Ghosts of Individual Chapter 11 Debtors Ethical Issues in Representing Debtors in Individual Chapter 11s under BAPCPA Part I
Ghosts of Debtors Past: Credit Counseling for Individual Chapter 11 Debtors
Section 109 of the Code establishes the criteria for becoming a debtor in a bankruptcy proceeding. Each chapter (i.e., 7, 11, 12 or 13) has different standards for eligibility. "One of the primary amendments enacted by BAPCPA was a new eligibility requirement for individual debtors." In re Dixon, 338 B.R. 383, 386 (8th Cir. BAP Mo. 2006); see 11 U.S.C. §109(h).
Section 109(h)(1) of the Code provides:
Subject to paragraphs (2) and (3), and notwithstanding any other provision of this section, an individual may not be a debtor under this title unless such individual has, during the 180-day period preceding the date of filing of the petition by such individual, received from an approved nonprofit budget and credit counseling agency described in §111(a) an individual or group briefing (including a briefing conducted by telephone or on the Internet) that outlined the opportunities for available credit counseling and assisted such individual in performing a related budget analysis.
During the one year period since BAPCPA became effective, many courts have addressed §109(h). See Dixon, 338 B.R. at 386 (specifically, §109(h) states that, as a general rule, all individual debtors must receive an appropriate briefing during the 180 days preceding the date of filing).3
While most of the cases address the credit counseling requirement in the context of chapter 7 and 13 cases, §109(h) does not except chapter 11 debtors from its requirements.4 Chapter 11 and 12 cases have also been dismissed due to a debtor's failure to comply with §109(h).5 The courts deciding these cases followed the same line of reasoning in the consumer cases cited supra, and dismissed them because the individual debtors did not obtain proper credit counseling.6
The failure to obtain credit counseling is a fatal flaw unless the debtor can satisfy one of two exceptions or an exemption in §109(h)(2), (3) and (4), respectively. See In re Hedquist, 342 B.R. 295 (8th Cir BAP 2006) ("[T]he requirements of §109(h) are mandatory; failure to meet them is a 'fatal flaw' rendering an individual debtor ineligible for bankruptcy relief" (footnote omitted)).
These exceptions or the exemption exist if the debtor cannot complete the credit counseling requirement because: (1) the U.S. Trustee has determined that the credit counseling agencies for an entire district "are not reasonably able to provide adequate services" for the district (11 U.S.C. §109(h)(2)(A)); (2) the debtor is granted a temporary deferral by the court due to exigent circumstances (11 U.S.C. §109(h)(3)); or (3) the debtor is incapacitated, disabled or in active military duty in a defined combat zone (11 U.S.C. §109(h)(4)).7 Subsections (h)(2) and (h)(4) are objective, so courts should have little difficulty determining whether a debtor satisfies their criteria. Subsection (h)(2) requires that the Office of the U.S. Trustee formally determine that credit counseling is not sufficiently available throughout the district. This occurred in areas ravaged by Hurricane Katrina.8 Under subsection (h)(4), the requirements for incapacity and disability are set out in the statute, and military duty in a war zone seems relatively easy to prove.
Therefore, the cases that address §109(h) discuss the exception for exigent circumstances in §109(h)(3). Section 109(h)(3) has two subjective prongs and one objective prong. See Talib, 335 B.R. at 421. "The subjective tests require that the court find that there are exigent circumstances that 'merit a waiver'..and that the certification is 'satisfactory to the court.'" Id.; see also 11 U.S.C. §109(h)(3)(A). "The objective requirement is that the certification allege that the debtor requested credit counseling prior to the filing of the petition from an approved agency but was told that the services would not be available for more than five days subsequent to the date of the request."9
Most cases addressing §109(h)(3) were filed to prevent some imminent harm, such as a foreclosure sale. This argument is persuasive in some jurisdictions, but not others. See, e.g, In re Hedquist, 342 B.R. 295 (8th Cir. (BAP) (insufficient); In re Burrell, 339 B.R. 664 (Bankr. W.D. Mich. 2006) (sufficient); In re Dixon, 338 B.R. 383 (8th Circuit BAP) (insufficient); In re DiPinto, 336 B.R. 693 (Bankr. E.D. Pa. 2006) (insufficient).
A further requirement is that the court must accept the arguments in the certification. 11 U.S.C. §109(h)(3)(C). Although this section seems to mimic the requirement that the exigent circumstances "merit waiver" in subsection (h)(3)(A), one court recognized that under general rules of statutory construction, the court must give it meaning if possible.10 The court, therefore, concluded that this subsection indicated Congress intended for the bankruptcy court to use its discretion when deciding issues under §109(h)(3).
It is also important to recognize that the exigency exception is only a temporary solution for the debtor. Unlike the subsection (h)(4) permanent exemption, a subsection (h)(3) exception requires credit counseling within 30 days, with one 15-day extension if allowed by the court. In Burrell, the debtor's failure to "cure" his or her lack of credit counseling within this period appeared to have some relevance in the court's refusal to recognize the exception. Burrell, 339 B.R. 666-67.
Recognizing that the statute makes pre-bankruptcy counseling mandatory except in the very restrictive circumstances discussed previously, the individual chapter 11 debtors in Hedquist and Watson argued that the statute violated their constitutional right to equal protection and due process.11 These arguments were rejected because the credit counseling obligation did not violate any fundamental right and was not devoid of a rational justification. Id. In fact, the court found the requirement "was well within the policy judgment of the legislature." Hedquist, 342 B.R. 300; Watson, 332 B.R. at 747.
Another failed attempt to avoid dismissal for lack of credit counseling involved an argument of excusable neglect.12 The bankruptcy court discussed the requirements for excusable neglect, but would not grant relief from the dismissal order because the debtors could not prove they could satisfy the criteria of §109(h)(3). Id. at 880.
The conclusion of the court in In re Cleaver13 accurately describes the conclusions of the courts addressing §109(h): "Pursuant to the newly enacted changes to the Bankruptcy Code, an individual must receive credit briefing prior to filing for bankruptcy protection, or he must submit a certification to the court describing exigent circumstances and detailing the unavailability of the credit briefing during the five days after requesting it."14 Therefore, chapter 11 attorneys must ensure compliance with these provisions to ensure that a chapter 11 case will not "die" shortly after its inception.
Ghosts of Debtors Present: Ethical Issues for Lawyers
As debtors' attorneys know, or should know, the vast majority of courts have held that counsel for chapter 11 debtors represent the bankruptcy estate15 and not the principals of the debtor.16 While representing your actual client in a corporate chapter 11 case is difficult, representing a debtor's bankruptcy estate in an individual chapter 11 is almost an out-of-body experience. As noted by one of the leading scholars in bankruptcy ethics, Nancy Rapoport:
Representing a corporation can present numerous problems for estate counsel, but representing individual debtors in chapter 11 is even trickier: "The complex fiduciary duties of a chapter 11 debtor-in-possession and its counsel can become even more confused when the debtor(s)-in-possession are individuals." Obviously, there is the metaphysical challenge of realizing that the human who hired you to file his chapter 11 petition is not your client in the bankruptcy case. Even though it's fairly easy, at least in theory, to understand that the president of a corporation or the managing partner of a partnership is not your client when you are representing the business entity itself, it stretches the bounds of legal fiction to comprehend the difference between the bankruptcy estate of an individual (your client) and the individual himself (not your client).
Rapoport and Bowles at 70-71. Two key issues—(1) the individual debtor's fiduciary duty to creditors and (2) new 11 U.S.C. §1115—make the challenges facing debtors' counsel and the individual chapter 11 debtors themselves especially challenging.17
What Am I To Do, Spirit?: An Individual Debtor's Duties
One of the most difficult concepts chapter 11 debtors have to grasp when they file their bankruptcy is that they owe a fiduciary duty to their creditors18 to act in the best interests of their bankruptcy estate.19 Courts have universally held that individual chapter 11 debtors owe these duties just like other debtors-in-possession (DIPs).20 This means the individual chapter 11 debtor must generally put the interests of his creditors ahead of his or her own interests and must actively work to benefit a bankruptcy estate even when that would disadvantage the individual himself. Two cases demonstrate the issues that may arise when this standard is applied.
In the case of In re Bowman,21 a chapter 7 debtor objected to the trustee's settlement of a lawsuit for an amount which would pay the debtor's creditors in full but not produce any distribution to the debtor.22 The debtor exercised her right23 to convert her case to a chapter 11 proceeding. The court granted the debtors' motion but immediately re-converted the case to a chapter 7 proceeding, finding the debtor's insistence on further litigation of her claim was a violation of her fiduciary duty as a chapter 11 DIP. The Bowman court held:
Likewise, in this case when debtor must weigh whether to accept a prompt settlement that would substantially pay her creditors or to wait and gamble on a potential to receive a greater recovery, her creditors' interests have a higher priority than the debtor's own; and they must take precedence. Debtor's own statement that she "intends to proceed with litigation, through trial," indicates her unwillingness to examine other interests above hers. But there is more to the conflict than mere unwillingness, it is an inherent conflict of interest between her duty as a fiduciary to the estate and her desire to maximize the amount of money she may recover for herself.24
In a similar fashion, the court in In re Tel-Net Hawaii Inc.25 removed the DIP who was the corporation's controlling shareholder due to its failure to pursue preference actions that would have increased its exposure on guaranteed debts.26 The court found that in light of the conflicting interests of its controlling shareholder, an independent trustee had to be appointed.
Therefore, attorneys must be careful to advise potential chapter 11 debtors of the full ramifications of a chapter 11 filing. Further, they must do this while being unable to give the individual (not in his role as DIP) advice as to how he or she could improve their financial condition at the expense of the estate.27
If You're Quick, I Will Give You Half a Crown (with Court Approval): 11 U.S.C. §1115
Section 111528 of the Code, added by BAPCPA, radically changes the definition of what constitutes property of the estate. Its most important provision is that an individual's "earnings from services preferred" after the commencement of the case, but before the case is closed, constitute property of the estate.
Prior to the enactment of 11 U.S.C. §1115, courts were bitterly divided as to what portion, if any, of an individual debtor's post-petition earnings were property of the estate under 11 U.S.C. §541. A majority of courts held that under the earnings exception of 11 U.S.C. §541(c), post-petition earnings of a debtor were not property of the estate.29 However, a sizeable minority of courts found that at least a portion of post-petition profits generated by professionals and sole proprietors were not earnings subject to the §541(a)(6) exception30 and therefore were property of the individual chapter 11's bankruptcy estate.
While 11 U.S.C. §1115 resolves this split of authority, it leaves unanswered several practical questions of how an individual chapter 11 debtor obtains final authority to pay his or her personal living expenses and the expenses of his or her family during the bankruptcy.
The initial question confronting individual chapter 11 debtors and their counsel is whether an individual debtor's "living expenses" can be paid as ordinary-course-of-business expenses under 11 U.S.C. §363(c)(1)31 and 11 U.S.C. §110832 or notice and a hearing under 11 U.S.C. §363(b)(1).33 Prior to the enactment of 11 U.S.C. §1115, few cases addressed the issue of whether a debtor had to get court approval for the payment of living expenses. Some courts that considered the question held that normal living expenses of an individual chapter 11 debtor did not need court approval,34 while others indicated that some form of court approval would be necessary at least in cases of significant expenses.35 Indeed one early decision, In re Vincent,36 held that there was no authority for the payment of living expenses for a chapter 11 individual debtor under the Code. Given 11 U.S.C. §1115 and chapter 11 debtors' fiduciary duty to creditors, individual debtors should give serious thought to having a budget for living expenses approved by their court in order to avoid challenges to the spending later in the case.37
A second problem concerns what constitutes "reasonable" living expenses for purposes of 11 U.S.C. §363. For example, will judges take into account the debtor's standard of living in determining what constitutes reasonable living expenses?38 Should courts adopt a disposable-income test similar to 11 U.S.C. §1325(b) or 1129(a)(15),39 or will they impose the "minimal" standard of living tests imposed on parties seeking to discharge student loans?40
While none of these questions have clear answers, it seems apparent that individual chapter 11 debtors who are accustomed to leading affluent lifestyles will no longer be able to maintain such standards of living during the pendency of their chapter 11s.41
A third area of possible confusion is whether an individual chapter 11 debtor can exempt a portion of his post-petition earnings from services performed under applicable state exemption law. For example, under Kentucky law42 a significant portion of "disposable earnings" (which include earnings from services) are exempt from garnishment by creditors. While Kentucky law provides that this exemption does not apply to "[a]ny order of any court of bankruptcy under chapter 13 of the Bankruptcy Code," it apparently still applies in chapter 11 cases. The question that may shortly confront courts and debtors is whether an individual chapter 11 debtor can use state law to exempt post-petition wages. In addition, since most such laws are time-period based, can those exemptions be asserted for each applicable post petition time period? Finally, there is the question of whether individual chapter 11 debtors can pay reasonable living expenses for their family. While this question almost seems to be that of a paranoid fear of a madman,43 consider whether a bankruptcy court would permit a corporate chapter 11 debtor to pay the living expenses of a president's son, brother-in-law or other relative, if they provided no value to the debtor's estate.
Further, while spouses, former spouses, children of the debtor and other designated parties are entitled to first-priority payments for their domestic support obligations44 and chapter 13 debtors are expressly authorized to pay for the support of their dependents45 in their cases, there appears to be no similar direct and expenses authorization in chapter 11 permitting an individual chapter 11 debtor to pay for his or her family's support from estate funds.46 Indeed, in a pre-11 U.S.C. §1115 individual chapter 11 case, U.S. v. Sutton, the Fifth Circuit overruled a lower court decision that allowed living expenses of the individual chapter 11 debtor's spouse and minor children to be paid from estate funds. While courts should be able to distinguish Sutton on its unique facts, it does illustrate the problems with new 11 U.S.C. §1115.
And with the conclusion of the discussion of the ethical duties of chapter 11 debtors, we must briefly interrupt this issue of Straight & Narrow until after the New Year. Join us next year, when this article concludes with a discussion of attorney-client privilege in individual chapter 11 cases and how debtors can propose confirmable plans. Until then, have a joyous holiday season and a Happy New Year!
1 Before his reformation, Ebenezer Scrooge was one of the most effective collection managers imaginable.
2 New issues arising from the changes made to individual chapter 11 practice by BAPCPA have been the subject of several scholarly articles and presentations, including: Keach, "Deadman Filing Redux: Is the New Individual Chapter Eleven Unconstitutional?," 13 Am. Bkr. Inst. L.R. 483 (Winter 2005); Warner, "Garnishment Restrictions in a Means Test World," 13 Am. Bkr. Inst. L.R. 733 (Winter 2005); Williams and Todres, "Tax Consequences of Post-Petition Income as Property of the Estate in an Individual Debtor Chapter 11 Case and Tax Disclosure in Chapter 11," 13 Am. Bkr. Inst. L.R. 701 (Winter 2005).
3 For example, see In re Rodriguez, 336 B.R. 462, 477 (Bankr. D. Idaho 2005) (eligibility requirements of §109(h)(1) were not met); In re Talib, 335 B.R. 417 (Bankr. W.D. Mo. 2005) (same); In re Sukmungsa, 333 B.R. 875 (Bankr. D. Utah 2005) (same). See also In re Burrell, 339 B.R. 664, 666 (Bankr. W.D. Mich. 2006) ("To be a debtor under Title 11, an individual must have received credit counseling within 180 days preceding the date of filing the bankruptcy petition").
4 See Dixon, 338 B.R. at 386 ("It is the clear expectation of the statute that all individual debtors receive such a briefing prior to filing") (emphasis in original).
5 See In re Hedquist, 342 B.R. 295 (8th Cir. BAP 2006); In re Watson, 332 B.R. 740 (Bankr. E.D. Va. 2005); In re Bogedain, 2006 WL 2471939 (E.D. Mich. Aug. 24, 2006).
6 The problem faced by debtors whose cases are dismissed involves the application of the automatic stay. Section 362(c)(3) and (4) limit application of the automatic stay when a previous bankruptcy case was dismissed within one year of the new filing. 11 U.S.C. §362(c)(3) and (4). To avoid the possible inequitable result the limitation on the automatic stay might impose on an unsuspecting debtor, bankruptcy courts have struck the case, rather than dismissing it. See In re Elmendorf, 345 B.R. 486 (Bankr. S.D.N.Y. 2006). In Elmendorf, the bankruptcy court struck a chapter 7 case and two chapter 13 cases filed before the debtors sought credit counseling. The bankruptcy court determined it may decide, on case-by-case basis, whether to strike petitions filed in violation of the credit counseling requirement. Id. at p. 499-500. But see In re Wilson, 346 B.R. 59 (Bankr. N.D.N.Y. 2006) (the appropriate disposition, upon determination by bankruptcy court that debtors had not satisfied the pre-petition credit counseling requirement, was to dismiss, not strike, the bankruptcy case).
7 See, generally, In re DiPinto, 336 B.R. 693 (Bankr. E.D. Pa. 2006).
8 Section 109(h)(2) requires a review of the exception at least once a year. Based on information from the Office of the U.S. Trustee, it is understood that this exception was not extended for areas affected by Hurricane Katrina when it came up for review.
9 Talib, 335 B.R. at 421; see also 11 U.S.C. §109(h)(3)(B).
10 Dixon, 338 B.R. at 387.
11 Hedquist, 342 B.R. 299-300; Watson, 332 B.R. at 746-47.
12 See In re Sukmungsa, 333 B.R. 875 (Bankr. D. Utah 2005).
13 333 B.R. 430 (Bankr. S.D. Ohio 2005).
15 See, generally, Everett v. Perez, 30 F.3d 1209 (9th Cir. 1994); In re Cenargo International PLC, 294 B.R. 571 (Bankr. S.D.N.Y. 2003); In re ICM Notes Ltd., 278 B.R. 117 (S.D. Tx. 2002); In re Harp, 166 B.R. 740 (Bankr N.D. Ala. 1993); In re Rusty Jones Inc., 134 B.R. 321 (Bankr. N.D. Ill. 1991); In re Grabill Corp., 113 B.R. 966 (Bankr. N.D. Ill. 1990); In re Storms, 101 B.R. 645 (Bankr. S.D. Cal. 1989). See also Rapoport & Bowles, "Has the DIP's Attorney Become the Ultimate Creditor's Lawyer in Bankruptcy Reorganization Cases?," 5 Am. Bkr. Inst. L. Rev. 47 (Spring 1997) (hereinafter "Rapoport & Bowles").
16 However, at least two cases, Hansen Jones & Lela P.C. v. Segal, 220 B.R. 434 (D. Utah 1998), and In re Sidco Inc., 173 B.R. 194 (E.D. Colo. 1994), have held that counsel owe duties to the debtors-in-possession, not the estate.
17 There are numerous other problems with individual chapter 11 debtors, including attorney-client privilege issues, which are beyond the scope of this article. See, generally, In re Bame, 251 B.R. 367 (Bankr. D. Minn. 2000).
18 Id. at 53-55. See also Commodity Futures Trading Commission v. Weintraub, 471 U.S. 343, 355 (1985).
19 See Rapoport & Bowles at 53-58 for a full discussion of the exact nature of these duties.
20 See, generally, In re Hardy, 319 B.R. 5 (Bankr. N.D. Fla. 2004) (full disclosure of assets and of business transactions required); In re Robino, 243 B.R. 472 (Bankr. N.D. Ala. 1999) (compliance with court orders); In re Tornheim, 181 B.R. 161 (Bankr. S.D.N.Y. 1995) (duty to pay fees and file required reports); In re Bownan, 181 B.R. 836 (Bankr. D. Md. 1995) (duty to put creditor interests first in settlement of a lawsuit); In re Harp, 166 B.R. 740 (Bankr. N.D. Ala. 1993) (duty to properly account for estate property and to properly use estate funds).
21 181 B.R. at 836.
22 Id. at 841.
23 Id. citing In re Finney, 992 F.2d 43, 45 (4th Cir. 1993).
24 Id. at 845. However, courts do not automatically require trustees to settle a claim where an offer is made to pay creditors' claims. See, generally, In re Central Ice Cream Co., 836 F.2d 1068 (7th Cir. 1987) (discussing settlement which included payments to equity-owners and insiders).
25 105 B.R. 594 (Bankr. D. Haw. 1989).
26 Id. at 595.
27 See In re Harp, 166 B.R. at 747-48: It is not easy for a debtor-in-possession, corporate or individual, to serve two masters—juggling the personal needs and desires of the debtor itself, with its clear fiduciary responsibilities to unsecured creditors, other parties in interest and the court. Nor is the role any easier for the attorney who represents the debtor-in-possession.
28 11 U.S.C.A. §1115 provides: (a) In a case in which the debtor is an individual, property of the estate includes, in addition to the property specified in §541— (1) all property of the kind specified in §541 that the debtor acquires after the commencement of the case but before the case is closed, dismissed or converted to a case under chapter 7, 12 or 13, whichever occurs first; and (2) earnings from services performed by the debtor after the commencement of the case but before the case is closed, dismissed or converted to a case under chapter 7, 12 or 13, whichever occurs first. (b) Except as provided in §1104 or a confirmed plan or order confirming a plan, the debtor shall remain in possession of all property of the estate.
29 See, e.g., In re Habe, 2006 WL262116 (6th Cir. 2006); Roland v. UNUM Life Ins. Co. of Am., 223 B.R. 499 (W.D.N.Y. 1998); In re Powell, 187 B.R. 642 (Bankr. D. Minn. 1995).
30 See, e.g., In re Harp, 166 B.R. 740 (Bankr. N.D. Ala. 1993) (noting that chapter 11 debtors spent $206,772.45 on personal expenses in seven months in bankruptcy); In re Heberman, 122 B.R. 273 (Bankr. W.D. Tx. 1990); In re Cooley, 87 B.R. 432 (Bankr. S.D. Tx. 1984).
31 11 U.S.C. §363(c)(1) provides: If the business of the debtor is authorized to be operated under §721, 1108, 1203, 1204 or 1304 of this title and unless the court orders otherwise, the trustee may enter into transactions, including the sale or lease of property of the estate, in the ordinary course of business, without notice or a hearing, and may use property of the estate in the ordinary course of business without notice or a hearing.
32 11 U.S.C. §1108 provides: Unless the court, on request of a party in interest and after notice and a hearing, orders otherwise, the trustee may operate the debtor's business.
33 11 U.S.C. §363 (b)(1) provides, in pertinent part, that "the trustee, after notice and a hearing, may use, sell or lease, other than in the ordinary course of business, property of the estate."
34 See In re Murray, 216 B.R. 712 (Bankr. W.D.N.Y. 1998); In re Keenan, 195 B.R. 236 (Bankr. W.D.N.Y. 1996); In re Bradley, 185 B.R. 7 (Bankr. W.D.N.Y. 1995).
35 See generally In re Harp, 166 B.R. at 755-756 (discussing violation of fiduciary duties by paying for rental of vacation homes, sponsoring a large pre-game Alabama-Auburn brunch and taking a vacation to an exclusive resort in the Netherland Antilles).
36 4 B.R. 21 (Bankr. M.D. Tenn. 1979).
37 See In re Harp, 166 B.R. at 755; see also In re Roland, 223 B.R. at 506; In re Weber, 209 B.R. 793 (Bankr. D. Mass. 1997) (discussing expenditures of nonestate property in connection with determination of debtors' good faith).
38 While isolated cases have approved indirectly expenditures of an affluent nature, see In re Bradley, 18 B.R. at 11 (refusing to impose a budget on individual chapter 11 debtor); In re Rodriquez, 41 B.R. 774 (Bankr. S.D. Fla. 1984) (approving personal expenses of $7,000 per month), most courts have refused to consider status or lifestyle in determining what constitutes reasonable living expenses. See, generally, In re Cardillo, 170 B.R. 490 (Bankr. 1994); In re Jones, 55 B.R. 462 (Bankr. D. Minn. 1985).
39 See, generally, In re Watson, 403 F.3d 1 (1st Cir. 2005) (private school tuition not a reasonably necessary expense); In re Gleason, 267 B.R. 630 (Bankr. N.D. Iowa 2001) (recreation and gift expenses not reasonably necessary); In re Dick, 222 B.R. 189 (Bankr. D. Mass. 1998) (payment on non-income-producing vacation home not a reasonably necessary expense).
40 See, generally, In re Hornsby, 144 F.3d 433 (6th Cir. 1998); In re Clark, 34 B.R. 238 B.R. 238 (Bankr. N.D. Ill. 2006); In re Southard, 337 B.R. 416 (Bankr. M.D. Fla. 2006).
41 See, generally, In re Wood, 68 B.R. 613 (Bankr. D. Hawaii 1986) (large expenditures on pet care demonstrated mismanagement of debtor's business affairs).
42 KRS 427.010.
43 Consider the author; this just might be true.
44 See 11 U.S.C. §§101(14A), 507(a)(1) and 1112(b)(4)(P).
45 See 11 U.S.C. §1325(b)(2).
46 See U.S. v. Sutton, 786 F.2d 1305 (5th Cir. 1986) (holding that an incarcerated individual chapter 11 debtor was not permitted to have his estate pay living expenses of his wife and minor children).