Fink v. Thompson (In re Thompson)

Summarized by Brian Hockett , Thompson Coburn LLP
15 years 6 months ago

Citation:

_____ B.R. _____, No. 10-6018 (8th Cir. BAP Sept. 16, 2010)

Tag(s):

8th Circuit

Ruling:

Chapter 13 plan that did not provide for full payment of Social Security income to general unsecured creditors, standing alone, will not prevent debtors from establishing good faith under 11 U.S.C. § 1325(a)(3), as required for confirmation of the Chapter 13 plan.

Procedural context:

The Eighth Circuit Bankruptcy Appellate Panel affirmed a bankruptcy court order overruling the Chapter 13 trustee's objection and confirming Chapter 13 plan.

Facts:

The Chapter 13 debtors' Social Security income was only partially included in a proposed $1,155 monthly Chapter 13 plan payment that would result in an estimated 11% distribution to unsecured creditors. The debtors' Form 22C (which excludes Social Security income) indicated a monthly disposable income of negative $1,245.83. The debtors' Schedules I and J indicated net monthly income of $2,560.62 (including Social Security income). The Chapter 13 trustee objected to plan confirmation on the basis that the plan was not proposed in good faith for the sole reason that the debtors did not propose to dedicate all of their Social Security income to their creditors. The Chapter 13 plan was confirmed over the trustee's objection.

Judge(s):

Schermer, Kressel, Mahoney

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