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Supreme Court ruling may affect ability to appeal in a bankruptcy

Kentucky residents who are facing overwhelming debt may be interested in one legal limitation that consumers face when seeking a Chapter 13 bankruptcy. A decision from the nation's highest court has clarified when a person has the ability to appeal the bankruptcy court's rulings.

The Supreme Court has issued a ruling dealing with a debtor's ability to appeal a decision in a Chapter 13 bankruptcy case. The controversy stems from a 2010 bankruptcy filing by a Massachusetts man. The man proposed multiple payment plans, ultimately arriving at one that would separate secured and unsecured debt payments. While the secured debt on a home would be paid in full, the unsecured creditors would only see around $5,000 of over $100,000 in debt. The court would not approve the plan, so the man appealed to the bankruptcy appellate panel, who agreed with the lower court.

After the man attempted to appeal this decision, the case reached the Supreme Court. The Court ruled that even though the bankruptcy court is making a decision on whether or not to approve a plan, this does not qualify as an appealable final decision. The refusals with leave to amend the plan are merely a group of interrelated controversies, which do not give rise to the right to appeal. If the bankruptcy court were to dismiss the case, however, this would be an appealable decision.

Understanding a person's rights when it comes to a Chapter 13 bankruptcy can be difficult without the assistance of an attorney. The attorney may be useful in representing the person throughout the process, from negotiating with creditors, appearing before the bankruptcy court and following through with the payment plan. This can help to stop creditor harassment and gain a fresh financial start.

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