The consumer bankruptcy world is watching closely as a critical issue heads to the U.S. Supreme Court in Bronitsky v. Saldana. The case, now pending in a petition for certiorari, asks whether Chapter 13 debtors may continue contributing to retirement accounts at the expense of unsecured creditors. The Ninth Circuit said yes. The petitioning Chapter 13 trustee says absolutely not. And the National Consumer Bankruptcy Rights Center (NCBRC) is paying close attention.
If the Court grants certiorari, NCBRC stands ready to join the fight directly.
The Legal Issue: Retirement Savings vs. Creditor Recovery
At the heart of the case is whether Chapter 13 debtors can exclude voluntary retirement contributions from their “disposable income”—the income they would otherwise use to pay unsecured creditors under their repayment plans.
The Ninth Circuit’s decision in favor of debtor Jorden Saldana held that under 11 U.S.C. § 541(b)(7), such retirement contributions are not disposable income. This aligns with a growing body of appellate decisions recognizing Congress’s intent to shield retirement savings—even for debtors still actively contributing post-petition.
However, the trustee argues this interpretation enables debtors to prioritize future savings over present obligations, potentially leaving creditors with nothing. According to the trustee’s cert. petition, the ruling “creates a stark conflict” with other circuits and “throws the Chapter 13 system into chaos.”
Saldana – Trustee’s Petition for Cert
Saldana – Trustee’s Reply Brief
The Debtor’s Response: No Circuit Split, No Cert Needed
Saldana’s legal team pushed back forcefully, noting that every circuit to reach the question—including the Sixth—allows continued contributions when the debtor had contributed pre-petition. The Ninth Circuit merely affirmed that right. The debtor argues there is no true circuit split, especially not one warranting Supreme Court intervention.
The debtor also points out that the trustee never disputed Saldana’s history of contributions, nor contested her evidence. The core disagreement, then, isn’t about facts—it’s about how § 541(b)(7) should be read.
Debtor’s Brief in Opposition to Pet for Cert
Why This Case Matters
If the Supreme Court takes the case, the outcome could reverberate across every Chapter 13 court in the country. The petition’s logic would effectively ban all voluntary retirement contributions during a plan, drastically reducing flexibility for low- and middle-income debtors trying to maintain long-term financial stability.
More than 180,000 Chapter 13 cases are filed annually. A decision restricting retirement contributions could disproportionately harm older workers and financially precarious families who rely on steady retirement savings to avoid future insolvency.
NCBRC’s Role: Ready to Engage
NCBRC is currently monitoring the petition and has assisted the debtor’s legal team in shaping the response. If the Court grants certiorari, NCBRC will step in directly, likely through a joint amicus effort alongside key consumer advocacy organizations. The goal: ensure that the debtor’s fresh start includes the ability to save for retirement and avoid punishing choices between dignity in old age and minimal creditor returns today.
Stay tuned. This case could redefine the balance between creditor recovery and debtor rehabilitation—and NCBRC is prepared to make sure the scales remain fair.