Chapter 13 Plan Confirmation

In re Louviere, was a case out of the Eastern District of Texas where the Chapter 13 Trustee objected to confirmation on the basis that the debtor was not paying disposable income per the current monthly income calculation of the Means Test and because of the debtor’s failure to provide evidence of the nonfiling spouse’s contribution to household expenses. 

The court held that the debtors projected disposable income for a Chapter 13 payment plan cannot be rooted in an income stream the debtor is no longer receiving due to retirement.  The retirement constitutes as substantial change in circumstances. Furthermore, the financial information of a nonfiling spouse insured the court’s ability to determine if the filing spouse has a disproportionate amount of the household expenses.  However, in this case the court was able to make a determination based on a prior itemized schedule of income and expenses. 

Often times the Chapter 13 Trustee’s Office makes an assertion or files an objection that the debtor’s full disposable income is not being contributed to pay the unsecured credit card debt through the Chapter 13 Plan.  When the trustee does not agree with the debtor’s counsel as to how much is being contributed then a hearing can be held in bankruptcy court in front of a bankruptcy judge.  That is why it is important to have experience trial lawyers to represent the debtor rather than just a document preparer.