Voluntary Retirement Contributions and Calculation of Disposable Income

By Thomas D. DeCarlo, Staff Attorney, Office of David Wm, Ruskin, Chapter 13 Standing Trustee, Eastern District of Michigan

One of the (many) vexing questions arising out of the Bankruptcy Abuse Prevention and Consumer Protection Act involves the interplay between a debtor’s “projected disposable income” and a debtor’s voluntary contributions to a retirement account. Section 541(b)(7) excludes from property of the estate voluntary contributions of a debtor to a qualified pension plan. Section 541(b)(7) then added the rather curious “tag line” that provides, “except that such amount under this subparagraph shall not . . .

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