Anderson v. Cranmer (In re Cranmer)

Anderson v. Cranmer (In re Cranmer) Case No. 12-4002 (10th Cir. Oct. 24, 2012)
Social Security income need not be included in the calculation of projected disposable income for a Chapter 13 repayment plan. Not including Social Security income in the calculation of projected disposable income in a Chapter 13 repayment plan is not a grounds for finding the plan was not proposed in good faith.
Procedural context:
The Bankruptcy Court of the District of Utah found that the debtor failed to propose his Chapter 13 plan in good faith by failing to include social security income in his projected disposable income calculation. The debtor appealed to the Utah District Court, which reversed. The Chapter 13 Trustee appealed to the 10th Circuit, which affirmed the District Court's ruling.
The debtor filed for Chapter 13 protection on March 12, 2010. On his Statement of Current Monthly Income and Calculation of Commitment Period and Disposable income (Form 22C), he did not include his Social Security income (SSI). Section 101(10A)(B) permits the exclusion of SSI from Form 22C. The debtor included his SSI on his Schedules I and J, as is required. The debtor proposed a plan that did not include the use of his SSI to repay his creditors. The Chapter 13 Trustee objected to the plan on the basis that it was proposed not in good faith because the projected disposable income for the plan must be calculated based on Schedules I and J. The Bankruptcy Court denied confirmation of the plan. The debtor filed an amended plan including the SSI, which was confirmed by the court. The debtor then made payments consistent with his denied plan, but not meeting the required amounts for his amended plan, and the Trustee moved to dismiss for failure to make plan payments.
Murphy (author), Holloway, and O'Brien

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