U.S. Supreme Court Takes Topeka Bankruptcy Case

A Topeka, Kansas, consumer bankruptcy case is pending in the U.S. Supreme Court. It involves the Topeka chapter 13 trustee objecting to Stephanie Lanning’s bankruptcy plan.

Lanning had taken a buyout and left her job at Payless Shoesource.  She was working at Joann’s Fabrics for less money when her bankruptcy was filed.

When Lanning took the bankruptcy means test, the Payless buyout caused her income average to be higher than her current income and higher than the median for a single person in Kansas.  She would have been required to make a bankruptcy payment she could not afford to make with her lower income.

Lanning asked the Court to deviate from the bankruptcy means test results due to her change in circumstances.  The bankruptcy court granted her request over to trustee’s objection who favors a strict interpretation of the means test.

The trustee appealed the bankruptcy court order.  The U.S. Court of Appeals for the Tenth Circuit affirmed the bankruptcy court.  The trustee appealed to the U.S. Supreme Court.

The progress of the appeal, Hamilton Chapter_13_Trustee_v._Lanning, can be followed on the U.S. Supreme Court blog.  Briefs are being submitted now.  Oral argument before the U.S. Supreme Court has not been scheduled yet, but is predicted to be in March 2010.

About Jill Michaux

Jill Michaux is a Kansas bankruptcy attorney. She can be found on Google+. She and her partner, Mark Neis, are Topeka's only board certified consumer bankruptcy law specialists.