In an important victory for debtors, the Tenth Circuit today found that Social Security income is not included in the calculation of projected disposable income and that its exclusion cannot support a finding of bad faith. Anderson v. Cranmer (In re Cranmer), No. 12-4002 (10th Cir. Oct. 24, 2012). [Read more…] about Social Security Income Not Included in Projected Disposable Income
Arbitration vs. Bankruptcy
Finding, under the circumstances of the case, that the Federal Arbitration Act conflicts with the underlying purposes of the Bankruptcy Code, the Ninth Circuit upheld the denial of the creditor’s motion to compel arbitration where such arbitration would necessarily have resolved a core bankruptcy issue. In re Eber, No. 11-55341 (9th Cir. July 9, 2012). [Read more…] about Arbitration vs. Bankruptcy
Arbitration vs. Bankruptcy
The Ninth Circuit found that the creditor’s motion to compel arbitration was properly denied where arbitration would have resolved the core bankruptcy issue of dischargeability and, therefore, the Federal Arbitration Act conflicted with the underlying purposes of the Bankruptcy Code. In re Eber, No. 11-55341 (9th Cir. July 9, 2012). Specifically, the creditors sought arbitration to determine whether the debtor had committed fraud, breach of fiduciary duty, and willful injury, with respect to a contract for the construction and operation of a hair salon. The bankruptcy court denied the motion on the basis that findings on these issues would essentially decide the issue of whether the debts were nondischargeable under Sections 523(a)(2), (4), and (6) of the Bankruptcy Code. [Read more…] about Arbitration vs. Bankruptcy
Post-Petition Funds from 401(k) Loan Payoff May Not Be Voluntarily Contributed to Retirement Fund
In an opinion that strains to uphold the conclusion that the “core purpose” of BACPA is to “maximize[e] creditor’s recover[y],” the Sixth Circuit has held that “post-petition income that becomes available to debtors after their 401(k) loans are fully repaid is ‘projected disposable income’ that must be turned over to the trustee for distribution to unsecured creditors pursuant to § 1325(b)(1)(B) and may not be used to fund voluntary 401(k) plans.” Seafort v. Burden, No. 10-6248 (6th Cir. Feb. 15, 2012). The debtor appealed the Bankruptcy Appellate Panel’s reversal of the Bankruptcy Court’s decision in the debtor’s favor.
Seafort Opinion [Read more…] about Post-Petition Funds from 401(k) Loan Payoff May Not Be Voluntarily Contributed to Retirement Fund