In the Matter of Steenes

Bankruptcy Ct. erred in denying City of Chicago’s requests to vacate orders keeping debtors’ vehicles in debtors’ bankruptcy estates, where said requests had been filed after Chapter 13 payment plans had been established, and where: (1) debtors had incurred almost $12,000 in traffic-related fines while vehicles were in bankruptcy estates; and (2) inclusion of said vehicles in bankruptcy estates meant that City would not get paid for said fines and automatic stay of 11 USC section 362 prevented said vehicles from being towed. Generally, under 11 USC section 1327(b), confirmation of payment plan vests all property in bankruptcy estate to debtor, and Bankruptcy Ct. failed to state why debtors’ vehicles had to remain in bankruptcy estate. Moreover, point of returning property to debtors is to ensure that debtors pay ordinary and necessary expenses of maintaining their property, and Ct. rejected proposition that Chapter 13 permits debtors to use particular assets (i.e. vehicles) to earn money without paying for assets’ expenses.