§ 93.1 Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Median Family Income

§ 93.1 Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Median Family Income
Cite as: Keith M. Lundin, Lundin On Chapter 13, § 93.1, at ¶ ____, LundinOnChapter13.com (last visited __________).

[1]

After BAPCPA, upon objection to confirmation by the trustee or the holder of an allowed unsecured claim, the plan must either pay the objecting creditor in full1 or provide that all of the debtor’s projected disposable income received in the applicable commitment period2 will be applied to make payments to unsecured creditors under the plan.3 “Disposable income” is defined by § 1325(b)(2) as follows:

(2) For purposes of this subsection, the term “disposable income” means current monthly income received by the debtor (other than child support payments, foster care payments, or disability payments for a dependent child made in accordance with applicable nonbankruptcy law to the extent reasonably necessary to be expended for such child)4 less amounts reasonably necessary to be expended—

(A)(i) for the maintenance or support of the debtor or a dependent of the debtor, or for a domestic support obligation, that first becomes payable after the date the petition is filed; and

(ii) for charitable contributions (that meet the definition of “charitable contribution” under section 548(d)(3) to a qualified religious or charitable entity or organization (as defined in section 548(d)(4)) in an amount not to exceed 15 percent of gross income of the debtor for the year in which the contributions are made; and

(B) if the debtor is engaged in business, for the payment of expenditures necessary for the continuation, preservation, and operation of such business.5

[2]

There are five deductions from current monthly income (CMI) necessary to determine disposable income.6 The most complex deduction is “amounts reasonably necessary to be expended—.”7 As explained above,8 for a Chapter 13 debtor with CMI less than applicable median family income, § 1325(b)(2)(A) and (B) are the statutory description of “amounts reasonably necessary to be expended—” that are deductible from CMI on the way to disposable income. For a Chapter 13 debtor with CMI greater than applicable median family income, “amounts reasonably necessary to be expended—” are determined in accordance with § 707(b)(2)(A) and (B) and are significantly different from the calculation described here.9

[3]

There are four amounts identified by § 1325(b)(2)(A) and (B) as necessary to be expended by a Chapter 13 debtor with CMI under applicable median family income. Three of the four amounts are familiar to Chapter 13 practitioners because they are not changed from pre- BAPCPA law.

[4]

First, there are amounts reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor.10 This is the “reasonable and necessary” test for the deductibility of expenses that has been part of the disposable income test since 1984.11 Pre-BAPCPA cases interpreting § 1325(b)(1)(A) should provide good continuing guidance with respect to amounts reasonable and necessary to be expended by a Chapter 13 debtor with CMI under median family income for the maintenance or support of the debtor or a dependent of the debtor.12

[5]

Qualified charitable contributions in an amount not to exceed 15 percent of gross income for the year in which contributions are made are the second component of reasonable and necessary expenses for a Chapter 13 debtor with CMI under applicable median family income.13 This expense component of the disposable income test was added to the Bankruptcy Code by the Religious Liberty and Charitable Donation Protection Act of 199714 and is unchanged by BAPCPA. By definition, qualified religious or charitable contributions not exceeding 15 percent of gross income are amounts reasonably necessary to be expended by a Chapter 13 debtor with CMI under applicable median family income.15

[6]

The third amount reasonably necessary to be expended by a Chapter 13 debtor with CMI less than applicable median family income is expenditures necessary for the continuation, preservation and operation of a business for a debtor engaged in business.16 This element of reasonably necessary expenses is unchanged by BAPCPA and has been a component of the disposable income test since 1984. Pre-BAPCPA cases interpreting this deduction from CMI have continuing vitality.17

[7]

The fourth amount reasonably necessary to be expended by a Chapter 13 debtor with CMI less than applicable median family income is new: “a domestic support obligation, that first becomes payable after the date the petition is filed.”18 Domestic support obligation (DSO) is a new term of art broadly defined by BAPCPA to include any debt in the nature of alimony, maintenance or support that “accrues before, on, or after the date of the order for relief . . . including interest that accrues on that debt.”19 To arrive at disposable income on the way to determining the amount that must be paid to unsecured claim holders in a Chapter 13 case, the debtor with CMI under applicable median family income is allowed to deduct from CMI the portion (only) of a DSO that first becomes payable after the petition.

[8]

“Payable” is the key word in this limited deduction of DSOs from CMI. All DSOs, as newly defined by BAPCPA, are priority claims entitled to full payment in a Chapter 13 case.20 Disposable income for a Chapter 13 debtor with CMI under applicable median family income is reduced by only that portion of priority DSO debt that becomes payable after the petition.

[9]

This is significantly different from the treatment of DSOs—and of all priority claims—for Chapter 13 debtors with CMI greater than applicable median family income. Detailed below,21 disposable income for a debtor with CMI greater than applicable median family income is net of all priority debts. In other words, the amount that an under-median-family-income debtor must pay to unsecured claim holders to satisfy the projected disposable income test excludes only the portion of DSO debt that becomes payable after the petition; for an over-median-family-income Chapter 13 debtor, the projected disposable income that must be paid to unsecured creditors excludes all priority debts, including DSO debt payable before the petition.

[10]

Another way to look at this is that unsecured creditors of an under-median-family-income Chapter 13 debtor give up disposable income to priority claim holders only to the extent of DSO debt that first becomes payable after the petition. General unsecured claim holders of a Chapter 13 debtor with CMI greater than applicable median family income give up disposable income for the full amount of all priority debts—including the full amount of all DSOs—without regard to when the debt becomes payable.

[11]

The largest element of “amounts reasonably necessary to be expended—” by an under-median-family-income Chapter 13 debtor is the amount reasonable and necessary for the maintenance and support of the debtor and the dependents of the debtor. This is a “reality-based” analysis in that Chapter 13 trustees (and allowed unsecured claim holders) can use an objection to confirmation as a mechanism to test the reasonableness and necessity of the actual expenses for the maintenance and support of the debtor or the dependents of the debtor when the debtor has CMI less than applicable median family income.

[12]

Even for under-median-income Chapter 13 debtors, there will be a difference from pre-BAPCPA law in this analysis because CMI is not the same as “projected income” under prior law.22 Under new § 101(10A), CMI is a historical measure of a Chapter 13 debtor’s income based on six months before the month in which the petition was filed.23 There will be significant incongruities between “amounts reasonably necessary to be expended—” and CMI because the latter represents average income during the slide into bankruptcy and the former is a measure of expenses at the time of confirmation.

[13]

It is not obvious how Chapter 13 debtors, trustees and creditors will manage this fundamental disconnect in the disposable income calculation as formulated by BAPCPA. The discrepancies will perhaps be greatest for debtors with CMI above applicable median family income,24 but it can be anticipated that all Chapter 13 debtors will have reasonable and necessary expenses at the time of confirmation that are based on different financial and budgetary considerations than the calculation of CMI under § 101(10A). If historically based CMI exceeds the actual income available to the debtor, the deduction from CMI of amounts reasonably necessary to be expended under § 1325(b)(2)(A) and (B) will reveal nonexistent CMI for payment to unsecured creditors. The debtor may not be able to propose a feasible plan that also satisfies the disposable income test as formulated by BAPCPA.25

[14]

Just the opposite might be true for a debtor whose actual income at confirmation is greater than CMI. A debtor whose income has increased since the period for calculation of CMI would have more income and perhaps greater actual expenses at confirmation. Amounts reasonably necessary to be expended by such a debtor might be higher because of the debtor’s higher income, but when subtracted from CMI, less would be required to be paid to unsecured creditors to satisfy the disposable income test. This would be a perverse outcome—a debtor with improving financial circumstances would actually pay less to unsecured claim holders under § 1325(b)(2)(A) and (B). But perverse outcomes may be required by the way the disposable income test was reformulated by BAPCPA.

[15]

When CMI is less than applicable median family income, there is no requirement in the Interim Rules that the debtor calculate disposable income in any particular form. Detailed elsewhere,26 Parts IV, V and VI of Official Form B22C attempt to calculate disposable income for a debtor with CMI greater than applicable median family income, but the instructions to that new form tell an under-median-income debtor to skip those parts. Disposable income for a debtor with CMI under applicable median family income will be determined in the pre-BAPCPA way—whatever that is in a district. The platform for that calculation—the determination of CMI—is required of every debtor in Parts I and II of Official Form B22C. The Official Form may need modifications to accurately produce a statement of CMI for some Chapter 13 debtors.27

[16]

Subtracting from CMI “amounts reasonably necessary to be expended—” as determined under § 1325(b)(2)(A) and (B) is the first step in the transformation of CMI into disposable income for a debtor with CMI under applicable median family income. There are four additional deductions before CMI becomes “disposable income” for purposes of the confirmation test in § 1325(b).28

1 See 11 U.S.C. § 1325(b)(1)(A), discussed in § 168.1 [ Payment-in-Full Option ] § 91.7 Payment-in-Full Option.

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2 Applicable commitment period in 11 U.S.C. § 1325(b)(4) is discussed in § 493.1 [ Applicable Commitment Period Calculation ] § 100.1 Applicable Commitment Period Calculation.

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3 11 U.S.C. § 1325(b)(1)(B).

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4 This (parenthetical) deduction from current monthly income to arrive at disposable income is discussed in § 490.1 [ Child Support, Foster Care and Disability Payments ] § 99.3 Child Support, Foster Care and Disability Payments.

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5 11 U.S.C. § 1325(b)(2).

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6 See §§ 467.1 [ Projected Disposable Income: All Debtors ] § 92.2 Projected Disposable Income: All Debtors and 468.1 [ Current Monthly Income: The Baseline ] § 92.3 Current Monthly Income: The Baseline.

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7 Only “amounts reasonably necessary to be expended—” for a Chapter 13 debtor with CMI less than applicable median family income is discussed in this section. “Amounts reasonably necessary to be expended—” for a Chapter 13 debtor with CMI greater than applicable median family income is discussed beginning at § 94.1 Big Picture: Too Many Issues. The other four deductions from CMI to arrive at disposable income are discussed beginning at § 99.2 Amounts Paid by Others under § 101(10A)(B).

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8 See § 469.1 [ Comparison of CMI to Applicable Median Family Income: § 1325(b)(3) ] § 92.4 Household Size and Comparison of CMI to Median Family Income: § 1325(b)(3).

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9 See 11 U.S.C. § 1325(b)(3), discussed beginning at § 94.1 Big Picture: Too Many Issues.

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10 11 U.S.C. § 1325(b)(2)(A)(i).

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11 See § 165.1 [ Reasonably Necessary for Maintenance or Support ] § 91.3 Reasonably Necessary for Maintenance or Support.

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12 See § 165.1 [ Reasonably Necessary for Maintenance or Support ] § 91.3 Reasonably Necessary for Maintenance or Support.

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13 11 U.S.C. § 1325(b)(2)(A)(ii).

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14 Pub. L. No. 105-183, 112 Stat. 517 (1998). See § 165.1 [ Reasonably Necessary for Maintenance or Support ] § 91.3 Reasonably Necessary for Maintenance or Support.

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15 The same cannot be said for Chapter 13 debtors with CMI greater than applicable median family income. See § 471.1 [ Big Picture: Too Many Issues ] § 94.1 Big Picture: Too Many Issues.

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16 11 U.S.C. § 1325(b)(2)(B).

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17 See § 167.1 [ Debtor Engaged in Business ] § 91.6 Debtor Engaged in Business.

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18 11 U.S.C. § 1325(b)(2)(A)(i).

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19 11 U.S.C. § 101(14A), discussed in §§ 440.1 [ New and Changed Priority Claims ] § 73.3 Priority Claims Added or Changed by BAPCPA and 519.1 [ Domestic Support Obligations ] § 136.21 Domestic Support Obligations after BAPCPA.

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20 See 11 U.S.C. §§ 507(a)(1) and 1322(a)(2), discussed in §§ 440.1 [ New and Changed Priority Claims ] § 73.3 Priority Claims Added or Changed by BAPCPA and 519.1 [ Domestic Support Obligations ] § 136.21 Domestic Support Obligations after BAPCPA.

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21 See § 486.1 [ Total Priority Debts and Divide by 60 ] § 97.1 Total Priority Debts and Divide by 60.

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22 See § 164.1 [ Projected (Disposable) Income ] § 91.2 Projected (Disposable) Income.

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23 See §§ 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19 Form 122C-1: Statement of Current Monthly Income and 468.1 [ Current Monthly Income: The Baseline ] § 92.3 Current Monthly Income: The Baseline.

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24 See discussion beginning at § 94.1 Big Picture: Too Many Issues.

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25 See 11 U.S.C. § 1325(a)(6), discussed in § 497.1 [ Feasibility Turned on Its Head ] § 111.2 Feasibility Turned on Its Head after BAPCPA.

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26 See §§ 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19 Form 122C-1: Statement of Current Monthly Income, 379.2 [ Form B22C: Commitment Period Calculation ] § 36.20 Form 122C-1: Commitment Period Calculation and 380.1 [ Form B22C: Disposable Income Calculation ] § 36.21 Form 122C-2: Disposable Income Calculation.

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27 Id.

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28 The four other deductions are discussed beginning at § 99.1 In General.

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In re Stacks, 588 B.R. 263, 267–68 (Bankr. N.D. Ga. Aug. 15, 2018) (Drake) (Rejecting Marshall v. Blake, 885 F.3d 1065 (7th Cir. Mar. 22, 2018) (Bauer, Flaum, Manion), plan cannot allow debtor with CMI less than applicable median family income to retain tax refunds. Both projected disposable income test and good faith required debtor to pay tax refunds to the trustee, net of $2,000 debtor can retain under local practice. “[T]he Debtor attempts to take the same action as the debtor in Marshall. The Debtor, instead of turning over all refunds to the Trustee, amended his Schedule I to include prorated refunds. The Debtor also increased certain expenses on his amended Schedule J. The effect of the increase in Schedule J expenses is to allow the Debtor to retain the refunds. . . . [T]his contradicts the regular practice of the Court, which requires the turnover of refunds absent a showing by a debtor of a specific, actual need for a refund. . . . [E]ven if the Court were to allow the Debtor to prorate the refunds, the refunds must still be paid into the plan because they constitute disposable income. . . . The Court will not condone the practice of retaining tax refunds simply for the purpose of having a ‘rainy day’ or ‘comfort’ fund. . . . [T]his District’s local form plan allows the Debtor to retain up to $2,000 of any income tax refund without having to file any request or motion.”).

In re Powers, 554 B.R. 41 (Bankr. N.D.N.Y. July 13, 2016) (Davis) ("[T]he law is clear that application of § 707(b)(2) is statutorily limited to above median income debtors—a status determined solely by reference to a debtor's CMI, which is statutorily defined as a backward-looking calculation. 11 U.S.C. § 101(10A). Thus, notwithstanding a post-petition increase in income . . . because Debtor was a below median income debtor as of the Petition Date, the use of § 707(b)(2) to limit or cap Debtor's expenses is not appropriate.").

In re McMillan, No. 3:11-bk-5348-JAF, 2015 WL 4065226 (Bankr. M.D. Fla. July 2, 2015) (Funk) (Postpetition settlement proceeds of $7,500 were disposable income to be distributed to unsecured creditors when debtors did not have an immediate need for entire $13,000 settlement.).

In re Brown, No. 13-35593-GMH, 2014 WL 4793243, at *3-*4 (Bankr. E.D. Wis. Sept. 24, 2014) (Halfenger) ($125 per month for recreation expense is not unreasonable for debtors with CMI less than applicable median family income in absence of contrary evidence; debtors have negative disposable income with or without recreation expense. "[N]either the trustee nor the debtors have presented any evidence regarding the reasonableness of the claimed expenses. . . . [T]he inquiry . . . requires evidence about the totality of the circumstances . . . . Because the Browns' disposable income is negative absent any recreation expense, the Browns' proposed plan, which provides for a minor dividend to unsecured creditors, does not offend § 1325(b)(1)(B)'s requirement that they commit all of their projected disposable income received during the commitment period to paying unsecured creditors." Arguably in dicta, to prove that whole life insurance premiums are an unreasonable expense within the calculation of disposable income for debtors with CMI less than applicable median family income, the trustee would have to prove the comparative cost of term and whole life insurance under similar circumstances.).

In re Vest, No. 12-42342-JJR13, 2013 WL 3781508, at *1 (Bankr. N.D. Ala. July 18, 2013) (unpublished) (Robinson) (Per se rule in the Eastern Division of the Northern District of Alabama: "expenses for tobacco may never be taken as a deduction on Schedule J.").

In re Ramos, 494 B.R. 181 (Bankr. D.P.R. June 4, 2013) (Tester) (Future tax refunds must be committed to trustee by debtor with CMI less than applicable median family income when there is evidence debtor received tax refunds in the past.).

In re Wise, 476 B.R. 653, 662-64 (Bankr. D.D.C. Aug. 16, 2012) (Teel) (Prepetition mortgage arrearages are a permissible expense to determine projected disposable income for a debtor with CMI less than applicable median family income. "[T]he limitation in the ending clause of § 1325(b)(2)(A)(i) that an obligation must be one 'that first becomes payable after the date the petition is filed' is a limitation on the immediately preceding clause dealing with amounts expended 'for a domestic support obligation' and is not a limitation on the earlier clause dealing with amounts expended 'for the maintenance or support of the debtor or a dependent of the debtor.' . . . I reject the trustee's argument that the amounts necessary to be paid into the plan in order to cure Wise's prepetition home mortgage arrears are not deductible in computing projected disposable income.").

In re Nicholas, 458 B.R. 516, 518 (Bankr. E.D. Ark. Oct. 26, 2011) (Evans) ($2,800 mortgage payment on 7,000-square-foot home is not reasonable or necessary for unmarried debtor with no dependents who has CMI less than applicable median family income. "The Debtor's unsecured creditors should not be forced to pay for a home that is well in excess of what the Debtor needs." Divorce decree required debtor to split equity in the event of sale but did not require debtor to keep property until it could be sold at a profit.).

In re Strahan, No. 10-20244, 2011 WL 1299987, at *2 (Bankr. D. Wyo. Mar. 31, 2011) (McNiff) (Debtors with CMI less than applicable median family income did not satisfy projected disposable income test because there was no testimony with respect to reasonableness or necessity of $40-per-month payment for a wedding ring, $280-per-month additional expenses at work were not explained and extra "Personal Expenses for 5 people" were not supported by any evidence.).

In re Andrade, No. 10-10444, 2011 WL 1559241, at *3 (Bankr. D.R.I. Mar. 16, 2011) (Votolato) (Tax refund for prepetition tax year is exempt property but is included in projected disposable income for § 1325(b) purposes; debtors failed to prove reasonableness or necessity of use of refund and thus refund was included in projected disposable income. "This Court . . . is comfortable using the pre-BAPCPA standard, on a case by case basis. Typically, courts have construed the 'reasonably necessary' language in Section 1325(b) 'as a standard of adequacy, supporting basic needs and not related to the lifestyle to which one was accustomed.' . . . [T]he Debtors assert, through counsel, that they intend to use the refund money to make repairs to their home and to replace a vehicle that was damaged in a prepetition accident. The Trustee argues, correctly, that the Debtors have not shown, either through evidence or by affidavit, that the tax refunds are necessary for their maintenance and support.").

In re Gladwin, No. 10-62276-13, 2011 WL 576852, at *4 (Bankr. D. Mont. Feb. 9, 2011) (Kirscher) (Citing Hamilton v. Lanning, 560 U.S. 505, 130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010), and Ransom v. FIA Card Services, N.A., __ U.S. __, 131 S. Ct. 716, __ L. Ed. 2d __ (Jan. 11, 2011), secured debt payments for recreational boat and trailer are not reasonably necessary for maintenance or support of debtor with CMI less than applicable median family income—notwithstanding that same debt would be allowable expense for a debtor with CMI greater than applicable median family income. "If Congress intended below median debtors to be allowed to continue making payments on debts secured by recreational property, it could have and would have applied the means test to them like it did for above median debtors. Congress did not apply the means test to below median debtors, and therefore Debtor has the burden of showing that the monthly boat payment was reasonable and necessary for his maintenance and support. . . . [T]he Court finds that Debtor has not satisfied his burden.").

In re Hilgendorf, No. 10-37111-svk, 2011 WL 353240, at *2-*3 (Bankr. E.D. Wis. Feb. 2, 2011) (Kelley) (Debtors with CMI less than applicable median family income must calculate tax expenses to accurately reflect actual taxes and cannot use tax refunds to reduce the length of the plan. Plan proposed to dedicate one-half of tax refunds but specified that tax refunds would shorten the plan to no more than three years, effectively paying secured and administrative creditors, not unsecured creditors. "The Debtors should recalculate their disposable income using the actual tax liability. But there are two problems with this solution: (1) the difficulty in correctly calculating the tax liability; and (2) inability of the Debtors who are over-withholding to fund the plan payments required by using the correct tax liability deduction. . . . In [In re Stimac, 366 B.R. 889 (Bankr. E.D. Wis. Mar. 29, 2007) (Kelley)], . . . the Court gave above-median debtors the option to pay one-half of their tax refunds, the traditional requirement in this District, into the plan. . . . Other courts have adopted similar 'short cuts' to account for debtors' inability to accurately predict their tax liability and the need to retain some of their refunds for unexpected expenses. . . . [T]he Stimac rule should apply equally in this case: either the Debtors can recalculate their disposable income by deducting their actual tax liabilities, increasing their monthly plan payments, and keeping their tax refunds; or they can dedicate one-half of their tax refunds to the payment of an additional dividend to unsecured creditors for the life of their plan. . . . The Debtors cannot, as they have proposed here, use the tax refunds to pay secured creditors, and thereby shorten the plan. That would violate the disposable income requirement of § 1325(b)(1), which is specifically directed to unsecured creditors.").

In re Camacho, No. 10-06358 BKT, 2011 WL 280857, at *1 (Bankr. D.P.R. Jan. 21, 2011) (Tester) (Debtors cannot expense mortgage payments on second home in which adult son, age 22, and minor daughter, age 19, lived; Puerto Rico Civil Code does not obligate debtors to support adult child who is not in school. $948 monthly payment for daughter's housing expense was excessive. "Debtors have not presented a legally compelling reason that justifies maintaining a second residence, in prejudice of their unsecured creditors. The convenience in maintaining a second home for their daughter is not above Debtor's [sic] obligation to pay their unsecured creditors.").

In re Lopez, No. 10-16785-B-13, 2010 WL 9489203 (Bankr. E.D. Cal. Dec. 9, 2010) (unpublished) (Lee) (Under-median debtors failed to prove necessity to keep travel trailer with $11,000 debt when unsecured creditors would receive no distribution. Debtors claimed the trailer was necessary to make plan payments because it reduced the debtors' living expenses when working out of town. Court found that debtor had not worked out of town for at least six months and debtor failed to prove that alternative living arrangements were unavailable when and if the debtor did work out of town.).

In re Skougard, 438 B.R. 738, 742 (Bankr. D. Utah Oct. 27, 2010) (Thurman) (Tax refunds are included in projected disposable income, but debtors are permitted to retain up to $1,000 a year; in future cases, debtors receiving Earned Income Credit or Additional Child Tax Credit may retain $2,000. "[T]he Debtors and the Trustee are seeking a policy change which draws a distinction between the amount that above and below median income debtors may retain from their respective tax refund amounts. However, the Court is concerned with discrimination between debtors and instead believes the better way to distinguish which debtors would retain $2,000 instead of $1,000 is whether the debtors are receiving EIC and the ACTC.").

In re Turner, No. 09-18816-WCH, 2010 WL 2509966 (Bankr. D. Mass. June 17, 2010) (unpublished) (Hillman) (BAPCPA did not change projected disposable income test for debtors with CMI less than applicable median family income; debtors failed to prove reasonableness and necessity of retaining vacation property that consumed portion of monthly income for maintenance.).

In re Grunauer, No. 10-11502-SSM, 2010 WL 2425945, at *3 (Bankr. E.D. Va. June 9, 2010) (unpublished) (Mitchell) (Arguably in dicta, for Chapter 13 debtor with CMI less than applicable median family income, "anticipated tax refunds would generally constitute disposable income. . . . Putting aside special situations such as refunds flowing from so-called refundable credits such as the Earned Income Credit, refunds by their very nature result from more money being withheld from a debtor's pay than is needed to pay the taxes actually owed. There is no more reason why a debtor, in computing projected disposable income, should be able to insulate earnings by parking them temporarily with the federal or state government until tax time than by putting them aside in a bank account or cookie jar." With respect to the trustee's voluntary addendum to the plan that would require the debtor to turn over income tax refunds during the term of the plan: "[W]here a debtor has no history of refunds and there is no other reason to believe a debtor is having too much withheld, the disposable income test would not be implicated, and thus there would be no reason for a trustee to seek payment of tax refunds. But where there is a reasonable basis to find that a debtor is overwithholding, the trustee's proposed Addendum is a pragmatic way to capture the excess disposable income without requiring the debtor to go through the exercise of adjusting his or her withholdings or, more problematically, requiring the debtor to make plan payments based on what withholdings should be rather than what they actually are. . . . Simply paying over the tax refund allows a debtor to continue with his or her historic withholdings without fear of unpleasant surprises at tax time. Consequently, in many cases it will make sense for debtors to avoid a contested confirmation hearing to resolve whether withholdings are correct by simply agreeing, as the trustee requests, that income tax refunds over some threshold level be turned over to the trustee.").

In re Register, No. 10-20054, 2010 WL 2035601, at *2 (Bankr. D. Wyo. May 21, 2010) (unpublished) (McNiff) (Debtor with CMI less than applicable median family income need not include income, expenses or profit from the operation of a business when the debtor does not pay business expenses and the debtor received only nominal income from the business. Debtor owned a 50% ownership interest in a locksmith business organized as an LLC. "The Debtors did not schedule any income or expenses from the LLC. In this Court's analysis, this was correct. The LLC is a separate business entity. Mrs. Register's interest in the business is her fifty percent ownership interest, which she listed on Schedule B. She does not receive a wage or income from the LLC. She does not pay the expenses of the LLC from her personal accounts. She received a total nominal draw of nearly $84.00 for a period of over nine months.").

In re Sheel, No. 09-12725, 2010 WL 1838964 (Bankr. D. Kan. May 4, 2010) (unpublished) (Nugent) (Debtor failed to prove that all projected disposable income was committed to plan when income reported on Schedule J did not match 1099s and expenses claimed on tax returns were different from expenses claimed on Schedule J.).

In re Tinsley, 428 B.R. 689, 693 (Bankr. W.D. Va. Apr. 19, 2010) (Krumm) (Debtors with CMI less than applicable median family income must include mileage reimbursement from an employer as income for § 101(10A) purposes and are then entitled to an expense deduction for actual business expenses; amount of mileage reimbursement is evidence of expenses incurred, and reimbursement amount will be expense allowed if rate of reimbursement is reasonable "in view of documented actual expenses and depreciation."), amending and superseding No. 09-51194, 2010 WL 1140854, at *2-*3 (Bankr. W.D. Va. Mar. 25, 2010) (Krumm) (Debtor with CMI less than applicable median family income can deduct reasonably necessary business expenses when employer requires use of personal vehicle for business purposes and mileage reimbursement is included in CMI. Debtor was required to use personal vehicle for business purposes. Pepsi reimbursed the debtor $.55 per mile for business travel. Expense reimbursement was included in CMI, but debtor can deduct business expenses in an equivalent amount. "[R]eimbursements are income for purposes of § 101(10A)(A). . . . [I]t is only logical that the Debtors are able to claim the expenses incurred by Mr. Tinsley when he is on business travel for which he receives reimbursement. . . . [D]ebtors must document their expenses and . . . only expenses that can be confirmed by documentation can be allowed. . . . [E]xpenses must be reasonably necessary. . . . [T]he rate at which Pepsi reimburses its employees is sufficient to establish reasonableness as the rate incorporates many expense variables such as gas, depreciation, and food. . . . [T]he Debtors may use the amount of the reimbursement as evidence of the expenses incurred by Mr. Tinsley and may claim those expenses on their bankruptcy petition and forms at the rate of reimbursement.").

In re Nunez, No. 09-32442-MDM, 2010 WL 816788, at *3-*4 (Bankr. E.D. Wis. Mar. 1, 2010) (McGarity) (Weaving between In re Simpson, No. 08-21251, 2008 WL 2705606 (Bankr. E.D. Wis. July 3, 2008) (unpublished) (McGarity), and In re Spraggins, 386 B.R. 221 (Bankr. E.D. Wis. Apr. 11, 2008) (Kelley), supplemental op., No. 07-24728-svk, 2008 WL 2073947 (Bankr. E.D. Wis. May 14, 2008) (unpublished) (Kelley), debtor with CMI less than applicable median family income cannot use one-half of tax refunds received during three-year plan to shorten length of plan because tax refunds are disposable income that must be paid to unsecured creditors. One percent, 36-month plan provided that one-half of income tax refunds would be used "to shorten the overall length of the plan"; but plan also provided that no fewer than 36 months of payments were required. "In Simpson, while I recognized that the disposable income limits proposed by Spraggins might be appropriate under some situations, I was unwilling to make a bright line rule that there was no such requirement after year three. . . . The custom in this district of committing only one half of the tax refund to the plan is a compromise that takes into consideration debtors' inability to predict future expenses, including taxes, and debtors' motivation to retain as much money as possible for day-to-day living, thereby running the risk of under-withholding. . . . However, income tax refunds are disposable income as long as the plan is in effect, and section 1325(b)(1)[(B)] requires that this disposable income be used to pay unsecured creditors. By using these refunds to shorten the plan, the debtor's proposal in this case is directing those payments to secured creditors, who are virtually the only recipients of distributions under this plan. . . . [W]hen payments of income tax refunds are paid into the plan, they must be paid to unsecured creditors.").

In re Urquhart, No. 09-71058, 2009 WL 3785573, at *3, *5 (Bankr. C.D. Ill. Nov. 12, 2009) (Gorman) (Parochial school tuition of $600 per month is reasonable and necessary for debtors with CMI less than applicable median family income when family lives very modestly and public school alternatives are lousy. "There is no basis in law or in public policy" to support argument that a Chapter 13 debtor with CMI less than applicable median family income is limited to the same $137.50 per month per child private school tuition expense allowed debtors with CMI greater than applicable median family income. Debtors "had first-hand experience with the public school system in Decatur, and . . . their experience was overwhelmingly negative." Debtors expressed a preference for faith-based education, but "Mrs. Urquhart made no impassioned pleas, nor did she demagogue her family's religious faith." With respect to other expenses: "The Court finds it especially relevant and persuasive that the Debtors, knowing their budgetary constraints, have made it a conscious practice to otherwise live well beneath their means in order to budget for the parochial school tuition expenses.").

In re Hughes, No. 08-24736, 2009 WL 2252181 (Bankr. D. Utah July 17, 2009) (unpublished) (Mosier) (For debtors with CMI less than applicable median family income, projected disposable income is calculated using Schedules I and J; under Midkiff v. Stewart (In re Midkiff), 342 F.3d 1194 (10th Cir. 2003), postpetition tax refunds are projected disposable income.).

In re Bostwick, 406 B.R. 867 (Bankr. D. Minn. June 23, 2009) (Kressel) (Because unrelated roommate is included in debtor's household for § 1325(b)(3) purposes, debtor has CMI less than applicable median family income, and reasonably necessary expenditures are based on actual expenses.).

In re Forbish, No. 08-B 23466, 2009 WL 1209024, at *3 (Bankr. N.D. Ill. May 5, 2009) (Goldgar) (For debtor with CMI less than applicable median family income, expense deduction for taxes based on withholding is exaggerated when there is history of tax refunds. "Before BAPCPA, courts generally determined a debtor's expenses using the debtor's Schedule J . . . and that continues to be the practice after BAPCPA for below-median debtors . . . . But a debtor's expenses are not limited to the expenses shown on Schedule J. . . . Forbish was entitled to calculate her disposable income by subtracting her actual tax liability from CMI as a reasonably necessary expense. The problem is that she subtracted more than her actual liability.").

In re Parker, No. 08-81819C-13D, 2009 WL 1147949, at *1-*2 (Bankr. M.D.N.C. Apr. 28, 2009) (Stocks) (For debtors with CMI less than applicable median family income, expense deductions are calculated using Schedule J with adjustments; even if motorcycle is not reasonably necessary for maintenance or support of debtor, including motorcycle payments still leaves debtors with negative disposable income. "Disposable income for below median income debtors is . . . calculated by taking CMI as calculated on Form B22C and subtracting: (A) sources of income such as child support that are excluded by section 1325(b)(2); (B) a debtor's reasonably necessary expenses on Schedule J; and (C) payroll deductions on Schedule I. . . . [E]ven if the court accepts the Trustee's contention that the Motorcycle is not reasonably necessary for the maintenance or support of the Debtors, the Debtors still have a negative . . . disposable income. Thus, regardless of whether or not the Debtors keep the Motorcycle, they have no disposable income.").

In re Bassett, 413 B.R. 778 (Bankr. D. Mont. Feb. 26, 2009) (Kirscher) (When Form B22C indicated debtors had below median income and plan payments exceeded net income shown on Schedule J, creditor's objection that debtors were not dedicating all disposable income was without merit.).

In re Marti, No. BK07-41827-TLS, 2009 WL 269991 (Bankr. D. Neb. Feb. 2, 2009) (Saladino) (Applying Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. 2008), disposable income for debtor with CMI less than applicable median family income is based on Schedules I and J; debtor with sufficient income to pay unsecured creditors in full in regular monthly installments cannot confirm plan that pays unsecured creditors with a lump sum payment at indeterminate time in the future.).

In re Michaud, 399 B.R. 365 (Bankr. D.N.H. Dec. 30, 2008) (Deasy) (Expense deduction for taxes for debtor with CMI less than applicable median family income must be determined on a case-by-case basis; absent special circumstances, debtors must submit future tax refunds to Chapter 13 trustee within 14 days of receipt but may move to retain some or all of refund in a future year. "[T]ax expenses fall into the category of actual expenses, and debtors bear the burden of demonstrating that these expenses are actual, reasonable, and necessary. . . . [D]ebtors may not be able to accurately predict their tax liability for a five year period. . . . Debtors' inability to make such predictions regarding their actual tax liability does not relieve them, however, from the Bankruptcy Code's requirement that they apply all their disposable income to fund a plan . . . . Because the amount withheld by debtors for payment of taxes does not necessarily correspond to their actual tax liability, the difference, i.e., the debtors' tax refund, must constitute income under § 1325(b) and, in general, must be devoted to the plan. . . . [I]t is appropriate to allow debtors to retain some amount of a tax refund in order to provide the debtors with some cushion against unanticipated expenses that arise in the course of everyday life and to provide some flexibility to debtors as they attempt to create a budget for the duration of a three-to-five year plan. . . . [T]he amount of an income tax refund that may be retained depends upon the particular circumstances in a particular case and may involve consideration of the amount of the debtor's tax refund, the amount of the refund in comparison to the total tax due, the debtor's yearly income and expenses, the debtor's overall budget, the number and nature of the debtor's dependents, the amount being paid into the debtor's plan, the dividend being paid to unsecured creditors, and the length of the debtor's plan. . . . [I]t will depend upon the facts of a specific case and must be reviewed on a case-by-case basis at the time of confirmation . . . . In order to avoid annual postpetition modifications of chapter 13 plans upon the filing of a tax return reflecting a refund, debtors in this district shall be required to submit such tax refunds to the Trustee no later than fourteen days after the receipt of such a refund, as part of the funding of the debtor's plan. . . . If the debtors believe that retention of some or all of the income tax refund payable to the Trustee is necessary for the maintenance and support of the debtors or their dependents within the meaning of the Bankruptcy Code, the debtors may make a motion, within thirty days after they file their tax return showing an entitlement to a tax refund, seeking an order modifying their obligations under their plan and the confirmation order. . . . Absent special circumstances being established by the debtor, confirmation of chapter 13 plans in this district that fail to contain a provision in the plan payment section of the plan, requiring the debtor to pay an appropriate portion of his or her tax refunds to the Trustee within fourteen days of receipt, shall be denied if an objection has been filed by the Trustee or an unsecured creditor under § 1325(b)(1).").

In re Short, No. 08-11224, 2008 WL 5751873, at *3-*4 (Bankr. S.D. Ohio Sept. 11, 2008) (Morgenstern-Clarren) (For debtor with CMI less than applicable median family income, expense side of projected disposable income calculation is amounts reasonably necessary to be expended for the maintenance or support of the debtor—a standard not changed by BAPCPA; $150 per month for cigarettes is reasonably necessary expense under the circumstances. "[T]he bankruptcy code does not define expenses for a below median income debtor, except for the 'reasonably necessary to be expended for maintenance or support of the debtor' standard of § 1325(b)(2)(A)(i), which was not changed with the enactment of BAPCPA. . . . [S]chedule J . . . does not take into account all reasonably necessary expenses. . . . [S]chedule J is the starting point for determining the debtor's reasonably necessary expenses, but . . . other expenses may also be considered. At a minimum, a debtor's payroll taxes and social security taxes are reasonably necessary expenses to be deducted from CMI. In addition, secured, priority, and administrative obligations of a chapter 13 debtor's plan are reasonably necessary expenses because otherwise, a below median income debtor would not be able to propose a realistic and feasible chapter 13 plan. . . . [P]re-BAPCPA cases are still instructive as to the limits of that standard for below median income debtors. . . . The debtor's schedule J includes $150.00 a month for cigarettes which she contends is about one pack of cigarettes a day. The court does not believe that the cigarettes are properly characterized as a luxury expense . . . . [T]he trustee does not contend that one pack a day is excessive . . . . The court does not have any evidence that one pack of cigarettes a day is an excessive amount for a person who is already a smoker. . . . The debtor has not allocated any funds at all to recreation. Regardless of the wisdom of the cigarette expense, it appears that the debtor has sacrificed in other areas of her budget to accommodate it. As a result, the court concludes that the cigarette expense is reasonably necessary under § 1325(b)(2)(A)(i).").

In re Simpson, No. 08-21251, 2008 WL 2705606, at *4-*5 (Bankr. E.D. Wis. July 3, 2008) (McGarity) (Debtor with CMI less than applicable median family income cannot confirm 60-month plan that commits 50% of tax refunds for only 36 months. Consistent with local custom, plan proposed to pay one-half of income tax refunds for three years. Plan would not be shorter than 36 months unless unsecured creditors were paid in full. Plan payments would continue for 60 months. "[T]his debtor wishes to pay one half of her tax refunds into the plan for three years, but to retain all refunds for the remaining two years of the proposed plan. The refunds that are paid into the plan would shorten the term of the plan, in essence prepaying the amounts that would otherwise be paid into the plan in years four and five, but the term would not be shortened to less than 36 months unless 100% of claims were paid. . . . The [In re Spraggins, 386 B.R. 221 (Bankr. E.D. Wis. 2008),] court determined that below-median income debtors were not required to dedicate tax refunds beyond the three year applicable period, even if the plan proposed a longer term. . . . I am unwilling to make a bright line rule that there is no such requirement after year three. This debtor is only required to commit 36 months to a plan. . . . The actual tax expense is determined by allowing her a deduction for amounts withheld, and then corrected by requiring payment of 50% of her refund back to the plan and unsecured creditors. But she wishes to retain the protections of chapter 13 longer than would be required, while also retaining more than her disposable income, without a showing that circumstances necessitate such a change or provision. In essence, she is using the bankruptcy law to pay all she can for three years, but after that, she is proposing an initial plan that on its face is stating that she is not going to pay all she can, even though she enjoys the benefits of chapter 13. I believe this is a misuse of chapter 13, and does not constitute good faith in proposing the plan, or alternatively, does not constitute cause to extend the plan beyond three years pursuant to 11 U.S.C. § 1322(d).").

In re Spraggins, 386 B.R. 221 (Bankr. E.D. Wis. Apr. 11, 2008) (Kelley) (For debtor with CMI less than applicable median family income, tax refunds are not an addition to CMI; rather, a reasonable amount is allowed for withholding taxes on expense side of disposable income calculation; debtors have option to estimate taxes based on actual taxes paid during previous year or to commit 50% of refunds to be received during three-year applicable commitment period. "Current monthly income is gross income, from which expenses, including taxes, are subtracted to arrive at disposable income. . . . [T]he proper analysis is whether the debtor was deducting a reasonable amount for withholding taxes on the expense side of the equation, not whether the tax refunds themselves were additional disposable income required to be dedicated to the plan. . . . However, requiring the debtor to estimate the amount of taxes that are actually incurred is fraught with difficulty, because tax laws and debtors' circumstances change. This Court . . . provided an option for debtors to use the actual amounts withheld on Line 30, and then to dedicate the tax refunds (traditionally limited by local custom in this District to 50% of the refunds for the entire length of the plan) if the debtor did not wish to or could not afford to deduct the actually incurred taxes to arrive at disposable income. . . . [T]he Debtor in this case could use her most recent tax return to determine the federal and state taxes she actually paid and calculate the amount that would be placed on Line 30 if she were above-median, which is presumed to be the actual taxes incurred. . . . [D]edication of the tax refunds is a 'shortcut' that enables the Debtor to continue the same level of tax withholding without risk of jeopardizing her ability to fund the plan by using the presumably lower actual tax deduction and without the expense of the analysis and potential dispute over whether the actual tax deduction is correct. . . . [T]he applicable commitment period for below-median debtors is three years . . . . Requiring a below-median debtor to extend her plan to the fourth and fifth year after confirmation simply to pay in tax refunds that may have no relationship to the debtor's statutorily defined 'projected disposable income' does a disservice to the changes in § 1325(b)(1) made by BAPCPA.") See also In re Spraggins, No. 07-24728-svk, supplemental op., 2008 WL 2073947 (Bankr. E.D. Wis. May 14, 2008) (Kelley) (distinguishing Navejer v. King (In re Navejer), No. 07-C-654, 2007 WL 3129731 (E.D. Wis. Oct. 22, 2007).).

In re Bateman, No. 06-41883-EDJ, 2007 WL 2781119, at *2 (Bankr. N.D. Cal. Sept. 21, 2007) (Debtor with CMI less than applicable median family income is not entitled to expense deductions that might be allowed by § 707(b)(2) if debtor had CMI greater than applicable median family income. "The court holds that, for purposes of this case, the calculation of Bateman's projected disposable income is governed by the information Bateman provided in his Schedules I (Income) and J (Expenses), and that Bateman is not entitled to a fixed allowance of any expense that is in excess of his actual expense even if such a fixed allowance might be included in the 'means test' under § 707(b).").

In re Cleary, 357 B.R. 369, 372-74 (Bankr. D.S.C. Nov. 14, 2006) ($1,513 per month for private school tuition is reasonable and necessary for debtor with CMI less than applicable median family income. Married debtor filed individually. Family had six children. Spouse was teacher's aide at parochial school, working only to earn discount on tuition and enough take-home to cover tuition for children to attend same school. Gross income reported on Form B22C and Schedule I was $86,283.60; median income for South Carolina family of eight is $86,918. "For a below median income debtor . . . the amounts reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor are determined in the context of the estimated average monthly expenses reported on Schedule J. These expenses must undergo judicial analysis, in the face of an objection, as to reasonableness and necessity; or as some might say, 'the old fashion way.' . . . The public policy notion that private school tuition is a luxury expense for the purposes of calculating available income under either the chapter 7 means test or for the disposable income analysis in confirming a chapter 13 plan is swept aside by BAPCPA. An allowable expense is that for 'each dependent child less than 18 years of age, not to exceed $1,500 per year per child, to attend a private or public elementary or secondary school . . . . For some purposes at least, Congress has set forth the public policy that private school tuition can be a reasonable and necessary expense. . . . [T]he children have no special education needs . . . . The Debtor and his family have shown long term enrollment at parochial schools. All of the children attend private school . . . . The Debtor's wife attended private school. The Debtor and his wife have strongly held religious convictions. The Debtor's wife would not work outside the home . . . except to provide additional income to pay for private school tuition. . . . The family's sacrifice of other basic expenses to fund private school tuition is noteworthy and, in this case, the deciding factor . . . . The final issue is whether Debtor is limited to a monthly expenditure of $125 per child in private school. . . . The calculation of the means test in chapter 7 and of disposable income for above the median income debtors in chapter 13 limits the expenditure for private school tuition. This limit is presumptively reasonable. In the circumstances of this case the Court finds that the Debtor is not limited to this expense ceiling. . . . Mrs. Clearly is not a co-debtor. Her income would likely not be available if the children withdrew from private school because she would not work outside the home. It is only because of her religious convictions that she works outside the home and sends her children to private school. Debtor and his family sacrifice significantly in the purchase of food and clothing and in the areas of recreation and transportation expense. The expense of $1,513.00 for private school tuition is a reasonable and necessary expense.").

In re Thicklin, 355 B.R. 856, 859 (Bankr. M.D. Ala. Oct. 25, 2006) (Debtor with CMI less than applicable median family income does not use IRS deductions for automobile ownership and expenses but is allowed reasonable expense for probable replacement of older cars during Chapter 13 case. "Because Thicklin's income is below the median family income for this State, his expenses for disposable income calculation purposes are determined under § 1325(b)(2)(A) and (B). The means test of § 707(b) with the IRS expense standards is not implicated. Therefore, Thicklin cannot claim the IRS standard expense for vehicle ownership. . . . [T]his conclusion does not necessarily prevent Thicklin from deducting a reasonable anticipated expense for replacement of his vehicles within the term of the chapter 13 plan. The statute looks to the future—to the time of confirmation and thereafter—to determine the debtor's disposable income. It speaks of projected disposable income . . . and of amounts to be expended . . . . A court must consider the future finances of the debtor—not just the historical.").

In re Girodes, 350 B.R. 31, 37 (Bankr. M.D.N.C. Sept. 20, 2006) (For debtor with CMI less than applicable median family income, amounts reasonably necessary to be expended are determined from Schedule J. "Section 1325(b)(3) does not apply to a below-median debtor. Therefore, reasonably necessary expenses for the below-median debtor are the expenses that the debtor has set forth on Schedule J, and are subject to review by the court. To arrive at a projected disposable income figure for a below-median debtor, the debtor's monthly expenses from Schedule J must be subtracted from CMI as calculated pursuant to Part I of Form B22C." Court rejects argument that expenses for below-median-income debtor should be calculated from Form B22C. "While the Debtor might wish that there were no difference in how expenses are computed for above and below median income debtors, the language of the statute is quite clear in this regard.").

In re Jackson, 353 B.R. 849, 851 (Bankr. E.D.N.C. Sept. 15, 2006) (To determine disposable income consistent with In re Alexander, 344 B.R. 742 (Bankr. E.D.N.C. 2006), debtors with CMI less than applicable median family income subtract Schedule J expenses from CMI determined in Form B22C; because Form B22C requires debtors to subtract ordinary and necessary business expenses to determine business income as a component of CMI, it is not also appropriate to include expenses from operation of a business or profession in Schedule J. "Pursuant to Alexander, below-median debtors are to determine their disposable income by subtracting their expenses, as determined by Schedule J, from their current monthly income, as determined by Form B22C. Form B22C requires debtors to subtract their ordinary and necessary business expenses from their gross receipts in order to arrive at their business income, which is included in their current monthly income. Schedule J requires debtors to include regular expense from operation of business, profession, or farm in determining their current expenditures. If below-median debtors are allowed to subtract Schedule J from currently monthly income, as determined by Form B22C, then those below-median debtors with business expenses would be allowed a double deduction of those expenses. Below-median debtors should not be allowed to deduct their business expenses on both forms, thereby lessening their disposable income. Therefore, when computing disposable income pursuant to Alexander for below-median debtors, business expenses are to be deducted on either Form B22C or on Schedule J, but not on both.").

In re Nevitt, Nos. 05-77798, 05-77943, 2006 WL 2433491, at *3 (Bankr. N.D. Ill. Aug. 18, 2006) (unpublished) (For debtors with CMI less than applicable median family income, amounts reasonably necessary to be expended cannot be determined from Form B22C, nor will Schedule J complete the determination; instead, payments on account of secured claims and trustee administrative expenses must adjust the expenses shown on Schedule J. "Section 1325(b)(3) provides that the 'amounts reasonably necessary to be expended' shall be determined in accordance with § 707(b)(2)(A) and (B) only when the annualized income exceeds the median family income. . . . That provision does not apply to debtors who earn less than the median family income. . . . Form B22C does not determine the 'amounts reasonably necessary to be expended' when a debtor's income falls below the median family income. . . . [U]nder § 1325(b)(2), this Court retains the discretion to determine the reasonableness of expenses and it is not bound by the amounts set forth by the IRS standards. . . . Schedule J, alone, cannot be used to determine projected disposable income. . . . Payment on account of secured debts must be taken into account to calculate projected disposable income. Schedule J does not list payments for secured debts, such as vehicle loans. The calculation of projected disposable income must take into account payment on account of secured claims and payment of the Trustee's administrative expense. . . . [T]he amount calculated on Schedule J minus any payments on account of secured debts, if not already listed therein, must be used to determine projected disposable income.").

In re Alexander, 344 B.R. 742, 746 (Bankr. E.D.N.C. June 30, 2006) (For debtors with CMI less than applicable median family income, disposable income is calculated by taking CMI from Part I of Form B22C and subtracting the expenses from Schedule J. "While there is rigidity in arriving at the disposable income figure for the above-median debtor, the court has more flexibility in determining whether the expenses of the below-median income debtor are reasonably necessary.").

In re Dew, 344 B.R. 655, 660-61 (Bankr. N.D. Ala. June 21, 2006) (For most debtors with CMI less than applicable median family income, projected disposable income calculation begins with CMI and then expenses are deducted consistent with Schedules I and J. "Section 1325(b)(2) provides that 'disposable income' is determined by subtracting from 'current monthly income' the reasonably necessary expenses incurred for the maintenance and support of the debtors and their dependents, charitable contribution (within limits), and if the debtors are engaged in business, necessary business expenses. . . . [N]one of these Debtors has currently [sic] monthly income greater than the applicable median income. Thus, these Debtors' disposable incomes are not to be determined under the Form B22C formula . . . . [H]ow should a below median income debtor's disposable income be calculated? The answer appears to be the old fashioned way: '[I]t does not appear that Congress has mandated monthly net income as the presumptive amount debtors must pay into a chapter 13 plan, preserving judicial discretion in that respect. . . . [F]or debtors in this category one might correctly assume that the courts will continue to apply the pre-BAPCPA approach.' . . . [I]n determining whether a below median income debtor is offering all of his projected disposable income under a plan, the first step, and in most cases the last step, is to look at the debtor's Schedules I and J. If the Schedules are accurately completed in good faith and plan payments are substantially the same as the debtor's monthly net income shown on Schedule J, then the Court will conclude that the debtor is offering his projected disposable income under his plan as required by Section 1325(b)(1)(B).").

In re Fuller, 346 B.R. 472, 483-85 (Bankr. S.D. Ill. June 21, 2006) ("Under BAPCPA, below-median income debtors calculate their expenses the same way they did before BAPCPA—by recording the actual expenses they incur each month on their Schedule J (and now, on their Form B22C). . . . [U]sing the six months of pre-petition expenses will not always give a true picture of how much of the debtor's income truly is 'disposable,' and thus able to be committed to the plan. In such cases, parties should subtract prospective expense numbers—the expenses they actually expect to incur—from their income to calculate projected disposable income. . . . [F]or purposes of Form B22C, a below-median debtor's expenses are those they actually expect to incur (subject to a determination of reasonableness by the court if there is an objection) . . . . For the below-median income debtor, the allowed expense deductions for the purposes of calculating 'projected disposable income' should be the Schedule J expenses.").