October 28th, 2009 by Reed Allmand 
In the Chapter 7 bankruptcy case of Kunkelman, Jeffrey D.; In re, the bankruptcy court ruled that a debtor’s retirement contributions must be included in his disposable income and dismissed his Chapter 7 bankruptcy case.
The details of the bankruptcy case:
“The Chapter 7 debtor had one secured debt of $10,731 and unsecured debts of $18,628, including a $4,000 student loan. The debtor filed for bankruptcy just after getting a job in a distant city. Rather than commute, he rented a place to stay close to work. This decision increased his living expenses while he looked for a permanent place to live closer to work. The debtor’s pay advice showed monthly contributions of $450 to a “savings/retirement account.” The U.S. Trustee objected that these contributions should be included in the debtor’s disposable income. The court agreed.”
The bankruptcy court noted that since the debtor was only middle-aged he had plenty of productive years to invest in his retirement savings and that his debt payments should take priority over retirement savings at this time. Although the court noted that the rule is not absolute, they said that because the debtor did not have mitigating circumstances such as failing health, they could not justify allowing the debtor to save for retirement while discharging his debts in Chapter 7 bankruptcy. The court dismissed the debtor’s Chapter 7 bankruptcy saying that he needed to file Chapter 13 bankruptcy.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
View all posts by Reed AllmandSubscribe
Subscribe to our e-mail newsletter to receive updates.
