Bankruptcy - Tribal Benefits | Grand Rapids Bankruptcy Attorney

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When you are facing financial  problems are receiving tribal benefits (indian Per capita casino proceeds) and have questions about your bankruptcy and  in dian benefits in the Grand Rapids area, it is important to have the representation of a good bankruptcy tribal benefits attorney. Krupp Law Offices P.C. has been providing quality bankruptcy representation for over 85 years. If you are facing financial problems or have questions about bankruptcy and tribal benefits, call the attorneys at Krupp Law Offices P.C. for a free phone consultation. During your phone consultation, our attorneys will provide you with immediate answers to your questions and schedule an appointment with one of our bankruptcy attorneys. 



Unfortunately, tribal benefits and bankruptcy issues sometimes arise together. Tribal benfits can complicate a normally straight forward bankruptcy. Even with tribal benfits, the bills cannot get paid because the benefits are only paid twice a year and your bills are monthly. There is a solution in filing chapter 7 or chapter 13 bankruptcy. The benefits are considered assets rather than income for bankruptcy purposes.

In RE Hutchinson 354 B.R. 523 (Bankr. D. Kan. 2006) states the following:

This Court is simultaneously issuing a decision in In re McDonald, Case No. 02-42350-7, which is a Chapter 7 case also dealing with per capita distributions from the Prairie Band Potowatomi Tribe. The Court incorporates by reference the general discussion contained in that opinion concerning the background of per capita distributions that are being derived from gaming revenues arising out of the operation of a casino on Potowatomie tribal land, and other tribal lands, located within Kansas.

The Court must here decide four issues: (1) whether the per capita distributions are property of the estate, (2) if the distributions are property of the estate, whether they are exempt under 11 U.S.C. § 522(d)(10)(A) or 25 U.S.C. § 410, (3) if they are a non-exempt asset of the estate, whether Debtors' plan meets the "best interest of the creditors" test, and (4) whether the motion for turnover should be granted while this case proceeds in Chapter 13.

A. The per capita distributions are property of the estate.

The first issue the Court must determine is whether the per capita distributions, including the right to receive them in the future, constitute property of the *528 estate. Debtors do not appear to contest this issue, instead focusing on the exemption issues and their right to use the property during the pendency of the Chapter 13. Nonetheless, the Court finds it useful to state, for the record, that it finds that the per capita distributions do constitute property of the estate, as the Court has more fully explained in the opinion issued today in In re McDonald. This issue was thoroughly addressed in In re Kedrowski,[9] albeit concerning distributions from a different tribe, and the Court adopts the holding and reasoning of the Kedrowski opinion as it relates to the issue of whether per capita distributions constitute property of the estate.

B. The per capita distributions are not exempt under 11 U.S.C. § 522(d)(10)(A) or 25 U.S.C. § 410.

Debtors' second Amended Schedule C claims that the per capita distributions are exempt pursuant to 11 U.S.C. § 522(d)(10)(A) and 25 U.S.C. § 410. Section 522(b) of the Bankruptcy Code[10] specifies that a debtor can take the exemptions enumerated in § 522(d) unless applicable state law specially provides otherwise, in which case debtors are restricted to the exemptions found in state and local law, as well as exemptions found in federal law other than the Bankruptcy Code. Kansas has opted out of the federal exemptions, and has enacted its own set of exemptions.[11]

Federal Rule of Bankruptcy Procedure 4003 governs exemptions, and subsection (c) of that Rule provides: "In any hearing under this rule, the objecting party has the burden of proving that the exemptions are not properly claimed." This means that the claimed exemption is presumed to be valid, and the Trustee has the burden of producing evidence to rebut the presumption. If he does so, the burden then shifts back to Debtors to come forward with evidence to demonstrate that their claimed exemption is proper.[12]

1. 25 U.S.C. § 410 is inapplicable in case.

Although the parties do not address this issue in their briefs, Debtors' second Amended Schedule C claims that the per capita distributions are exempt under 25 U.S.C. § 410. That section states that "[n]o money accruing from any lease or sale of lands held in trust by the United States for any Indian shall become liable for the payment of any debt of, or claim against, such Indian contracted or arising during such trust period, or, in the case of a minor, during his minority, except with the approval and consent of the Secretary of the Interior."

A review of the record in this case, including the stipulations and briefs filed by the parties, reveals no factual basis to support this claimed exemption. It is clear that the per capita distributions are the product of a portion of the net gaming revenues generated by the tribal casino, rather than "from any sale or lease of lands held in trust by the United States *529 for any Indian" as required by 25 U.S.C. § 410.

2. The per caper distribution are not exempt under § 522(d)(10)(A).

Although the exemptions found in § 522(d) are generally inapplicable to Kansas debtors pursuant to K.S.A. 80-2312(a), Kansas law contains a specific exception that allows debtors to claim those exemptions found in § 522(d)(10). Subsection 522(d)(10)(A), upon which Debtors rely, provides an exemption for a debtor's right to receive "a social security benefit, unemployment compensation, or a local public assistance benefit." Debtors argue that the per capita distributions are exempt pursuant to § 522(d)(10)(A) because they constitute "a local public assistance benefit."

In RE Johnson 259 B.R. 125 (2000)

Johnson's right to receive the monthly payments from the Tribe was a property right in existence when he filed for bankruptcy. Louisiana law recognizes intangible property, including an interest in the future income from a trust, a right to receive an annuity, and a share of ownership or the right to receive payments from an entity such as the Tribe. See La.Rev.Stat. Ann. § 10:9-106 (general intangibles); La. Civ.Code art. 461 (corporeals and incorporeals); La. Civ.Code Ann. art. 473 (West 2000) (incorporeal movables); La. Civ.Code Ann. art. 473 cmt. (e) *131 (incorporeal movables and juridical entities); La. Civ.Code art. 475 (immovables); In re Howard Marshall Charitable Remainder Annuity Trust, 709 So. 2d 662 (La.1998) (beneficiary's property interest in income from trust).

Additionally, Johnson's right to receive the payments is freely transferable. There are no restrictions on his ability to assign the payments to another person. Other recipients of such payments use them to secure debts. They cannot be devised to someone else because they last only for the life of the Tribe member. This characteristic does not prevent the payments or the right to receive them from being recognized as property.

Johnson has not demonstrated that any exemption or exclusion available under state or federal law prevents the per capita payments from treatment as property of the estate. See 11 U.S.C. § 541(b) (exclusions); Patterson v. Shumate, 504 U.S. 753, 756, 112 S. Ct. 2242, 119 L. Ed. 2d 519 (1992) (exemptions). The bankruptcy court's finding that future payments from the Tribe were part of the bankruptcy estate was correct.


If you are facing financial problems, a good bankruptcy attorney is not optional, it is a requirement! Our bankruptcy attorneys can answer your questions with straight talk. Having the right bankruptcy attorney on your side can relieve your stress during difficult financial times. Our bankruptcy attorneys have over 85 years of bankruptcy experience. We can provide you with excellent bankruptcy representation.

Krupp Law Offices P.C. is located in downtown Grand Rapids, Michigan and has the right bankruptcy attorney for you. We represent clients in all bankruptcy matters throughout West Michigan, including the cities of Grand Rapids, Holland, and Grand Haven, and the counties of Kent, Ottawa, Allegan, Barry, Newaygo, Montcalm, Muskegon, and Ionia.

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Christian Krupp

CEO & Founder

Christian G Krupp II was born and raised in Grand Rapids, Michigan.Chris attended Michigan State University and graduated in 1988.He attended Thomas M. Cooley Law School where he was a member of law review and one of the few students that had his law review article published.Christian Krupp graduated from law school with honors in the top ten percent of his class.His legal career started and Dykema Gossett, Michigan’s largest law firm.While at Dykema, he was involved in a diverse practice groups including the corporate, finance, and legislative areas.

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George Krupp

Creative Director

George Krupp was born in Grand Rapids, Michigan.He was admitted to practice law in 1961 and started practice in Grand Rapids, Michigan in 1962 in the Kent County Prosecutor’s Office.After years of success in the Kent County Prosecutor’s Office in Grand Rapids, Michigan, George Krupp left for private practice where he has worked for over fifty years.Over his fifty years of experience he has represented thousands of clients in civil and criminal cases.His primary concentration has been in domestic (family law / divorce cases) and criminal cases.

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