United States Supreme Court Cases & Opinions

U.S. Supreme Court

Kokoszka v. Belford, 417 U.S. 642 (1974)

Kokoszka v. Belford

No. 73-5265

Argued April 22, 1974

Decided June 19, 1974

417 U.S. 642

Syllabus

1. An income tax refund is "property" that passes to the trustee under § 70a(5) of the Bankruptcy Act, being "sufficiently rooted in the bankruptcy past," and not being related conceptually to or the equivalent of future wages for the purpose of giving the bankrupt wage earner a "fresh start." Lines v. Frederick, 400 U. S. 18, distinguished. Pp. 417 U. S. 645-648.

2. The provision in the Consumer Credit Protection Act limiting wage garnishment to no more than 25% of a person's aggregate "disposable earnings" for any pay period does not apply to a tax refund, since the statutory terms "earnings" and "disposable earnings" are confined to periodic payments of compensation and do not pertain to every asset that is traceable in some way to such compensation. Hence, the Act does not limit the bankruptcy trustee's right to treat the tax refund as property of the bankrupt's estate. Pp. 417 U. S. 648-652.

479 F.2d 990, affirmed.

BURGER, C.J., delivered the opinion for a unanimous Court.