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Seventh Circuit Affirms: Chapter 13 Plans May Pay Debtor’s Counsel Before Nonpriority Unsecured Creditors

Court Rejects City of Chicago’s Bid to Subordinate Attorney’s Fees to General Unsecured Claims In a published opinion, the Seventh Circuit affirmed the confirmation of two below-median Chapter 13 plans that provided for payment of the debtor’s attorney fees ahead of distributions to nonpriority unsecured creditors. In In re Falkner, Nos. 25-2878 & 25-2879 (7th […]

Attorney fees

Tags: attorney’s fees, bankruptcy, reasonably necessary expense

June 11, 2026

Falkner – Appellant’s Brief

Falkner – Appellees brief

Amicus Brief – Falkner City of Chicago

7th Circuit Opinion – Falkner

Unanimous Supreme Court Adopts Totality-of-the-Circumstances Test for Bankruptcy Judicial Estoppel

NCBRC, NCLC, and NACBA Urged a Narrow, Equitable, Fact-Specific Inquiry In a unanimous decision authored by Justice Jackson, the United States Supreme Court held that courts deciding whether a debtor’s failure to disclose a claim in bankruptcy was “inadvertent or mistaken”—for purposes of judicial estoppel—must look to the totality of the circumstances surrounding the omission. […]