Michael D. Clark v. Stephanie A. Brooks
784 F.3d 380
| 7th Cir. | 2015Background
- Brooks, an above-median debtor in Illinois, has $6,614.50 monthly income, including $400 child support; filed Chapter 13 on Oct 4, 2012; Form 22C used to compute disposable income; child support was included in income and excluded from disposable income per §1325(b)(2); standard living expenses (707(b)(2)(A)-(B)) applied on Part IV; trustee argued full exclusion caused double deduction with standard deductions; bankruptcy court allowed full exclusion citing Illinois law and reasonable-necessity; plan proposed $459 monthly payment for 60 months; district court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether child support can be categorically excluded from disposable income under §1325(b)(2). | Brooks: full exclusion permitted. | Trustee: exclude only reasonably necessary expenses not covered by standard deductions. | Yes, generally categorically excludable. |
| Whether the exclusion should be limited by §707(b)(2) standard deductions or require case-by-case scrutiny. | Brooks: exclusion should stand; standard deductions suffice. | Trustee: require documented child-related expenses not covered by standard deductions. | Court rejected trustee’s limitations; adopt categorical exclusion with rare exception. |
| Whether state-law “reasonable and necessary” standard controls the scope of the exclusion. | Illinois standard supports full exclusion. | State standard informs but does not override federal structure. | Illinois standard weighty but does not prevent independent review; not conclusive. |
Key Cases Cited
- Ransom v. FIA Card Servs., N.A., 562 U.S. 61 (2011) (standardized means test adopts a bright-line approach; occasional anomalies tolerated)
- In re Midway Airlines, Inc., 383 F.3d 663 (7th Cir. 2004) (standard of review for bankruptcy decisions (clear error for facts, de novo for law))
- In re Welch, 31 B.R. 537 (Bankr. D. Kan. 1983) (courts protect child support from creditors in bankruptcy)
- Blisset v. Blisset, 526 N.E.2d 125 (Ill. 1988) (state court best interests; noncustodial support awards rise to best interests standard)
- In re Brooks, 498 B.R. 856 (Bankr. C.D. Ill. 2013) ( Illinois award supports weight for reasonable-necessity; not conclusive)