Texas Bankruptcy Resources - Debt Consolidation

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Debt Consolidation Services and Information:

1. Debt Consolidation - refresh.

Recent Chapter 13 Procedure For Plan Confirmation By Texas Bankruptcy Courts

In re LeBlanc, Case Number 03-50477-RLJ-13 in the Texas Bankruptcy Court for the Northern District, Lubbock Division, decision rendered May 11, 2004. FACTS: The husband and wife jointly proposed a 44 month Chapter 13 plan for partial repayment of debts owed. The plan further provided for approximately 36.39% payment upon unsecured debts. The total net monthly income of both spouses was undisputed in the amount of $6,588.76. Based on reported monthly living expenses of $4,753.93, the plan required a payment of $1,820 per month. This payment resulted in 27.6% of their net monthly income applied to debts. Thereafter, the Chapter 13 trustee objected to confirmation because the plan "fails to dedicate all the LeBlanc's projected disposable income for the forty-four month plan term." Further, the Chapter 13 trustee argued living expenses submitted were excessive for a family of four, and specifically, excepted monthly grocery expenses in the amount of $800 per month, apparel expense of $150, and life insurance premium payment of $220 naming a disabled child as beneficiary. HELD: The Texas Bankruptcy Court for the Northern District, Lubbock Division decided for the Chapter 13 trustee. RATIONALE: When a Chapter 13 trustee or unsecured creditor objects to conformation, debtors must prove the plan must dedicates all of the debtor's estimated disposable income for at least three years. 11 USC 1325(b)(1)(B). The Texas Bankruptcy Court concluded, based solely upon the trustee contention, that the debtor's previous month's receipts for food expenditures, apparel and insurance constituted only "some evidence the debtors purchase food" but did not prove the necessity of purchases. Therefore, these expenses were considered unreasonable.

Recent Notable Opinions of the Supreme Court of The United States:

Household Credit Services, Inc. v. Pfennig, No. 02-857 (2004), Argued February 23, 2004, Decided April 21, 2004, CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT. The Truth in Lending Act (TILA) regulates disclosures credit card issuers must provide consumers and authorizes a personal cause of action for consumers based on noncompliance. 15 U.S.C. 1637(a). These disclosures must include the amount of any finance charge. 1637(b)(4). A finance charge is defined as an amount "payable directly or indirectly by the consumer, and imposed directly or indirectly by the creditor as an incident to the extension of credit." 15 U.S.C. 1605(a). Nevertheless, the Federal Reserve Board definition under Regulation Z is inconsistent by "defining a finance" charge as excluding "charges for exceeding a credit limit" (over-limit fees). Held: Regulation Z is not an unreasonable interpretation of 15 U.S.C. 1605 because respondent does not challenge the Board's authority under 15 U.S.C. 1604(a) to issue binding regulations. The Court "must give effect to the unambiguously expressed intent of Congress". Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842. However, if Congress "left a gap for the implementing agency to fill," the agency's regulation is "given controlling weight unless it is arbitrary, capricious, or manifestly contrary to the statute." even though contrary to an act of Congress. Id. at 843-844.