Chapter 13– Confirmation of plan– Calculation of projected disposable income


Addressing one of the significant issues still open regarding the calculation of a Chapter 13 debtor’s projected disposable income, the court said that, while Code §1325(b)(3) requires that the determination of the expenses for an above-median debtor be made in accordance with Code §§707(b)(2)(A), (B), this does not obviate the Bankruptcy Code’s threshold requirements, in §1325(b)(2), that the amount of an expense be reasonable necessary. Here, the debtor’s monthly mortgage expense of $5,857 was not reasonably necessary where the applicable IRS Local Standard for monthly housing expenses for a one-person household in Burlington County, New Jersey, was $1,125. The debtor’s five-bedroom residence had a total of 6,100 square feet, as well as numerous luxury features such as a 300—plus-bottle wine cellar, a second kitchen, a pool table room, and a heated pool. Moreover, the debtor’s Form 22C deducted expenses for electricity, heating fuel, sewer/water, and home maintenance totaling $880, which was nearly double the local standard for non-mortgage housing utilities of $491. In re Konowicz, 2012 WL 1813410.

This entry was posted in General and tagged , . Bookmark the permalink.

Leave a Reply