Let’s assume that you are an above median debtor. You are a single person who makes $60,000 annually which is above the state median of $48,000 for a single debtor (unmarried & no dependents). Your disposable income is $1,000 monthly. In your Chapter 13 plan you propose to pay your credit card debt of $20,000 over the maximum period of time allowed by bankruptcy law, 60 months, in equal monthly payments of $333.33 even though your disposable income is $1,000. The trustee objects to your plan arguing that since you are an above median debtor, you must off your $20,000 of credit card debt in 20 months, instead of 60, at the rate of $1,000 monthly, the amount of your disposable income. Can you stand your ground and insist on the court approving your $333.33 plan payment over the objection of the trustee?

In Re Richall, debtors Schedules I and J, income and expense, showed that the above median income Chapter 13 debtor had actual monthly net income of $886. According to their means test form B22C, the debtors had monthly disposable income of $1,756. Why the difference; because the means test does not allow certain deductions to arrive at disposable income. For example, you send your child to a private high school where tuition is $1,000 a month. The means test only allows you to deduct $146, not $1,000. But in reality, you are paying $1,000. The means test argument is that debtor should not be allowed to choose to pay tuition for private high school at the expense of his creditors. In other words, debtor should be paying his creditors instead of sending his child to a private high school.

Part 1