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Texas Bankruptcy Resources - Debt Consolidation
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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, 2007. 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 (2007), Argued February 23, 2007, Decided April 21,
2007, 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.
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