§ 111.2 — Feasibility Turned on Its Head after BAPCPA
Revised: March 28, 2006
The requirement for confirmation in § 1325(a)(6) that the debtor “will be able to make all payments under the plan and to comply with the plan” was not amended by BAPCPA.1 However, BAPCPA dramatically changed the way bankruptcy courts evaluate whether a Chapter 13 plan is feasible.
Before BAPCPA, the feasibility test in § 1325(a)(6) measured the outer boundary of the effort permitted of a Chapter 13 debtor to pay creditors through a plan. The entitlements of secured and unsecured creditors were measured backward from an actual budget, and bankruptcy courts routinely denied confirmation of plans that too optimistically proposed payments to creditors from income that was not reasonably available to the debtor.
BAPCPA disconnects the requirements for confirmation in Chapter 13 cases from the reality of any actual budget for the debtors. Current monthly income (CMI)—the platform from which payments to creditors in Chapter 13 cases are calculated—bears no predictable relationship to the debtor’s actual financial circumstances at the time of confirmation.2 The “budget” that determines the entitlement of unsecured creditors under the disposable income test in § 1325(b) is artificially conceived by BAPCPA—especially with respect to Chapter 13 debtors with CMI greater than applicable median family income.3
The feasibility test in § 1325(a)(6) measures the debtor’s ability to make payments under the plan at the time of confirmation. CMI is based on static historical information—the debtor’s income during the six months prior to the month in which the Chapter 13 case was filed.4 After BAPCPA, some Chapter 13 debtors will have CMI greater than their actual ability to pay unsecured creditors.5 This will be an odd and fundamentally insulting outcome. Debtors who have experienced recent financial reverses or substantial increases in expenses will be unable to confirm a Chapter 13 plan because an irrelevant mathematical calculation of CMI based on facts that are distant in time says that the debtor should be able to pay more to unsecured creditors than the debtor is actually able to pay. There is no logic to this outcome.
The result is that the feasibility test in § 1325(a)(6) has been stripped of much of its meaning by BAPCPA. For under-median-income Chapter 13 debtors, the use of CMI as the financial measuring stick will distort the budgets in Chapter 13 cases. Chapter 13 trustees will still exercise some control over expenses. In under-median-income cases, § 1325(a)(6) will have some vitality as a test of whether the debtor can make payments under the plan.
For Chapter 13 debtors with CMI greater than applicable median family income, neither the income nor the expense side of the feasibility test will be based on financial reality. The amount the debtor must pay to unsecured creditors—determined by the disposable income test in § 1325(b)—has no certain relationship to the debtor’s actual income and expenses after BAPCPA.6 The demands of confirmation are no longer driven backward from the debtor’s actual budget. Feasibility will measure apples against oranges: the reality of the debtor’s true financial circumstances against the unreality of what BAPCPA says over-median-income debtors “should” pay creditors.
1 See § 198.1 [ Able to Make Payments and Comply with Plan ] § 111.1 Able to Make Payments and Comply with Plan.
2 See 11 U.S.C. § 101(10A), discussed in §§ 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19 Form 122C-1: Statement of Current Monthly Income, 468.1 [ Current Monthly Income: The Baseline ] § 92.3 Current Monthly Income: The Baseline and 494.1 [ Projected Disposable Income ] § 101.1 What Do Unsecured Creditors Get?.
3 See discussion beginning at § 94.1 Big Picture: Too Many Issues.
4 See § 468.1 [ Current Monthly Income: The Baseline ] § 92.3 Current Monthly Income: The Baseline.
5 See § 470.1 [ Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Applicable 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.
6 See § 494.1 [ Projected Disposable Income ] § 101.1 What Do Unsecured Creditors Get?.
Mort Ranta v. Gorman, 721 F.3d 241, 253-54 (4th Cir. July 1, 2013) (Gregory, Agee, Faber) (Although Social Security income is excluded from CMI and from projected disposable income, Social Security income can be considered to determine feasibility for § 1325(a)(6) purposes. "[I]t has long been established that Social Security income may be used to fund a Chapter 13 plan. . . . We therefore hold, in agreement with [Baud v. Carroll, 634 F.3d 327 (6th Cir. Feb. 4, 2011) (Cole, Clay, Katz),] . . . that 'a debtor with zero or negative projected disposable income may propose a confirmable plan by making available income that falls outside of the definition of disposable income—such as . . . benefits under the Social Security Act—to make payments under the plan.'. . . [W]hen a Chapter 13 debtor proposes to use Social Security income to fund a plan, the bankruptcy court must consider that income in evaluating the plan's feasibility under § 1325(a)(6).").
In re Menjivar, No. CV 17-4090-DOC, 2018 WL 4616340 (C.D. Cal. Sept. 24, 2018) (Carter) (Chapter 13 case was appropriately dismissed for “infeasibility” when bankruptcy court resolved claim objection with finding that mortgage arrearage was $212,139.92 and debtor could not possibly pay that amount from monthly net income of $825.).
Ekweani v. Thomas, 574 B.R. 561 (D. Md. June 26, 2017) (Bredar) (In sixth bankruptcy case filed by the debtor and/or the debtor’s spouse to stop foreclosure by Wells Fargo, plan is not feasible that proposes monthly payments of $1,388.72 when amount necessary to cure default on mortgage was $354,048.33.).
Ruskin v. Blackshear (In re Blackshear), 531 B.R. 711, 719 (E.D. Mich. May 20, 2015) (Duggan) (Feasibility was supported by absence of evidence that nonfiling spouse would be unable or unwilling to contribute $600 per month to family budget. "[T]here is nothing in the record suggesting a 'clear inability' of the husband to contribute to household expenses in the designated amount of $600, and there is thus nothing to suggest that Blackshear will falter on her plan payments because of her husband's failure to contribute. The Bankruptcy Court's conclusion on feasibility is entitled to deference on review and will not be disturbed.").
Austin v. Bankowski, 519 B.R. 559, 567 (D. Mass. Sept. 25, 2014) (Young) (Speculative nature of pending loan modification supported conclusion that plan was not feasible. "[W]ithout a confirmed loan modification her actual future financial obligations are entirely speculative . . . . [T]he Bankruptcy Court did not have the means to determine whether [debtor], if a modification did eventuate, would be able to meet the requirements of that agreement whilst still complying with the terms of the Proposed Plan.").
Mycek v. Danielson (In re Mycek), No. 5:15-cv-00369-JGB, 2013 WL 9994332, at *4 (C.D. Cal. Oct. 22, 2013) (unpublished) (Bernal) (Error for bankruptcy court to elevate burden of proof with respect to feasibility when debtor proposed zero percent plan. "Because Appellant proposed a zero percent plan, the Bankruptcy Court here required additional evidence to prove feasibility of the plan. The Bankruptcy Court did not cite to any federal law, federal rules, or local rules to support its additional requirement. . . . The Bankruptcy Court's determination of feasibility should be based upon the facts before the court at the time of confirmation rather than hypothetical scenarios. . . . [T]he Bankruptcy Court stated that 'the need to satisfy the elements of Section 1325(a)(6) are highest in zero percent cases.' . . . While the percentage paid to unsecured creditors is relevant to the determination of good faith under the totality of circumstances, it is unclear why that factor is relevant to the feasibility of a Chapter 13 plan. . . . [T]he Bankruptcy Court erred in using the percentage of payment to determine whether Appellant provided sufficient evidence that the proposed plan is feasible.").
United States Bank, N.A. v. Boardman, No. C 11-04788 CRB, 2012 WL 5914264 (N.D. Cal. Nov. 26, 2012) (Breyer) (Feasibility was based on $400,000 loan from debtor's mother to pay secured portion of bifurcated mortgage. That postpetition payments were current was evidence of ability to make plan payments.).
In re Reynolds, 587 B.R. 347, 348–49 (Bankr. N.D. Ill. July 25, 2018) (Schmetterer) (Section 2.1 of National Model Plan does not resolve fatal ambiguity when plan requires distribution of $54,000 but plan only proposed 36 monthly payments totaling $32,400. Math does not work and ambiguity remains notwithstanding standard-form provision that would allow additional payments after 36-month term. “[T]he amount of plan payments calculated in Section 2.1 of Debtor’s plan totals only $32,400.00, less than the estimated $54,000.00 promised by the plan to be disbursed by the Trustee. However, Debtor points to the line just below Section 2.1 of the National Chapter 13 Plan (recently adopted in this circuit) . . . . He argues that the language of the National Chapter 13 Plan expressly requires that ambiguous or unspecified payments beyond the listed plan duration be paid by the debtor should they be necessary to pay creditors specified in the plan. . . . While the language of the National Plan may sometimes act as a savings clause to a sum certain to be paid to creditors, that is not necessarily the case here. . . . This level of ambiguity in Debtor’s plan renders it unconfirmable.”).
In re Colosi, No. 17-24458 (JNP), 2018 WL 2972342, at *6 (Bankr. D.N.J. June 8, 2018) (unpublished) (Poslusny) (Plan not feasible that depends on modification of first mortgage when debtors applied unsuccessfully six times for loan modifications. “The Plan relies on a loan modification. Plans that rely on loan modifications are not unfeasible per se. But the fact that the Debtors have been denied a loan modification at least six times casts doubt on the feasibility of the Plan and the likelihood that they will be successful in obtaining a loan modification.”).
In re Ewing, 583 B.R. 252 (Bankr. D. Mont. Feb. 28, 2018) (Hursh) (Plan dependent on success of custom farming on land owned by debtor’s parents is feasible under § 1325(a)(6).).
In re Gonzales, No. 17-50150-rlj13, 2018 WL 501332 (Bankr. N.D. Tex. Jan. 19, 2018) (Jones) (Plan is not feasible because required payments exceed debtor’s ability to pay without unspecified income from odd jobs and contributions from family.).
In re Bennett, No. 17-60065-13, 2017 WL 2198951 (Bankr. D. Mont. May 18, 2017) (Hursh)
(Plan that proposes total payments of $27,600 fails feasibility requirement in § 1325(a)(6) when former spouse’s domestic support obligation claim is allowed in the amount of $37,926.33
In re Cochran, 555 B.R. 892 (Bankr. M.D. Ga. Sept. 1, 2016) (Carter) (A balloon payment of $650,000 residential mortgage within 12 months of confirmation is feasible based on testimony that bank is likely to refinance once the debtor establishes an income history sufficient to support the loan.).
In re Gelhaar, No. 15-20540-GMH, 2016 WL 3461913, at *2 (Bankr. E.D. Wis. June 17, 2016) (Halfenger) (Plan is feasible that proposes to sell closely held stock and distribute proceeds to unsecured creditors when there is no evidence that debtors are unable to sell the stock. “If the Gelhaars can satisfy § 1325(a)(4)’s best-interests requirement by committing to sell the stock through a less costly chapter 13 process, then they can satisfy § 1325(a)(6)’s ability-to-make-plan-payments requirement by establishing their ability to sell the stock during the plan term.”).
In re Ladieu, No. 14-10551, 2015 WL 3503941, at *14-*15 (Bankr. D. Vt. June 1, 2015) (Brown) ("'[A] debtor proposing a Chapter 13 plan need not prove that the plan is guaranteed to be successful. Virtually every plan that requires some performance in the future will be subject to a risk factor affecting its successful completion.' . . . As of now, the Debtor's plan is feasible. . . . The Debtor's ability to make the plan payments is not dependent on some speculative future event . . . but rather is based on actual income the Debtor and his spouse currently earn and the Debtor has reason to expect they will continue to earn during the term of the plan. That is sufficient for this Court to conclude the plan as proposed is feasible. The Court does not have a crystal ball it can consult to predict whether the Debtor's income and expenses will remain stable and sufficient for the term of the plan. The mere possibility the Debtor and his family may suffer some future financial calamity which could interfere with his ability to meet his monthly expenses is nothing more than many people face—both inside and out of bankruptcy. It is not sufficient to justify a finding the plan is not feasible.").
In re Deutsch, 529 B.R. 308, 312-14 (Bankr. C.D. Cal. Apr. 20, 2015) (Yun) (Plan dependent upon $700-per-month contribution from debtor's boyfriend and/or mother is not feasible under § 1325(a)(6) because of lack of proof of commitment and ability to make contributions—notwithstanding declarations and testimony from boyfriend and mother. "Reliance on contributions from family is disfavored, but not prohibited. . . . Mayo is the Debtor's boyfriend . . . the relationship is relatively recent . . . there is not a reliable relationship or strong motivation to continue making the contributions over the five-year length of the Plan. . . . At this time, the contributions have presumably continued for only five or six months, and this is a far cry from the numerous years that other courts have found persuasive. . . . [B]ecause Valle is the Debtor's mother . . . it could be inferred that the familial connection provides her motivation for supporting the Debtor. . . . However, the Debtor is an adult . . . there is no evident legal or moral obligation for Valle to support her adult daughter. . . . There is no indication that Valle has a history of contributing money to the Debtor or supporting her in any manner as an adult.").
In re Milstein, No. 13-17286 HRT, 2014 WL 3511526, at *3 (Bankr. D. Colo. July 15, 2014) (Tallman) (Plan not feasible that relied on lump-sum payment from "hoped for favorable litigation outcome . . . . Plans that propose to make a late or end-of-plan balloon payment can rarely meet the Code's feasibility requirement for plan confirmation. . . . The cases that propose to fund such a one-time payment from a litigation recovery are simply a class of those balloon payment cases where the speculative nature of the final payment is clear on the face of such a plan. Regardless of how much the Debtor believes in the merits of his position, he has not met his burden to show that his Plan is feasible under § 1325(a)(6).").
In re Moore, No. 12-06421-8-RDD, 2013 WL 3965131, at *1 (Bankr. E.D.N.C. July 31, 2013) (Doub) (Applying Ranta v. Gorman, No. 12-2017, 2013 WL 3286252 (4th Cir. July 1, 2013) (Gregory, Agee, Faber), plan not feasible when debtor refuses to allow consideration of Social Security income in feasibility analysis under § 1325(a)(6). "Debtor made it crystal clear that no portion of his Social Security income would be pledged to make the plan feasible." Also, debtor not entitled to refund of $25 paid from Chapter 13 estate by trustee as filing fee for objection to confirmation and motion to reconvert to Chapter 7.).
In re Roberts, 493 B.R. 584, 596 (Bankr. D. Kan. June 20, 2013) (Berger) ("[T]he schedules show that even though the Plan payments are high, the Debtors can meet their expenses and the Plan is feasible.").
In re Moore, No. 12-06421-8-RDD, 2013 WL 3013650, at *2 (Bankr. E.D.N.C. June 18, 2013) (Doub) (Plan not feasible when Social Security income is excluded from calculation of CMI and from plan payment. "[T]he Court must rely on the Debtor's most recently amended Schedules I and J, which exclude the combined Social Security income and reflect a negative net monthly income of $365.17. Based on this calculation, the Court is unable to find that the Debtor will be able to comply with the Plan as proposed. The Plan is not feasible under § 1325(a)(6) . . . . The Debtor and his spouse have a combined monthly income of $2,430.70, excluding Social Security income. The Debtor claims household expenses of $2,795.87, but fails to apply any of the Social Security income to these expenses. Were the Debtor to apply the $1,799.00 in Social Security income to the household expenses this would leave $1433.83 in non-Social Security income available for payment to creditors. Applying the Debtor's household income in this manner would not frustrate the purpose of 42 U.S.C. § 407(a) . . . . The Debtor has sufficient income to fund a plan that generates a fair dividend to unsecured creditors without depriving him of the ability to meet his basic living expenses. . . . [T]he Debtor is ORDERED to file a confirmable amended plan, which complies with § 1325(a)(6) . . . . Should the Debtor fail to file an amended plan . . . , this case shall be converted to Chapter 7 without further hearing.").
In re Everhart, No. 12-09569-A13, 2013 WL 176144 (Bankr. S.D. Cal. Jan. 16, 2013) (unpublished) (Adler) (Although debtor had limited income and strained monthly budget, plan was feasible based on family members who resided with debtor and regularly contributed to expenses.).
In re Terry, No. 12-04626-dd, 2013 WL 121240 (Bankr. D.S.C. Jan. 8, 2013) (Duncan) (Although debtors' attorney should not propose plan dependent on HAMP loan modification without considering feasibility, per se bar was not appropriate. Trustee's motion for sanctions denied but fees reduced because plan was not confirmable and feasibility was dependent on speculative modification.).
In re Gallagher, No. 2:12-bk-10213-NB, 2012 WL 2900477 (Bankr. C.D. Cal. July 12, 2012) (Bason) (Proposed plan was not feasible, because debtor lacked monthly disposable income necessary to cure mortgage arrearage.).
In re Morris, No. 09-06014-PB13, 2012 WL 2341537 (Bankr. S.D. Cal. June 7, 2012) (unpublished) (Mann) (On trustee's motion to modify confirmed plan to increase payments to unsecured creditors based on an increase in income, feasibility was dependent on future bonuses; court modifies plan to require debtors to make $42,187 payment each year in future from anticipated bonuses.).
In re Stanley, 441 B.R. 37 (Bankr. M.D.N.C. Aug. 19, 2010) (Waldrep) (Plan was not feasible when nonfiling spouse's unemployment income would end in two months, resulting in negative monthly net income.).
In re Dipman, No. 09-10620, 2009 WL 3633327 (Bankr. D. Kan. Oct. 29, 2009) (unpublished) (Nugent) (Plan lacked feasibility when Form B22C yielded negative number and debtors did not have disposable income sufficient to make proposed payments.).
In re Acosta, No. 08-11411, 2009 WL 2849096, at *3 (Bankr. N.D. Cal. May 7, 2009) (Jaroslovsky) (Plan paying "adequate protection" for 48 months with refinance between 48 and 60 months fails feasibility requirement in § 1325(a)(6). "[T]here is simply no way that a debtor can show that a sale or refinance which cannot be done today will be feasible in four or five years. . . . There is no way the court can make the finding, required by § 1325(a)(6), that the debtors will be able to comply with the plan based on these specious arguments.").
In re McSparran, 410 B.R. 664 (Bankr. D. Mont. Mar. 27, 2009) (Kirscher) (Debtor failed to prove feasibility under § 1325(a)(6) when Part I of Form B22C does not account for nonfiling spouse's income and that income is necessary to make payments required by plan. "Debtor offered no testimony or other evidence showing that he will be able to make the increased payments under the plan after the first 20 months.").
In re Butler, 403 B.R. 5 (Bankr. W.D. Ark. Mar. 17, 2009) (Barry) (Plan fails feasibility test because insufficient money will be paid to trustee to cover adequate protection payments and the payment of administrative expenses and to then make equal monthly payments to retire balance of allowed secured claims.).
In re Daher, No. 08-12436-JNF, 2008 WL 3906787 (Bankr. D. Mass. Aug. 20, 2008) (unpublished) (Feeney) (Evidentiary hearing necessary to determine whether debtor's sons are able to contribute income necessary to render plan feasible.).
In re Dugan, No. 07-40899-13, 2008 WL 3558217, at *7 (Bankr. D. Kan. Aug. 12, 2008) (Karlin) (Plan fails feasibility test when marital adjustment at Lines 13 and 19 of Official Form B22C indicates that money needed to fund plan is not available because it is used by nonfiling spouse for her separate monthly expenses. "[I]f the non-filing spouse actually does not make $500 of her income available to Debtor each month (i.e., the amount of the marital adjustment claimed on Lines 13 and 19), then Debtor's plan is not feasible. . . . [I]f we back out the $500 that Debtor is representing, under oath, is unavailable to him from his spouse's income, this only leaves $3,182 in net joint income against expenses of $3,576. These numbers demonstrate that Debtor would be unable to fund this plan.").
In re Linn, No. 07-1593, 2008 WL 687448, at *3-*4 (Mar. 10, 2008) (Flatley) (When calculation of projected disposable income consistent with BAPCPA will require payments that exceed feasibility boundary in § 1325(a)(6), adhering to § 1325(b) would be "absurd" and statutory test must be abandoned. Because postpetition income was less than current monthly income, amount required to satisfy disposable income test exceeded debtor's ability to pay. Trustee objected to debtor's proposal to pay less than all disposable income. "[T]he Debtor cannot confirm a plan that pays $303 per month in light of the Trustee's 11 U.S.C. § 1325(b) disposable income objection, and cannot confirm a plan that pays $533 a month, as required by § 1325(b), because the Debtor simply does not have the funds to make that payment on a monthly basis. . . . [T]he results of adhering to § 1325(b) disposable income test in this case is [sic] more than unwise, it is [sic] absurd and therefore should not be followed. . . . [T]he court will not follow the results mandated by 11 U.S.C. § 1325(b) when doing so would render a debtor's plan infeasible. . . . When the calculation of a debtor's 'current monthly income' . . . is greater than the debtor's actual monthly income . . . and the result of the disposable income calculation renders the Chapter 13 plan infeasible, the result mandated by § 1325(b) will not be followed. Lacking a useable disposable income test under § 1325(b), the court will determine the extent of a debtor's disposable income by examining Schedules I and J, pursuant to the requirement of § 1325(a)(3) that the Debtor propose a plan in good faith.").
In re Miller, 381 B.R. 736, 739-41 (Bankr. W.D. Ark. Jan. 29, 2008) (Barry) (Applying Coop v. Frederickson (In re Frederickson), 375 B.R. 829 (B.A.P. 8th Cir. 2007), when CMI is greater than actual income at time of confirmation, Chapter 13 debtors may be unable to propose feasible plan; conversion to Chapter 7 remains possible because § 707(b) may not apply at conversion. "[I]n each of the cases before the Court, the debtors were required to figure their respective disposable incomes by averaging their monthly income for the six months preceding the filing of their bankruptcy petitions. In most of these cases, that resulted in a disposable income figure that exceeds the debtors' present (and actual) disposable income. . . . Unfortunately, most of the debtors in these cases have actual income that is sufficiently below the code-defined current monthly income, and may not be able to propose a feasible plan. . . . [I]f a chapter 13 debtor cannot propose a feasible plan because of Form B22C's required computation of disposable income, this Court believes that conversion to chapter 7 remains viable. . . . [Section] 707(b) may not even apply to a debtor who files a case under chapter 13 in good faith but is unable to propose a feasible plan based on Congress's mandated means test for above income debtors. It is incongruous to require the debtor to follow a code mandated formula to determine disposable income in a chapter 13 case, and then not allow the same debtor relief under another chapter when the debtor cannot propose a feasible plan because of that code mandated formula.").
In re Lacny, No. 07-50184, 2007 WL 3216627, at *2 (Bankr. E.D. Ky. Oct. 25, 2007) (Scott) ("The schedules of all five Debtors show a negative monthly net income. However, it is unexplained how the Debtors propose making at least a small monthly plan payment when they live 'in the hole' by hundreds of dollars each month. It is axiomatic that either the Schedules are incorrect or the Debtors will be unable to fund a plan payment and must be precluded from a Chapter 13.").
In re Cordova, No. 13-07-10950 MS, 2007 WL 2077633, at *3 (Bankr. D.N.M. July 16, 2007) (Plan is not feasible because Schedule J does not show sufficient income to make proposed plan payment. "A Debtor's wishful thinking about future income, anticipated new employment, and/or supplemental income sources fails to satisfy the feasibility requirement of 11 U.S.C. § 1325(a)(6)." Also, "Debtor failed to commence making payments under his proposed plan. The length of the plan as proposed is the sixty-month maximum allowed under 11 U.S.C. § 1322(d). Debtor cannot, therefore, cure the delinquent plan payments by extending the term of his plan.").
In re Kampf, No. A07-00136-DMD, 2007 WL 1673764 (Bankr. D. Alaska June 8, 2007) (Plan is not feasible that fails to provide enough funding to pay adequate protection to car lenders and also pay secured claims and administrative expenses; adequate protection payments cannot be lowered in early months after confirmation to accommodate payment of fees to debtor's attorney when sum of payments to secured creditors, mortgage arrearages and trustee compensation exceeds monthly payment in plan.).
In re Pohl, No. 06-41236, 2007 WL 1452019, at *4-*5 (Bankr. D. Kan. May 15, 2007) (Debtors with zero CMI because their only source of income is Social Security can voluntarily commit income to funding a plan, but if they do, they must commit for minimum 36 months required of below-median-income debtor. "If the Court was bound to use the statutorily defined 'CMI,' without looking behind the type of income being received, for debtors whose sole, or majority, of income was derived from social security or from war crime reparations or the like, those classes of potential Chapter 13 debtors could by definition never propose a feasible Chapter 13 plan. The Court finds nothing in the statute or the scant legislative history of BAPCPA to suggest that Congress intended for those persons to be effectively precluded from proceeding under Chapter 13. . . . [D]ebtors with zero 'CMI' (or a negative CMI in the case of some above-median income debtors) can voluntarily agree to devote part or all of their actual income, reported on Schedule I, as income they 'project' to receive during the lifetime of the proposed Chapter 13 plan . . . . [A]lthough this Court could not force these Debtors to use their excludable income (social security) to fund a plan, if they elect to get the benefits and protections afforded by a Chapter 13 bankruptcy proceeding, they must agree to devote to a Chapter 13 plan their excess disposable income for the minimum time now required by BAPCPA, which is 36 months.").
In re Siegel, No. 06-02291-dd, 2006 WL 3483987, at *2 (Bankr. D.S.C. Nov. 20, 2006) (unpublished) (Although Social Security benefits are excluded from CMI, debtors can satisfy disposable income and feasibility tests for confirmation by voluntarily committing some or all Social Security benefits to plan. "In light of the exclusion of Social Security benefits from the current monthly income calculation, the Court cannot compel the Debtors to fund a plan using this income. This does not preclude the Debtors' option of 'voluntarily devoting a portion of that income to a chapter 13 plan.' . . . The Court may consider the voluntarily devoted Social Security benefit as income in the disposable income and feasibility analyses.").
In re Girodes, 350 B.R. 31, 38 n.6 (Bankr. M.D.N.C. Sept. 20, 2006) (For debtor with CMI less than applicable median family income, projected disposable income is determined by subtracting Schedule J expenses from CMI determined in Part I of Form B22C; Schedules I and J are relevant "only to determine feasibility." That net available from Schedules I and J is $150 "has no meaning for confirmation purposes other than to show that the plan is feasible" when debtor's CMI less Schedule J expenses results in disposable income of only $40.42 per month.).
In re Hall, 346 B.R. 420 (Bankr. W.D. Ky. July 31, 2006) (Schedules I and J do not show sufficient monthly disposable income to make payment proposed in plan.).
In re Alexander, 344 B.R. 742, 750 & n.5 (Bankr. E.D.N.C. June 30, 2006) (Chapter 13 debtor can confirm plan notwithstanding that disposable income calculation shows no available funds for unsecured claim holders. "To veterans of Chapter 13 practice, it runs afoul of basic principles to suggest that a debtor with no disposable income can nonetheless propose a confirmable plan. Yet BAPCPA permits precisely that. Because the pre-BAPCPA definition of 'disposable income' calculated a real number rather than a statutory artifact, it largely mirrored § 1322(a)(1)'s basic requirement that the debtor have future earnings or income 'as is necessary for the execution of the plan.' 11 U.S.C. § 1322(a)(1). Because disposable income largely took into consideration all income and all expenses, a debtor with no positive number simply had no means to fund the added costs of a Chapter 13 plan. The result is different under BAPCPA. . . . [B]ecause a debtor has income not counted in the definition of current monthly income, has housing or transportation expenses less than the permissible IRS deductions, has huge secured debt for luxury items that, bizarrely, may be deducted in full as a reasonable and necessary expense, or wishes to continue to contribute to or repay a loan to her 401(k) plan rather than pay her unsecured creditors, a debtor under the new 'disposable income' test may show a zero or negative number, yet may be able to make the required showing that she actually has enough income to fund a confirmable plan. The debtor is at least entitled to try." In a footnote, "[p]lan feasibility is no longer dictated by the disposable income calculation. The court disagrees with the outcome in [In re Schanuth, 342 B.R. 601 (Bankr. W.D. Mo. 2006),] where the court determined that the debtors' plan was infeasible because the debtors' plan payments exceeded disposable income as calculated under the new law.").
In re Schanuth, 342 B.R. 601, 605 (Bankr. W.D. Mo. May 25, 2006) (Using CMI from Form B22C and expenses from Schedule J, debtors have disposable income of $23.50 per month, which is insufficient to fund proposed $300-per-month payment; confirmation denied on feasibility ground notwithstanding that "there is nothing in the statute that precludes the Debtors from voluntarily devoting a portion of [Social Security benefits] to a chapter 13 plan or that prevents the Court from considering that income in evaluating the feasibility of a plan proposed by the Debtors.").