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.
Refunds by Creditors After Chapter 13 Discharge Go to Creditors, Not the Debtor
If a chapter 13 case is dismissed before confirmation, Section 1326 a 2 requires the trustee to return undistributed.....