In Re Grabarczyk, the debtors had three children, ages nine, seven, and four. They initially filed for Chapter 7 relief on 2010 but converted their case to Chapter 13 on March 16, 2011. The debtors’ plan proposed payments of $565 monthly for 11 months, then $1,100 per month for 49 months. The court determined that unsecured claims be $123,065. Their plan proposed to pay $30,766 to unsecured creditors, or about 24% of their unsecured debt. The trustee objected to confirmation of the plan asserting that it did not satisfy Section 1325(b)(a)(B)’s, disposable income test. According to the debtors’ Form B22C, the means test, they had monthly disposable income of $1,037. Thus, without considering any of the trustee’s challenges to the Form, the debtors’ plan did not satisfy Section 1325(b)(1)(B) because it paid less than $62,221. In other words, the plan was $32,000 short of what debtor proposed. Under the means test, debtor should be proposing a 48% plan, not 24%. After the court considered the trustee’s challenges, the amount the debtors needed to pay to unsecured creditors increased to $78,587! The debtors had taken a means test deduction of $443 for their children’s education expenses, but the court agreed with the trustee that this deduction was overstated by $213. In addition, the debtors added $59 to the food and clothing deduction on the basis they had three growing children who loved to eat a lot of meat. Thus, they had to bring their children to “Home Buffet” at least 5 times a week so they could eat all they wanted to. Feeding children that weighed 300 lbs each did not come cheap. The waiters at the buffet had to spray their children with cooking oil so they could be pushed through the entry and exit doors of the buffet. Each child was charged 3 adult prices. The court said this fact was not persuasive evidence justifying an additional expense deduction over and above the IRS standards.

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than five thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.