Marilyn Marshall v. Edward Johnson
- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- 22-04449 (7th Circuit, May 03,2024) Published
- Tag(s):
-
- Ruling:
- Joining the U.S. Courts of Appeals for the Ninth and Tenth Circuits, whose decisions the U.S. Bankruptcy Court for the Northern District of Illinois (BC) had followed, the U.S. Court of Appeals for the Seventh Circuit (Circuit) held that a chapter 13 trustee is not entitled to be paid any fee under 28 U.S.C. § 586(e)(2) and 11 U.S.C. § 1326(b) and must therefore return any such fees when a debtor's plan is not confirmed in a case in which the chapter 13 plan of Edward Johnson (DR) was never confirmed.
- Procedural context:
- After it dismissed the DR's chapter 13 case for unreasonable delay, the BC found that the trustee must return all of Johnson’s undisbursed payments to him without first deducting a statutory percentage fee as compensation. The trustee filed a direct appeal.
- Facts:
- The DR filed for relief under chapter 13 of the United States Bankruptcy Code. While his case was pending before the BC, he made around $3,800 in payments to the bankruptcy trustee, Marilyn O. Marshall, under his proposed repayment plan. The trustee paid around $750 in pre-confirmation adequate protection payments to Johnson’s creditors, while the rest of the payments were to be disbursed upon plan confirmation. Even though the BC held multiple confirmation hearings, however, it never confirmed the DR's plan, as he was unable to satisfactorily address an outstanding loan and his domestic support obligations.
- Judge(s):
- Thomas Kirsch; Frank Easterbrook; and Diane S. Sykes
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