Practice Area:Bankruptcy / Debt
Outcome:Chapter 13 Plan Confirmed
Description:Debtor proposed a chapter 13 plan providing 0% to unsecured creditors and included a lien strip of a second mortgage. Debtor's budget was significantly in the red each month and Trustee objected based on feasibility. Debtor argued that her current monthly income minus amounts reasonably necessary to be expended per 1325(b)(2) creates negative disposible monthly income. Per Kagenveama, negative disposible monthly income requires no minimum commitment period nor payments to unsecured creditors. Debtor indicated she would be funding her chapter 13 plan from "non disposible monthly income sources" to explain her negative budget and the judge agreed with the argument and confirmed her case. This case is remarkable because it was confirmed despite showing a negative budget on the bankruptcy schedules.