I’ve certainly known, since becoming a bankruptcy judge in 2002,
that each of my decisions has an impact on real people, but that sense has
become more acute as I watch judges across the country try to fairly interpret
numerous provisions of the Bankruptcy Abuse Prevention and Consumer Protection
Act of 2005. I also knew that as we worked our way through the BAPCPA
revisions, many issues would have to await ultimate resolution at the
Circuit Courts, or even the Supreme Court.
For that reason, I was pleased that Congress amended 28 U.S.C. § 158(d)
to allow direct appeal of certain final orders, so whatever discrepancies
existed could be quickly resolved.
A decision I recently issued has made me re-focus on this issue.
In In re Law,1 I decided three questions
that, depending on my rulings, would make a $126,810 difference to the debtor
and his creditors. In completing the research on these three issues, I found
that dozens of thoughtful judges from literally ever corner of the country had
spent hours faithfully trying to interpret the “plain language” of the new law,
only to come up with widely divergent positions. In fact, by the end of
January 2008, over 66 judges had issued written decisions on the first issue
alone — 35 holding one way, and 31 holding the opposite.
The three issues were 1) whether an above-median income debtor with an
unencumbered 14 year old automobile could, nevertheless, deduct $471 from income
on Line 28 of Form 22C, 2) whether a pre-petition wage levy by the IRS could be
deducted on Line 33 as a “court-ordered” payment under the provisions of
11 U.S.C. § 707(b)(2)(A)(ii)(I), and 3) whether a debtor can include a
non-dependent adult child within his “family size” in calculating his household
size or living expenses on Line 24 of Form 22C. I ruled “no” on all three issues,
furthering a split within my own District on the
first issue.2 Because I have also ruled that an
above-median income debtor must remain in a plan for 60 months, this one
decision made a $23,400 difference on the car deduction issue, a $78,380 on the
tax levy issue, and a $25,030 on the household size issue. That’s a whole lot of
money.
I am not at all troubled by the decisions I made in In re Law.
What I am troubled by is that now 3 years post-BAPCPA, we have very few
Circuit-level decisions on BAPCPA issues. What this means is that financially
stressed debtors in Kansas — or at least those who are unlucky enough to draw some
judges in Kansas — will have to pay thousands of dollars more to get a Chapter 13
discharge than similarly situated debtors in other courts — at least until the
Circuit has the opportunity to rule. While this uncertainty results in
fascinating days on the Bench for me, it also impacts real people and potentially
breeds discontent with our legal system. I hope the use of 28 U.S.C. 158(d)
picks up steam, and we quickly get answers to these difficult questions.
1 2008 WL 1867971 (Bankr. D. Kan. April 24, 2008).
2 Compare In re Howell, 366 B.R. 153, 155
(Bankr. D. Kan. 2007) and Wieland v. Thomas, 382 B.R. 793, 798-99
(D. Kan. 2008) (both finding a debtor with an unencumbered car cannot take the
deduction) with In re Thomas, 2007 WL 2903201 (Bankr. D. Kan. 2007)
(overruled by 382 B.R. 793).
Judge Janice Miller Karlin was appointed as a U.S. Bankruptcy Judge for the District of Kansas in October 2002. Before taking the bench, Judge Karlin served as an Assistant United States Attorney for 22 years, concentrating on complex civil litigation in the federal court, and serving as the supervisor in charge of the Kansas City, Kansas office of the United States Attorney. She also served as a mediator for United States District Court for the District of Kansas.
Judge Karlin received her undergraduate degree and law degree from the University of Kansas in 1975 and 1980, respectively, and served as Note and Comment Editor for the Kansas University Law Review. She also served as an adjunct professor of Trial Practice at the University of Kansas. She currently serves as the Court's liaison to the Bankruptcy Bench Bar Committee, is on the Board of Governors of the KU Law Alumni Association, participates in the Bigs in Schools program with Big Brothers & Big Sisters of Topeka, and lectures frequently, including making CARE (Credit Abuse Resistance Education) presentations to high school students.
Judge Karlin has contributed chapters to practice manuals on bankruptcy law and civil procedure, and is a member of the National Conference of Bankruptcy Judges, the American Bankruptcy Institute and the Kansas Bar Association. She has also recently begun a five year term on the Bankruptcy Appellate Panel for the United States Court of Appeals for the Tenth Circuit.