The U.S. Court of Appeals for the Sixth Circuit recently ruled in a case involving a Chapter 13 debtors’ attempt to shield contributions to a 401(k) retirement account from “projected disposable income,” therefore making such amounts inaccessible to the debtors’ creditors.^[1] For the reasons explained below, the Sixth Circuit rejected the debtors’ arguments.

Case Background

A statute must be interpreted and enforced as written, regardless, according to the U.S. Court of Appeals for the Sixth Circuit, “of whether a court likes the results of that application in a particular case.” That legal maxim guided the Sixth Circuit’s reasoning in a recent decision^[1] in a case involving a Chapter 13 debtor’s repeated filings and requests for dismissal of his bankruptcy cases in order to avoid foreclosure of his home.

Yesterday the Government confirmed that the restrictions on the presentation of winding up petitions would be lifted on 30 September 2021, as planned.

However, designed to assist small companies in their recovery from the pandemic, the new regulations coming into force on 29 September 2021 have been drafted with the aim of protecting businesses from creditors demanding repayment of relatively small debts. The key difference is the temporary raising of the threshold for a winding up petition to £10,000, a drastic increase from £750.

On January 14, 2021, the U.S. Supreme Court decided City of Chicago, Illinois v. Fulton (Case No. 19-357, Jan. 14, 2021), a case which examined whether merely retaining estate property after a bankruptcy filing violates the automatic stay provided for by §362(a) of the Bankruptcy Code. The Court overruled the bankruptcy court and U.S. Court of Appeals for the Seventh Circuit in deciding that mere retention of property does not violate the automatic stay.

Case Background

When an individual files a Chapter 7 bankruptcy case, the debtor’s non-exempt assets become property of the estate that is used to pay creditors. “Property of the estate” is a defined term under the Bankruptcy Code, so a disputed question in many cases is: What assets are, in fact, available to creditors?

The Key Issues and Background

The Court of Appeal was asked to consider two key points (together with matters, including relating to the granting of summary judgment) regarding the procedural aspects of applications in insolvency proceedings. The relevant proceedings were issued by the trustees in bankruptcy of Nicola Ide (the “Trustees”).

First, could the County Court transfer part of insolvency proceedings to the High Court?

The Key Issues and Background

The Court of Appeal was asked to consider two key points (together with matters, including relating to the granting of summary judgment) regarding the procedural aspects of applications in insolvency proceedings. The relevant proceedings were issued by the trustees in bankruptcy of Nicola Ide (the “Trustees”).

First, could the County Court transfer part of insolvency proceedings to the High Court?

The case of Re Lehman Brothers Europe Ltd (In Administration)[2020] EWHC 1369 (Ch) in May 2020 highlighted the importance of ensuring that creditors or the creditors committee approve the discharge of Administrators’ liability pursuant to paragraph 98 of Schedule B1 to the Insolvency Act 1986.

Once a Chapter 7 debtor receives a discharge of personal debts, creditors are enjoined from taking action to collect, recover, or offset such debts. However, unlike personal debts, liens held by secured creditors “ride through” bankruptcy. The underlying debt secured by the lien may be extinguished, but as long as the lien is valid it survives the bankruptcy.

A Chapter 13 bankruptcy plan requires a debtor to satisfy unsecured debts by paying all “projected disposable income” to unsecured creditors over a five-year period. In a recent case before the U.S.