In re Lundy (12-51638)

The Chapter 13 trustee objected to confirmation of the below-median-income debtors’ plan on the grounds that the plan did not comply with the “projected disposable income” requirement of 11 U.S.C. § 1325(b)(2)(B).  The trustee agreed that social security benefits should be included in the calculation of a below-median debtor’s projected disposable income.  The court, consistent with the majority of reported decisions, held that social security benefits are specifically excluded from “current monthly income” and are not included in the calculation of projected disposable income.  The court also rejected the trustee’s argument that the plan was not filed in good faith, 11 U.S.C. § 1325(c)(3), and held that the debtors’ had shown “cause” to extend the terms of their plan from 3 to 5 years.

Friday, January 11, 2013