Tithing in a Chapter 13 Plan: The Requirement of Reasonableness Under the Religious Liberty and Charitable Donation Protection Act

Abstract

A recurring dilemma faced by bankruptcy courts occurs when a debtor makes religious donations while in bankruptcy. In these instances, bankruptcy courts must determine the best allocation of the bankruptcy estate to address both the debtor's interest in making religious donations and creditors' interest in receiving payment. This conflict arises because of the Religious Liberty and Charitable Donation Protection Act, which amends 1325 of the Bankruptcy Code to permit a Chapter 13 debtor to include religious contributions not exceeding fifteen percent of gross annual income as a reasonable expense, thereby excluding such contributions from disposable income. Judicial interpretation of this provision is split as to whether a reasonableness inquiry must be undertaken in addition to consideration of the technical requirements of 1325. This Note argues that courts must inquire into the reasonableness of any tithe, for doing so cotnports with Congressional intent and best serves the needs of creditors and debtors and the policies of the Bankruptcy Code.