Joining the Tenth Circuit, the Ninth Circuit also has held that chapter 13 trustees are not paid their fees when cases are dismissed before confirmation. The identical issue was argued on February 15 before the Second Circuit.
In short order, we’ll have either unanimity or a split of circuits. A split will give rise to an issue worthy of a grant of certiorari by the Supreme Court.
Notably, the Ninth Circuit’s opinion on June 12 adopted reasoning in an amicus brief filed in support of the debtor by the National Consumer Bankruptcy Rights Center and National Association of Consumer Bankruptcy Attorneys.
Bankruptcy Judge Barbara J. Houser, the chief bankruptcy judge for Dallas and Fort Worth, used the bankruptcy of billionaire Sam Wyly to put a lid on generous exemptions under Texas law.
Although the courts are split on the standards justifying a hardship discharge, incarceration under any formulation does not warrant shedding debt.