66 East Main Street, 3rd Floor Little Falls, NJ 07424

Marijuana Businesses Cannot Receive Bankruptcy Relief

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The Chapter 13 debtor was a licensed “caregiver” and marijuana grower.   Debtor filed for Chapter 13 bankruptcy protection after falling behind on his house and utility payments.   He also missed at least one payment on his truck.

The U.S. Trustees moved to dismiss the case because the bankruptcy court “should not enforce the protections of the Bankruptcy Code to aid violations of Federal Controlled Substances Act”.

The Debtor’s business violated federal criminal law irrespective of any statement that the United States Attorney General or any deputy may have made about the exercise of prosecutorial discretion as an executive matter.

Federal Judicial Officers take an oath to uphold federal law and participating in the Debtor’s continued operation of his marijuana business under the Court’s protection is hardly consistent with that oath.   The Standing Trustee in carrying out their duties in a Chapter 13 case will inevitably support the debtor’s criminal enterprise.

The Bankruptcy would preserve the debtor’s title and possession to the residence where he cultivates the marijuana, the horticultural equipment and fertilizers he uses and even the truck he transports the marijuana.


The Court found that the debtor did file the Chapter 13 bankruptcy in good faith and needed the relief provided by a bankruptcy.

Bankruptcy Court gave the Chapter 13 Debtor 14 days to destroy his marijuana plants and stop using estate property in connection with his marijuana growing business, or have his case dismissed.