Expected Income Changes Count In Ch. 13: High Court

Law360, New York (June 7, 2010, 12:45 PM EDT) -- The U.S. Supreme Court ruled Monday that bankruptcy courts can consider near-certain future changes in a Chapter 13 debtor's income when deciding how much the debtor must pay unsecured creditors each month after reorganizing its debt.

The 8-1 opinion, delivered by Justice Samuel Alito, said bankruptcy courts shouldn't simply extrapolate a debtor's “projected income” from its average income over the last six months if the debtor knows that income is likely to change.

The decision is a victory for Stephanie Lanning, a Kansas resident who filed...
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