Is god a preferred creditor? Tithing as an avoidable transfer in Chapter 7 bankruptcies
Passage of the Religious Freedom Restoration Act in 1993 served to resolve the conflict on the question of whether tithes are subject to avoidance by creditors as fraudulent conveyances under section 548 of the Bankruptcy Code. First Amendment and adequate consideration arguments were less successful in protecting religious contributions made by bankruptcy debtors. Under the Religious Freedom Restoration Act, it appears that creditors would have to overcome the compelling interest and least restrictive means tests for abridging religious freedoms to undo such conveyances.
Publication Name: University of Chicago Law Review
Tithing in chapter 13 - a divine creditor exception to section 1325?
Bankruptcy courts cannot exempt tithes from the repayment standards of section 1325 of the Bankruptcy Code because to do so would violate the Establishment Clause. It has been argued that allowing debtors to exempt tithes vindicates rights under the Free Exercise Clause and the Religious Freedom Restoration Act, but even under the Act's heightened scrutiny, bankruptcy courts are justified in not exempting tithes. To accommodate tithing would violate the Establishment Clause because the government would be favoring those religions that require adherents to tithe.
Publication Name: Harvard Law Review
Now you see it, now you don't: the impact of RFRA's invalidation on religious tithes in bankruptcy
The 1993 Religious Freedom Restoration Act (RFRA) inappropriately provided debtors who made religious donations with an exemption from fraudulent conveyance laws. The RFRA was enacted in response to the 1990 US Supreme Court decision in Employment Division, Department of Human Resources v. Smith, which would not allow First Amendment considerations to impede fraudulent conveyance procedures. The US 8th Circuit Court of Appeals supported the RFRA but the act was invalidated by the 1997 US Supreme Court decision in City of Boerne v. Flores.
Publication Name: Bankruptcy Developments Journal
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