Bloomberg Law’s® Bankruptcy Law News publishes case summaries of the most recent important bankruptcy law decisions, tracks major commercial bankruptcies, and reports on developments in bankruptcy...
By Daniel Gill
An incarcerated felon wasn’t eligible to be a debtor in a Chapter 13 bankruptcy, an Illinois bankruptcy court decided when it dismissed the case ( In re Durov , Bankr. C.D. Ill., No. 16-71699, 3/10/17 ).
It must be the debtor’s own income that is considered when determining debtor eligibility—that a parent or someone else is willing to make plan payments is not sufficient to save the case from dismissal, the decision by Chief Judge Mary P. Gorman of the U.S. Bankruptcy Court for the Central District of Illinois said.
This was true even though the parents entered a contract agreeing to make the plan payments.
Tristan Durov was convicted of aggravated DUI from a July 2014 incident. He left a party intoxicated and crashed his vehicle, killing two passengers.
Although apparently the estates of his victims from the accident never sued nor indicated any intention of suing him, Durov was also the defendant in another wrongful death action, arising from an alleged sale of drugs.
Before that plaintiff could get a default judgment against him, Durov filed a Chapter 13 case. Chapter 13 allows individuals to obtain debt relief while retaining their property. To do so, the debtor must propose a plan that uses future income to repay all or a portion of his debts over a three to five year period.
In order to qualify to be a debtor in Chapter 13, the individual must have a regular income sufficient to make payments for this plan. Durov made only about $14 a month from the Illinois Department of Corrections, a sum insufficient by itself to fund a plan. However, the debtor’s parents agreed to commit $25.00 a month for a 60 months plan.
The court decided that because the parents’ promise to make the payments was “purely gratuitous,” it did not qualify as regular income of the debtor.
The court therefore ordered the dismissal of the case. The order, however, does give the debtor the option to convert his case to one under Chapter 7 of the Bankruptcy Code. In Chapter 7, a debtor’s nonexempt assets (those he cannot keep) are liquidated by a trustee, and the proceeds are distributed to creditors.
John H. Germeraad, the Chapter 13 trustee who moved to dismiss the case, was represented by Kenneth Takis Siomos, Springfield, Ill. Devvrat Sinha, Weissberg and Associates, Ltd., Chicago, represented Durov.
To contact the reporter on this story: Daniel Gill in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jay Horowitz at JHorowitz@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)