In re Cantu, 553 B.R. 565

Debtor filed Chapter 13 on Dec. 31, 2015; he is an above‑median income debtor.
Debtor had two retirement plan hardship loans; one was repaid in Jan. 2016, freeing $804 identified as future income and $268.62/month he proposed to contribute post‑petition to his retirement plan.
Debtor amended Schedule C to claim that post‑petition income (the loan payoff savings) was exempt under Va. Code § 34‑4 (wildcard); debtor alternatively argued Va. Code § 34‑29.
Chapter 13 Trustee objected to the exemptions and objected to confirmation on disposable income and good faith grounds.
Court sustained Trustee’s objections to state‑law exemptions for post‑petition wages/income but overruled Trustee’s objections to plan confirmation on disposable income and good faith, allowing the debtor to make voluntary retirement contributions under 11 U.S.C. § 541(b)(7) and finding the debtor acted in good faith.

Issue	Debtor's Argument	Trustee's Argument	Held
Whether debtor may claim state exemptions (Va. Code § 34‑4 / § 34‑29) in post‑petition wages/income	Exemption applies to the $804 (savings from loan payoff) under Va. Code § 34‑4 or § 34‑29	Post‑petition earnings are property of the Chapter 13 estate (11 U.S.C. § 1306) and cannot be exempted from the disposable‑income requirement	Sustained: exemptions in post‑petition wages/income under Va. law disallowed as inconsistent with Chapter 13 disposable‑income regime
Whether voluntary post‑petition retirement contributions may be deducted from disposable income and whether they are made in good faith	§ 541(b)(7) excludes such contributions from estate/disposable income; contributions allowed even if not made pre‑petition; debtor acted in good faith given prior inability to contribute during loan repayment	Contributions should not reduce disposable income unless they were being made pre‑petition (middle/Prigge/Seafort view)	Overruled: § 541(b)(7) permits exclusion of voluntary retirement contributions from disposable income without a pre‑petition contribution requirement, subject to a good‑faith inquiry; debtor’s contributions allowed and debtor found to be proceeding in good faith

Mort Ranta v. Gorman, 721 F.3d 241 (4th Cir. 2013) (recognizing statutory exclusion for Social Security in disposable‑income analysis)
Blausey v. U.S. Trustee, 552 F.3d 1124 (9th Cir. 2009) (current monthly income includes otherwise exempt disability benefits)
Taylor v. United States (In re Taylor), 212 F.3d 395 (8th Cir. 2000) (pension exemption does not preclude treating pension as disposable income)
Seafort v. (In re Seafort), 669 F.3d 662 (6th Cir. 2012) (Court of Appeals decision adopting restrictive view that post‑petition voluntary contributions not excluded unless in place pre‑petition)
In re Vanlandingham, 516 B.R. 628 (Bankr. D. Kan. 2014) (holding § 541(b)(7) allows post‑petition contributions and emphasizing good‑faith review)
In re Drapeau, 485 B.R. 29 (Bankr. D. Mass. 2013) (§ 541(b)(7) exclusion applies and post‑petition contributions may be allowed where good faith shown)
Patterson v. Shumate, 504 U.S. 753 (1992) (qualified retirement funds may be excluded from estate under § 541(c)(2))