Be Just before You're Generous: Tithing and Charitable Contributions in Bankruptcy

Abstract

FIRST PARAGRAPH(S)|The relationship of church tithing and charitable contributions in the bankruptcy context has emerged in the following five fact patterns. First, in Chapter 13, the Trustee has scrutinized the debtor's desire to tithe within the framework of the Bankruptcy Amendments and Federal Judgeship Act of 1984 ("BAFJA") consonant with the undefined terms of "reasonably necessary expense" and "disposable income." Second, in Chapter 7, the substantial abuse standard of section 707(b) challenges the debtor to consider Chapter 13 reorganization. Third, the relationship between dischargeability of student loans and tithing sheds indirect light. Fourth, in Chapter 7, the Trustee seeks to avoid gifts and transfers that are made without reasonably equivalent value; for example, "fraudulent transfers" the debtor made to the church in the year prior to filing the case. Finally, in situations where the donor has made a pledge and subsequently declared bankruptcy before completing the pledge, the donee seeks to enforce the transfer of property from the bankrupt estate to the charitable institution...