25-40270
Bankr. D. Neb.Aug 12, 2025Background
- Mark B. Holtzen filed for Chapter 13 bankruptcy, naming his former spouse, Tricia Holtzen, and the IRS as primary creditors.
- Tricia Holtzen claimed over $211,000 in priority debts, mostly for support arrearages and property judgments from the parties’ divorce.
- Holtzen’s income is derived from working for his father’s business; he also receives substantial financial support from his parents, including living rent-free and help with expenses.
- Holtzen’s reported monthly income is negative, with the majority of expenses due to spousal and child support obligations.
- After trial on Tricia Holtzen's motions to dismiss or convert, the court focused on whether Holtzen's income was sufficiently stable and regular to support a Chapter 13 plan.
- The court dismissed the case, finding Holtzen’s reliance on unspecified and uncommitted family contributions did not meet the eligibility requirement for Chapter 13 debtors.
Issues
| Issue | Holtzen (Plaintiff) Argument | Holtzen (Defendant) Argument | Held |
|---|---|---|---|
| Eligibility for Chapter 13 bankruptcy | Income and parental contributions count as regular income. | Income insufficient and support from family is not stable/regular. | Not eligible due to insufficient, unreliable income. |
| Adequacy of parental financial support | Ongoing parental help will suffice. | No binding commitment; parental support is not assured. | Parental help is neither stable nor regular. |
| Effect of debtor’s employment/salary | Wages and total support combine to allow plan payments. | Wages are below minimum wage; raises questions of good faith. | Even at minimum wage, income insufficient for plan. |
| Bad faith as grounds for dismissal/conversion | No bad faith; seeking modification of obligations in good faith. | Alleged case filed in bad faith, and late filings. | No bad faith found, but dismissal for other reasons. |
Key Cases Cited
- Tenney v. Terry (In re Terry), 630 F.2d 634 (8th Cir. 1980) (defining 'make payments' requirement for Chapter 13 eligibility)
- Gress v. Gress, 596 N.W.2d 8 (Neb. 1999) (support arrearages are vested and generally not modifiable)
- Bowers v. Lens, 648 N.W.2d 294 (Neb. 2002) (similar principle on modification of support obligations)
- Brodrick v. Baumgarten, 809 N.W.2d 799 (Neb. Ct. App. 2011) (modification of support requires material change in circumstances)
- Collett v. Collett, 707 N.W.2d 769 (Neb. 2005) (standard for modification of domestic support obligation)