Slip Opinion
Bankr. D. Neb.Aug 12, 2025Background
- Mark B. Holtzen filed for Chapter 13 bankruptcy on March 27, 2025, primarily to address significant debts to his former spouse, Tricia Holtzen, and the IRS.
- Tricia Holtzen's claim against the debtor stemmed from their divorce and included large sums for spousal/child support, property equalization, and attorney fees.
- The debtor's father paid a substantial portion of the arrears, and also supported Mark by covering living expenses and allowing him to live rent free.
- Mark is employed by his father's company but earns less than minimum wage, creating questions about the accuracy and regularity of his income.
- Debtor’s proposed plan payments were dependent on further financial support from his father and a potential reduction of support obligations by the state court.
- The bankruptcy court was tasked with determining whether Mark met the eligibility requirements for a Chapter 13 debtor — specifically, whether he had regular and stable income.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Eligibility for Chapter 13 | Mark lacks regular/stable income to fund plan | Family support is sufficiently regular/stable | Income not regular/stable; debtor ineligible |
| Effect of Family Contributions | Family support is uncertain and not reliable | Family support should count as regular income | Family contributions not established as stable/regular |
| Treatment of Priority Claims | Large support obligations create infeasibility | Anticipated reduction in support will help plan | No reduction likely; plan remains infeasible |
| Bad faith and procedural deficiencies | Dismissal/conversion warranted for bad faith | No bad faith; plan filed in good faith | No bad faith found; dismissal only for income issue |
Key Cases Cited
- Tenney v. Terry (In re Terry), 630 F.2d 634 (8th Cir. 1980) ("Make payments" requires income to exceed expenses to sustain a plan)
- Gress v. Gress, 596 N.W.2d 8 (Neb. 1999) (Support obligations vest when accrued and are generally not modifiable)
- Bowers v. Lens, 648 N.W.2d 294 (Neb. 2002) (Support obligations cannot generally be retroactively modified)
- Brodrick v. Baumgarten, 809 N.W.2d 799 (Neb. Ct. App. 2011) (Modification of support requires showing of material change)
- Collett v. Collett, 707 N.W.2d 769 (Neb. 2005) (State court assessment of earning capacity can override actual income)