Harris v. Viegelahn (575 U.S. 510)
U.S. Supreme Court · decided May 18, 2015 · Supreme Court Database (Spaeth)
- Citation
- 575 U.S. 510 · 135 S. Ct. 1829
- Decided
- May 18, 2015
- Term
- October Term 2014
- Vote
- 9–0
- Majority author
- Justice Ginsburg
- Issue area
- Economic Activity
- Disposition
- Reversed and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice GINSBURG delivered the opinion of the Court. This case concerns the disposition of wages earned by a debtor after he petitions for bankruptcy. The treatment of postpetition wages generally depends on whether the debtor is proceeding under Chapter 13 of the Bankruptcy Code (in which the debtor retains assets, often his home, during bankruptcy subject to a court-approved plan for the payment of his debts) or Chapter 7 (in which the debtor’s assets are immediately liquidated and the proceeds distributed to creditors). In a Chapter 13 proceeding, postpetition wages are “[property of the estate,” 11 U.S.C. § 1306(a), and may be collected by the Chapter 13 trustee for distribution to creditors, § 1322(a)(1). In a Chapter 7 proceeding, those earnings are not estate property; instead, they belong to the debt- or. See § 541(a)(1). The Code permits the debtor to convert a Chapter 13 proceeding to one under Chapter 7 “at any time,” § 1307(a); upon such conversion, the service of the Chapter 13 trustee terminates, § 348(e). When a debtor initially filing under Chapter 13 exercises his right to convert to Chapter 7, who is entitled to postpetition wages still in the hands of the Chapter 13 trustee? Not the Chapter 7 estate when the conversion is in good faith, all agree. May the trustee distribute the accumulated wage payments to creditors as the Chapter 13 plan required, or must…
Excerpt of a 18,800-character opinion. The full text and citation network load in the interactive viewer above.