NORTHERN DISTRICT OF CALIFORNIA
|DO NOT PUBLISH
This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
ROBERT E. WILKINS, No. 00-12665
Memorandum of Decision
Chapter 13 debtor Robert Wilkins has no current income, but he does not need one. His wife is
the beneficiary of a trust with approximately $1.5 million in assets, and Wilkins is a trustee of that trust.
He and his wife are building an expensive new home. The issue before the court is whether it should
confirm his plan calling for payments of $100 per month for 36 months, with the funds coming from his
wife's trust. In other words, Wilkins wants to use his wife's money to buy a Chapter 13 discharge for
$3,600.00. Wilkins' goal is to avoid state court litigation with a creditor. Needless to say, this small
sum would pay only a very nominal dividend to creditors.
The trustee argues that Wilkins is not eligible to be a Chapter 13 debtor because he has no
regular income and therefore does not meet the requirements of § 109(e) of the Bankruptcy Code.
The court is reluctant to rule that gifts from a relative can never be considered income, as to make such
a blanket rule would make many debtors ineligible for Chapter 13 relief which may be the only way to
avoid loss of a home or deal with tax problems. The court does not need to rule on this issue, however,
because it finds that the plan is filed in bad faith.
Wilkins filed his plan solely to avoid the costs of litigation with a creditor in state court. He has
no intent to do right by his creditors. He enjoys a nice standard of living due to his wife's trust.
Regardless of legal niceties, the assets of the trust are clearly available to him for the things he wants,
like a new home. (1)
The amount he proposes to pay into the plan is arbitrary, minimal, and, to his
creditor, meaningless. All of this, the court concludes, amounts to bad faith. Accordingly, the
Trustee's objection to confirmation of the plan will be sustained and this Chapter 13 case will be
The Trustee shall submit an appropriate form of order.
Dated: April 26, 2001 ___________________________
U.S. Bankruptcy Judge
1. In a mistaken display of honesty, Wilkins testified that "we" are building a new home when, in
furtherance of his minuscule plan, he meant to say