[CNYBBA-LISTSERV] Congressional Reaction

[Lynn Harper Wilson]

Here is something forwarded by Mark.  Looks like Diagostino got somebody's
attention ...
Lynn

***************************************
Lynn Harper Wilson, Staff Attorney
Standing Chapter 12 & 13 Trustee's Office
Syracuse, New York
    e-mail: lhwilson at cnytrustee.com
        web site: http://www.cnytrustee.com 



-----Original Message-----
From: hank hildebrand 
Sent: Saturday, September 16, 2006 10:45 PM
To: NACTT Trustee
Subject: [trustee-mail] Congressional Reaction

Note the letter that was sent Friday to the attorney general from Senators
Grassley, Hatch and Sessions.  Please read carefully the directive that our
senators request the attorney general to take:

September 15, 2006 

The Honorable Alberto Gonzales United States Attorney General United States
Department of Justice 950 Pennsylvania Avenue, NW Washington, DC 20530 

Dear Attorney General Gonzales: 

We would like to bring to your attention a bankruptcy case recently decided
in New York, In re Diagostino, No. 06-10384, 2006 WL 2578172 (Bankr.
N.D.N.Y. Aug. 28, 2006), which we believe inaccurately interprets how tithes
are to be treated under the bankruptcy laws. In Diagostino, the court ruled
that above-median income debtors in Chapter 13 repayment plans cannot deduct
charitable contributions when calculating their disposable income under the
means test. This case arose because a trustee objected to the inclusion of
tithing in a proposed repayment plan. 

We believe that this court decision was wrongly decided and runs counter to
Congressional intent behind the Religious Liberty and Charitable Donation
Protection Act of 1998 (PL 105-183) and the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 (PL 109-8). Because the Department of
Justice has plenary authority over Chapter 13 trustees under Chapter 4 of
the United States Trustee Manual, we ask that the Department of Justice
specifically direct Chapter 13 trustees - the private parties who oversee
repayment plans - not to object to the inclusion of reasonable charitable
contributions in a repayment plan if the contribution at issue meets the
requirements of Section 4 of PL 105-183. 

For people of faith in America, the obligation to tithe presents a
significant part of the free exercise of religion, which is guaranteed to
all Americans under the First Amendment. In fact, Congress has acted to
protect the exercise of religion from encroachment by bankruptcy courts and
trustees. Congress enacted the Religious Liberty and Charitable Donation
Protection Act of 1998 to specifically protect tithing in the context of
bankruptcy law. Consequently, trustees may no longer demand that churches
"refund" tithes to the bankruptcy courts. Similarly, debtors have a
statutory right to include tithes in repayment plans under Section 4 of that
law. In addition, nothing in the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005 was intended to change this right to allow tithes in
a bankruptcy repayment plan. As the lead sponsors of both these important
bankruptcy statutes, we can assure you that Congress never intended to
exclude reasonable tithing in bankruptcy repayment plans. 

The Department of Justice has the power to remove this obstacle that has
presented itself in this misguided interpretation of the bankruptcy laws. We
urge the Department to file court papers in appropriate cases to correct
this misinterpretation, as well as issue mandatory guidance to Chapter 13
trustees so that they not object to reasonable charitable contributions in
Chapter 13 repayment plans. 

Sincerely, 

Chuck Grassley Orrin Hatch Jeff Sessions 

cc: Acting Director Clifford J. White, III, Executive Office for U.S.
Trustees.