissed without having a plan confirmed. The court adopted the reasoning in Goodman v. Doll (In re Doll), 57 F.4th 1129 (10th Cir. 2023).

At present, two courts have affirmed that a trustee may not deduct a fee if the chapter 13 case is dismissed prior to confirmation. In addition to the Doll opinion, the Ninth Circuit agreed in Evans v. McCallister (In re Evans), 69 F.4th 1101 (9th Cir. 2023).  The Doll decision is currently being considered for certiorari by the Supreme Court.  Another case is pending on this issue in In re Soussis, Case No. 22-155 (2nd Cir. 2023).

NCBRC and NACBA filed an amicus brief in support of the Debtor/Appellee.  NCBRC NACBA Filed Amicus Brief – In re Johnson


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