§ 12.11 — Income from Leasing, Selling or Liquidating Assets
Revised: April 26, 2016
That regular income for eligibility purposes1 might come to a Chapter 13 debtor from the use, sale or lease of real or personal property seems self-evident, yet the proposition has produced much controversy. When the debtor is engaged in business and generates income from the sale of inventory, that income has as its source the liquidation of estate property. No one would dispute that under those circumstances, regular income for eligibility purposes can be sourced from the sale of estate property. But when the debtor is not engaged in business and proposes to fund the plan from the sale or use of estate property, too many courts have declined to find regular income for a variety of reasons.
Chapter 13 debtors sometimes have property that could be converted to cash to pay some or all of the claims of creditors. A Chapter 13 plan for such a debtor might propose to sell or lease the property and pay creditors from the proceeds. Regular income for eligibility purposes, in whole or part, would be the proceeds from the use or sale. When the plan calls for a single distribution of sale proceeds, the proceeds from that single event are the income that funds the plan. Nothing in the Bankruptcy Code prohibits confirmation of a plan that pays creditors in whole or in part from a one-time liquidation of an asset. Income sufficiently stable and regular to fund such a plan could come from the sale or use of a debtor’s property. The regular income condition for eligibility does not require more.
But many reported decisions reject the proposition that a debtor is eligible for Chapter 13 when the source of income is liquidation of the debtor’s property.2 Some decisions seem to say that the debtor can supplement payments under a Chapter 13 plan with the proceeds of the sale of estate property but may not offer a liquidating sale as the only source of regular income.3 One court held that when the proposed monthly payments under the plan are de minimis in comparison to the amount that will be paid to creditors from the sale of property, the plan may technically meet the eligibility requirements of § 109(e) but is in reality a “liquidation plan” that cannot be confirmed.4 Another court observed that the definition of regular income in § 101(30) requires income sufficiently regular to make “payments under a plan”—not necessarily “all payments.”5 This court held the debtor was eligible when the plan proposed to make minimum payments from predictable monthly income and fund the balance of the plan from the sale or refinancing of the debtor’s home in the 36th month.6 Other courts stop short of holding that debtors are not eligible to fund plans from the sale of property and instead have treated the sale issue as a feasibility question at confirmation.7
It is not obvious why a sale of nonbusiness property is any less regular income than, for instance, the sale of a Chapter 13 farm debtor’s crop at harvest. Nowhere does the Bankruptcy Code require that the source of regular income for eligibility purposes must be external to the estate. Quite the contrary, it was clearly the intent of Congress to permit self-employed debtors to be eligible for Chapter 13;8 thus it is logical that the sale of estate property might be a source of regular income. Enlightened courts have recognized that 11 U.S.C. § 1322(b)(8) permits the funding of a Chapter 13 plan from the sale of a debtor’s property because that section contemplates the retirement of claims “from property of the estate or property of the debtor.”9
Many of the Chapter 13 cases discussing the meaning of income do so in the context of the projected disposable income test at confirmation or at modification of a plan after confirmation.10 Some of these opinions suggest that income may have different meanings in a Chapter 13 case depending on the point in time at which the question is addressed—a noncash asset at the petition may be excluded from regular income for § 109(e) purposes; that same asset converted to cash during the Chapter 13 case is at risk of capture as projected disposable income at modification after confirmation under § 1329.11
The cases holding that the projected disposable income test at confirmation under § 1325(b) captures money the debtor receives from the liquidation of estate property are not uniform.12 For example, Watters v. McRoberts (In re Watters)13 holds that a Chapter 13 debtor’s potential recovery from a personal injury action is projected disposable income for purposes of the confirmation test in § 1325(b)(1)(B).14 At the filing, the debtor’s personal injury action was an asset of the Chapter 13 estate.
In contrast, in In re Moore,15 the debtor’s car was converted to cash when insurance proceeds were paid at destruction of the car after confirmation. The court concluded that the cash was not income for purposes of the disposable income test because “the mere conversion of the debtor’s preconversion assets from one form to another (even cash) does not produce income.”16
Interaction of the disposable income test at confirmation and the regular income requirement for eligibility has produced strange outcomes when the plan contemplates the sale, liquidation or conversion of assets to cash. For example, in In re Porter,17 the debtors voluntarily sold real property before the petition, and the bankruptcy court concluded that the unencumbered proceeds were disposable income in the Chapter 13 case. Nonetheless, the court found that the debtors lacked “regular income” because the plan proposed to pass along to unsecured creditors “a relatively small, one-time, arbitrary amount of the sale proceeds” while the debtors retained equity for themselves.18
In Chapter 13 cases filed after October 17, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)19 includes in “current monthly income” for purposes of the projected disposable income test “income from all sources that the debtor receives . . . without regard to whether such income is taxable income” derived during the six-month period before the month in which the petition is filed.20 This broad conception of income for projected disposable income test purposes at confirmation could be interpreted to include “income” from the sale or lease of property during the six months before the petition. The form that implements the BAPCPA conception of current monthly income—Official Form 122C-1—requires a report of income from “rental and other real property.”21 A sale of property during the six months before the petition could produce “income” for purposes of the current monthly income calculation at confirmation.22 It would be odd that a prepetition sale event producing income would be included in the entitlement of unsecured creditors at confirmation but the proceeds from a proposed postpetition sale would not be considered income for eligibility purposes.
The Supreme Court’s analysis of current monthly income for purposes of the projected disposable income test at confirmation could affect analysis of income for eligibility purposes when the debtor contemplates liquidation of an asset to fund the plan. Detailed elsewhere,23 in Hamilton v. Lanning,24 the Supreme Court held that projected disposable income includes changes in income that are “known or virtually certain” at the time of confirmation. Although the word “projected” appears nowhere with respect to income for eligibility purposes, the reasoning in Lanning could morph to suggest that “known or virtually certain” sources of income at the petition—including proceeds from liquidation of an asset—are considered in the determination whether the debtor has regular income for eligibility purposes.
These issues swirled together before the bankruptcy court in In re Brown.25 The trustee in Brown argued that the cash surrender value of a life insurance policy was income for purposes of the projected disposable income test at confirmation. At the petition in Brown, the debtors were not drawing against the cash surrender value of the life insurance policy, but the trustee argued that the debtors could do so and produce income that would be regular and predictable.
The bankruptcy court rejected this argument on several grounds. Citing McDonald v. Burgie (In re Burgie),26 the court stated, “‘ . . . If the asset is not a stream of payments, it is not included.’”27 The court explained that “increases in the value of a debtor’s assets are not ‘income’ for purposes of determining disposable income. . . . [C]ourts have repeatedly held that ‘[o]nly regular income and substitutes therefor can be counted in the determination of disposable income for the purposes of the Chapter 13 test.’”28 With respect to Lanning, the Brown court stated, “[T]he trustee has provided no evidence that a change in the Browns’ income is, as [Hamilton v. Lanning, 560 U.S. 505, 130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010),] requires, ‘known or virtually certain’ at the time of confirmation. . . . To the contrary, the trustee points only to an expected future increase in the value of an asset owned by the debtors.”29
For lots of reasons30 it is dangerous to use projected disposable income test analysis to determine whether a debtor has regular income for eligibility purposes. But Brown illustrates the tendency of bankruptcy courts to do just that. If the debtor’s eligibility in Brown depended upon use of the cash surrender value of the life insurance policy to pay creditors, could the debtors have passed the eligibility test by voluntarily agreeing to draw against the cash surrender value? Would it have made a difference if the draws were “periodic—producing a stream of income for purposes of the Ninth Circuit BAP’s concerns in Burgie? The “known or virtually certain” test for income in Lanning is a huge temptation in the eligibility context: debtors with assets that can be readily liquidated will cite the Supreme Court in support of including the proceeds of a proposed liquidation in income for eligibility purposes.
When a debtor sells an asset during the Chapter 13 case, the trustee and creditors will argue that the proceeds are income for purposes of the disposable income test and that the Chapter 13 plan should be modified to pay creditors the new cash realized from the sale.31 At the eligibility stage of the case, it is most unlikely that any Chapter 13 debtor would argue that the equity in a homestead or other estate asset is income for § 109(e) purposes. Is the potential income that inheres in the equity in any asset owned by the debtor properly accounted for as income either for eligibility or at confirmation? Does it make a difference if the ability to earn more income is a factor that must be considered by the court to determine whether the plan satisfies the disposable income test?32
Exemptions in the proceeds of a sale become important to both the eligibility and the confirmation issues. For example, one court held that the sale of a debtor’s homestead after confirmation did not generate projected disposable income for purposes of § 1325(b) because equity in the homestead was exempt property, and under § 522(c), exempt property is not liable for prepetition debts during the Chapter 13 case.33 Applying this logic, the proceeds from the sale of a debtor’s exempt homestead would not constitute income for eligibility purposes. Would it matter if the debtor waived the exemption in order to argue that the sale proceeds should be included in regular income?34 Could a debtor use § 522(f) to avoid a lien that impairs an exemption35 and then volunteer to use liquidation of the equity as income for § 109(e) purposes?36
Another court concluded that the exempt proceeds of life insurance are not projected disposable income for purposes of § 1325(b); however, interest earned on those proceeds is projected disposable income and must be paid to creditors under a confirmed plan.37 This logic would include a stream of income from an exempt asset in regular income for eligibility purposes, although the underlying exempt asset itself might be excluded from regular income.
Some of the decisions declining to include the liquidation of estate property as income express concern, if not outrage, that a debtor might escape Chapter 13 with a discharge after making only one (large?) payment. But it should be noted that nothing in Chapter 13 requires a particular number of payments as part of a Chapter 13 plan.38 At confirmation, § 1325(b) may require the debtor to contribute all projected disposable income for an “applicable commitment period” of three to five years,39 but that test is not an eligibility requirement; it can be satisfied with payments in less than three or five years,40 and this condition is a measurement of time, not a counting of payments into the plan.41 Some decisions after BAPCPA posit that debtors must sit in the Chapter 13 case for three or five years even when no payments are being made to creditors.42 Chapter 13 plans that propose to pay all creditors in full in less than three years have been confirmed over various objections. One court rejected a good-faith challenge to a plan that paid unsecured claim holders in full with a single payment.43 It is hard to distinguish a one-payment Chapter 13 plan from a plan that proposes to pay creditors in full from a sale of property of the estate.
Chapter 13 debtors who propose to fund plans from the sale of estate property bear a special burden to demonstrate that the sale can be timely accomplished and that sufficient income will be realized to fund a plan.44 When there is no equity in the debtor’s property, a sale will not produce regular income.45 When the debtor demonstrates a timely sale that is likely to fund a plan, regular income is present.46 If the proposed sale is speculative,47 it follows that the regularity of income is suspect and eligibility uncertain.
Income to a Chapter 13 debtor from leasing or renting estate property fits easily into the concept of regular income for eligibility purposes. It is generally held that rents for the use of estate property are property of the Chapter 13 estate and can constitute regular income.48 Evidence that rents are not certain or stable may defeat eligibility of a debtor dependent upon rents to prove regular income.49 That rents for the use of estate property are regular income for eligibility purposes but proceeds from the sale of that same property usually are excluded is consistent with the view of some courts that projected disposable income at confirmation includes a stream of income produced by an asset but not the asset itself.50
1 See 11 U.S.C. §§ 109(e) and 101(30), discussed in § 11.1 What Is Regular Income?.
2 See In re Gavia, 24 B.R. 573 (B.A.P. 9th Cir. Sept. 24, 1982) (Hughes, Katz, Elliott); In re O’Brien, No. 09-03088-8-JRL, 2009 WL 4884478, at *1 (Bankr. E.D.N.C. Dec. 10, 2009) (unpublished) (Leonard) (Citing Georgia Fed. Sav. & Loan Ass’n v. Anderson (In re Anderson), 21 B.R. 443, 445 (Bankr. N.D. Ga. Nov. 2, 1981) (Norton), “‘[b]asing a plan solely upon the liquidation of equity in a debtor’s residence does not satisfy the requirement of “regular income.”’”); Georgia Fed. Sav. & Loan Ass’n v. Anderson (In re Anderson), 21 B.R. 443 (Bankr. N.D. Ga. Nov. 2, 1981) (Norton).
3 In re Gavia, 24 B.R. 573 (B.A.P. 9th Cir. Sept. 24, 1982) (Hughes, Katz, Elliott). See In re Hogue, 78 B.R. 867 (Bankr. S.D. Ohio Oct. 8, 1987) (Cole) (Section 1322(b)(8) does not eliminate the regular income requirement of § 109(e). Debtors with regular employment who are submitting a portion of their monthly take-home pay to the trustee have regular income and are eligible notwithstanding that the plan also contemplates the sale or refinancing of a residence to complete payments.).
4 In re Lindsey, 183 B.R. 624, 626 (Bankr. D. Idaho May 12, 1995) (Hagan) (“The Code does not explicitly prohibit funding of Chapter 13 plans through the liquidation of assets. Partially funding a Chapter 13 through the sale of property is permitted by Code section 1322(b)(8). . . . Chapter 13 debtors may not fund a plan entirely from the sale of property. In re Gavia, 24 B.R. at 575. Nor may debtors use the sale of property to avoid the eligibility requirements of § 109(e). Therefore, debtors who have no disposable income with which to make payments under a Chapter 13 plan are not eligible for relief under Chapter 13 regardless of whether they can otherwise fund a plan through the sale of property.” The plan proposed to pay less than $7,000 from regular income at the rate of $125 per month and to pay approximately $450,000 from the liquidation of real property.).
5 In re Gillis, 333 B.R. 1 (Bankr. D. Mass. Oct. 14, 2005) (Somma).
6 In re Gillis, 333 B.R. at 8 (“[T]he requirement of regular income in § 109(e) is not a mandate that the debtor’s income be sufficient in amount, by itself, to fully fund the plan (or any specific portion thereof).”).
7 See In re Erickson, 176 B.R. 753 (Bankr. E.D. Pa. Jan. 25, 1995) (Scholl) (Rejecting per se analysis of Philadelphia Life Insurance Co. v. Proudfoot (In re Proudfoot), 144 B.R. 876 (B.A.P. 9th Cir. Sept. 14, 1992) (Jones, Russell, Ashland), and In re Gavia, 24 B.R. 573 (B.A.P. 9th Cir. Sept. 24, 1982) (Hughes Katz, Elliott), plan that proposes to sell property to pay creditors should be evaluated at confirmation as a feasibility question. Because the debtor failed to prove the “commitments” described in In re Newton, 161 B.R. 207 (Bankr. D. Minn. Nov. 30, 1993) (Kishel), confirmation of “sale” plan was denied.); In re Crowder, 179 B.R. 571, 574 (E.D. Ark. Mar. 22, 1995) (Scott) (Argument that income from rental house would help make plan payments was not convincing where the debtor was incarcerated and “the debtor’s vague testimony that the house was rented is insufficient to demonstrate eligibility or prove feasibility because she did not even know the amount of the rental payments.”). See also § 111.1 Able to Make Payments and Comply with Plan.
8 See § 12.1 Self-Employment.
9 See In re Van Winkle, No. 11-13861-j13, 2012 WL 404956 (Bankr. D.N.M. Feb. 8, 2012) (Jacobvitz) (Although some courts have held that debtor may not fund plan solely from sale of property, Code does not explicitly prohibit funding through asset liquidation, and § 1322(b)(8) provides that plan may provide for payment of all or part of claim from property of estate or of debtor.); In re Smith, 51 B.R. 273 (Bankr. D.D.C. Dec. 5, 1984) (Bason). See also § 74.5 Surrender or Sale of Collateral before BAPCPA.
13 167 B.R. 146 (S.D. Ill. Apr. 7, 1994) (Beatty).
14 Accord In re Pendleton, 225 B.R. 425 (Bankr. E.D. Ark. Sept. 29, 1998) (Mixon) (Proceeds from personal injury lawsuit are projected disposable income.); Gaertner v. Claude (In re Claude), 206 B.R. 374 (Bankr. W.D. Pa. Mar. 25, 1997) (Bentz) (Proceeds of personal injury settlement are included in projected disposable income.); In re Tomasso, 98 B.R. 513 (Bankr. S.D. Cal. Mar. 29, 1989) (Hargrove) (Nonexempt portion of a personal injury settlement received subsequent to the filing of the Chapter 13 petition would constitute projected disposable income for purposes of § 1325(b).). But see In re Ferretti, 203 B.R. 796 (Bankr. S.D. Fla. Sept. 10, 1996) (Cristol) (Settlement proceeds from prepetition automobile accident are not projected disposable income because debtor claimed the proceeds exempt under § 522(c).).
15 188 B.R. 671 (Bankr. D. Idaho Oct. 26, 1995) (Hagan).
16 In re Moore, 188 B.R. at 676.
17 Nos. 04-10932, 04-11256, 2005 WL 1168364 (Bankr. D.R.I. May 6, 2005) (unpublished) (Votolato).
18 In re Porter, 2005 WL 1168364, at *1.
19 Pub. L. No. 109-8, 119 Stat. 23 (2005).
20 11 U.S.C. § 101(10A)(A)(i), discussed in § 36.19 Form 122C-1: Statement of Current Monthly Income and § 92.3 Current Monthly Income: The Baseline.
21 See Line 6 of Official Form 122C-1, discussed in § 36.19 Form 122C-1: Statement of Current Monthly Income.
24 560 U.S. 505, 130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010).
25 No. 13-35593-GMH, 2014 WL 4793243 (Bankr. E.D. Wis. Sept. 24, 2014) (Halfenger).
26 239 B.R. 406 (B.A.P. 9th Cir. Aug. 31, 1999) (Bufford, Ryan, Klein).
27 In re Brown, No. 13-35593-GMH, 2014 WL 4793243, at *2 (Bankr. E.D. Wis. Sept. 24, 2014) (Halfenger).
28 In re Brown, 2014 WL 4793243, at *2.
29 In re Brown, 2014 WL 4793243, at *3.
30 See § 11.1 What Is Regular Income?.
31 See § 91.2 Projected (Disposable) Income, § 126.2 Application of Tests for Confirmation, § 126.3 Does Disposable Income Test Apply?, § 127.6 To Sell or Refinance Property of the Estate and § 127.11 To Extend or Reduce the Time for Payments.
33 In re Kerr, 199 B.R. 370 (Bankr. N.D. Ill. Apr. 22, 1996) (DeGunther) (On trustee’s motion to modify after confirmation, proceeds from the sale of debtor’s homestead are not projected disposable income because equity was exempted and § 522(c) prohibits reaching exempt income through § 1325(b).). Accord In re Ferretti, 203 B.R. 796 (Bankr. S.D. Fla. Sept. 10, 1996) (Cristol) (Settlement proceeds from prepetition automobile accident are not projected disposable income because debtor claimed the proceeds exempt.). Contra Stuart v. Koch (In re Koch), 109 F.3d 1285 (8th Cir. Mar. 28, 1997) (Beam, Lay, Loken) (For § 707(b) purposes, a debtor’s workers’ compensation benefits, though exempt under state law, are projected disposable income notwithstanding § 522(c).); In re Pendleton, 225 B.R. 425 (E.D. Ark. Sept. 29, 1998) (Mixon) (Proceeds from personal injury lawsuit are projected disposable income notwithstanding that debtor claimed proceeds exempt.); In re Turpen, 218 B.R. 908 (Bankr. N.D. Iowa Jan. 21, 1998) (Edmonds) (Income from the liquidation of exempt assets is included in projected disposable income.); In re Lush, 213 B.R. 152 (Bankr. C.D. Ill. Apr. 21, 1997) (Lessen) (Because exempt workers’ compensation proceeds are projected disposable income, debtor must decline to assert exemption in workers’ compensation in order to satisfy § 1325(b) at confirmation.); Gaertner v. Claude (In re Claude), 206 B.R. 374 (Bankr. W.D. Pa. Mar. 25, 1997) (Bentz) (Personal injury settlement proceeds may be exempt property, but § 1325(b) does not qualify income with reference to its exempt status.).
34 See In re Lush, 213 B.R. 152 (Bankr. C.D. Ill. Apr. 21, 1997) (Lessen) (Workers’ compensation proceeds are included in projected disposable income at confirmation, notwithstanding § 522(c); however, to satisfy the confirmation test in § 1325(b), a Chapter 13 debtor must decline to assert the exemption.).
35 See § 49.1 Available in Chapter 13 Cases, § 49.2 Procedure for Lien Avoidance, § 49.3 Limitations on Lien Avoidance, § 49.4 Section 522(f) after BAPCPA: Household Goods Corrupted and § 49.5 Protecting Lienholder after Lien Avoidance.
36 Or, maybe scarier, could a trustee or an allowed unsecured claim holder require the debtor to create income by liquidating a lien avoidable under § 522(f) in order to satisfy the confirmation test in § 1325(b)? See § 91.2 Projected (Disposable) Income.
37 In re Baker, 194 B.R. 881, 885 (Bankr. S.D. Cal. Apr. 19, 1996) (Adler) (At modification after confirmation, proceeds of life insurance on codebtor who died after confirmation are not projected disposable income; however, interest earned on proceeds is. Plan was confirmed in 1994. Codebtor passed away in 1995. Surviving codebtor moved to modify plan to reduce payments and disclosed the life insurance proceeds totaling $53,000. Citing In re Stones, 157 B.R. 669 (Bankr. S.D. Cal. Aug. 23, 1993) (Adler), Hagel v. Drummond (In re Hagel), 184 B.R. 793 (B.A.P. 9th Cir. July 28, 1995) (Meyers, Hagan, Marlar), In re Tomasso, 98 B.R. 513 (Bankr. S.D. Cal. Mar. 29, 1989) (Hargrove), and Solomon v. Cosby (In re Solomon), 67 F.3d 1128 (4th Cir. Oct. 23, 1995) (Widener, Wilkinson, Michael), “[f]rom these cases we distill a simple and workable test: If the exempt asset in question is an anticipated stream of payments, it is included in projected income; if the exempt asset is other than a stream of payments, it is not included. In this case, the Debtor satisfies the ‘projected disposable income’ test by including in her income the Interest generated by the Insurance Proceeds. She will not be required to invade the Proceeds to fund the Plan.”).
38 In cases filed after October 17, 2005, BAPCPA added a requirement that some creditors receive “equal monthly amounts.” See 11 U.S.C. § 1325(a)(5)(B)(iii)(I), discussed in § 74.14 Equal Monthly Installments after BAPCPA.
43 See In re Klevorn, 181 B.R. 8 (Bankr. N.D.N.Y. Mar. 9, 1995) (Gerling) (Court rejects good-faith challenge to plan that surrenders rental property in full satisfaction of the only secured claim and pays the one unsecured claim holder in full with a single payment of $1,085.).
44 See § 111.1 Able to Make Payments and Comply with Plan for discussion of feasibility at confirmation of plans that propose to liquidate estate property.
45 See Vieland v. First Fed. Sav. Bank (In re Vieland), 41 B.R. 134 (Bankr. N.D. Ohio June 6, 1984) (White) (Section 1322(b)(8) does not authorize a plan involving the sale of the debtors’ real estate where the sale will not produce any equity.).
46 In re Smith, 43 B.R. 313 (Bankr. N.D. Ill. Oct. 9, 1984) (Eisen).
47 See In re Nealen, 407 B.R. 194 (Bankr. W.D. Pa. July 9, 2009) (Deller) (Speculative income from litigation or from sale of distressed property and occasional proceeds from sale of cattle are not regular income. “Sporadic income in the nature of undocumented and occasional sales of less than a dozen farm animals does not constitute sufficiently stable and regular income for purposes of Chapter 13. . . . Litigation . . . is speculative in nature and can hardly be described as a source of ‘regular income.’ . . . Even if the property was not subject to Butler County tax sale, and the requisite repairs could be made in some reasonably timely fashion, there is still the uncertainty and speculation of whether the residence would sell. Thus, any income premised upon such a hypothetical sale is mere speculation and does not rise to the level of ‘regular income’ for purposes of Chapter 13 plan funding.”); In re Tucker, 34 B.R. 257 (Bankr. W.D. Okla. Oct. 27, 1983) (Bohanon) (Debtor failed to prove likelihood that sale of estate property would be successful.).
48 See In re Bassett, 413 B.R. 778 (Bankr. D. Mont. Feb. 26, 2009) (Kirscher) (Debtors satisfied regular income requirement for eligibility based on receipt of rentals and minimal income from business operation.); Lyons v. Federal Sav. Bank (In re Lyons), 193 B.R. 637 (Bankr. D. Mass. Mar. 25, 1996) (Feeney) (Rents were property of the Chapter 13 estate under § 541(a)(6). Assignment of rents clause in mortgage was not an absolute assignment under Massachusetts law but rather additional security for the debt. Rents were cash collateral; if the debtor can provide adequate protection, rents can be used to fund a Chapter 13 plan.); In re Gillis, 92 B.R. 461 (Bankr. D. Haw. Oct. 19, 1988) (Chinen) (Rents collected by assignee of debtor’s lease after filing of Chapter 13 case and before rejection are property of the Chapter 13 estate.); In re Robertson, 84 B.R. 109 (Bankr. S.D. Ohio Mar. 4, 1988) (Calhoun) (Debtor has regular income from agreement to allow the debtor’s partnership to use logging equipment owned by the debtor.).
49 See, e.g., In re Lynch, No. 1-08-46308-dem, 2009 WL 1955748 (Bankr. E.D.N.Y. July 6, 2009) (unpublished) (Milton) (Debtor did not establish stability and regularity of $750 monthly rental income for eligibility purposes.); In re Crowder, 179 B.R. 571, 574 (E.D. Ark. Mar. 22, 1995) (Scott) (Argument that income from rental of house would help make plan payments was not convincing where the debtor was incarcerated and “the debtor’s vague testimony that the house was rented is insufficient to demonstrate eligibility or prove feasibility because she did not even know the amount of the rental payments.”); In re Kollar, 357 B.R. 657, 660 (Bankr. M.D. Fla. Oct. 5, 2006) (Briskman) (“Sporadic, undocumented receipt of rent from a rental property” is not regular income for § 101(30) purposes.).
50 See, e.g., In re Baker, 194 B.R. 881 (Bankr. S.D. Cal. Apr. 19, 1996) (Adler) (At modification after confirmation, proceeds of life insurance on codebtor who died after confirmation are not projected disposable income; however, interest earned on proceeds is.). See § 11.1 What Is Regular Income?, § 91.2 Projected (Disposable) Income, § 126.3 Does Disposable Income Test Apply? and § 127.6 To Sell or Refinance Property of the Estate.