Charitable donations were not addressed in the 2005 bankruptcy reform law, leaving Christians and people of other faiths unsure whether they would be able to continue tithing after filing bankruptcy. This required the courts to decide the issue on a case by case basis which led to inconsistencies in the courtrooms. On August 28, 2006, the United States Bankruptcy Court for the Northern District of New York interpreted the new bankruptcy law to require debtors to pay off all creditors before making any charitable contributions.
Before the 2005 bankruptcy overhaul, the Religious Liberty and Charitable Donations Act of 1998 allowed bankruptcy judges to permit debtors to regularly make contributions to charitable organizations. Proposed legislation to overturn the New York judge's ruling passed the Senate before the last session ended and will head to the House next.
This entry was posted on Tuesday, November 14th, 2006 at 11:56 am and is filed under The Truth about Bankruptcy. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.