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May 27, 2008
8th Circuit Rules that Debtor may Appeal Confirmation of her own Plan
Zahn v. Fink (In re Zahn) ---- F. 3d ----, 2008 WL 2130508 (8th Cir., May, 2008)
Issue: May the chapter 13 debtor appeal confirmation of her own chapter 13 plan? May a debtor appeal a refusal to confirm a chapter 13 plan?
Holding: Yes, when she has been forced by the court to file a plan to which she objects. No, denial of confirmation is not a final order.
The debtor filed a 36 month chapter 13 plan. The trustee objected saying that the plan must be 60 months because she must include her husband’s IRA distributions in her CMI. The court agreed. The debtor appealed and the BAP dismissed the appeal as interlocutory. The debtor amended the plan increasing it to 60 months and filed an objection to the plan. The court confirmed the plan and the BAP dismissed the appeal saying the debtor has no standing.
The 8th Cir reversed on the standing issue. “The BAP correctly recognized, ‘[i]n order to have standing to appeal the decision of the bankruptcy court, an appellant must be a person aggrieved.’” “The BAP then concluded ‘[Zahn] is not an aggrieved party.’” “The BAP reasoned, ’[w]hen the court confirmed her plan, [Zahn] got all the relief for which she asked.’” “That a party may appeal from a judgment in his favor when there has been some error prejudicial to him, or he has not received all he is entitled to, has quite generally been held by the courts, and there is no sound reason otherwise.” “The extended length of Zahn’s plan—a consequence of the inclusion of her non-filing husband’s IRA distributions—is material and prejudicial to Zahn. Zahn is thereby an aggrieved party.” The 8th Circuit also confirmed that denial of a chapter 13 plan is not an appealable order.
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