Bankruptcy – Chapter 13 Plan Payments

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7^th Circuit Court of Appeals

Case Name: Marilyn O. Marshall v. Denise L. Blake

Case No.: 17-2809

Officials: BAUER, FLAUM, and MANION, Circuit Judges

Focus: Bankruptcy – Chapter 13 Plan Payments

Appellee Denise L. Blake is a below‐median income debtor who filed for Chapter 13 bankruptcy. In her proposed bankruptcy plan, Blake sought to retain her annual earned income tax credit and a portion of her tax over‐withholdings. Trustee Marilyn O. Marshall objected to confirmation of Blake’s plan, arguing that Blake is required to turn over her entire tax refund for use as additional plan payments. The bankruptcy court confirmed the plan over Marshall’s objection. In doing so, it agreed with Marshall that tax credits are income under the Bankruptcy Code that must be taken into account when calculating the debtor’s projected disposable income for plan payments. However, the bankruptcy court held that Blake could retain her tax refund if she prorated it as monthly income and offset it with reasonably necessary expenses to be incurred throughout the year. The bankruptcy court certified the case for direct appeal to this court. We affirm.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.