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.
The Bankruptcy Code is a hash when it comes to saying how or whether a chapter 13 debtor must obtain court approval for incurring new debt — for instance, to purchase a car after confirmation.
In four interesting consumer cases over the last week, the debtors won three times and lost once, with two of the victories at the expense of their own lawyers. The loss involved the hotly contested.....