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Denial of Chapter 13 repayment plan and appeals

Ohio residents may be interested to learn about a recent U.S. Supreme Court decision in which the court ruled that a debtor does not have a right to appeal a denial of a proposed Chapter 13 repayment plan. The ruling was issued on May 4, and puts an end to splits in lower courts regarding the right.

The case involved a man who filed a voluntary Chapter 13 bankruptcy petition in December 2010. He owned a property that had a mortgage of $387,000 on it. After amending his petition three times over two years, the debtor proposed a repayment plan that divided his debts into a secured group for repayment of the mortgage and an unsecured group. Under his proposed plan, the man wanted to pay his regular mortgage payments each month in full, while devoting little money towards the unsecured debt.

The proposed plan was rejected in July 2012, and the debtor then appealed the rejection to a bankruptcy appellate panel which affirmed the lower court's ruling. He had been given leave to amend his plan, and so the court said he didn't have the right to appeal the denial because it was not a final decision, such as dismissing the case would have been.

The case is important to people who are interested in filing for this type of consumer bankruptcy because it demonstrates how important it is to be careful when proposing a repayment plan. Plans are not always approved, and if one is denied, the filer will need to be able to restructure it in a manner that meets the federal bankruptcy guidelines. People who are considering this form of debt relief may want to get help from a bankruptcy attorney.

Source: Courthouse News Service, "Bankruptcy Plan Appeal Fails to Sway High Court," Dan McCue, May 4, 2015.

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