Zero Payment Chapter 13 Bankruptcy Plan Confirmed
Sometimes, the foibles of the Bankruptcy Code even out. In this case, the client is a single mom who receives significant child support. The support received plus her salary put her over the Maryland median income for her family of three so she had to fill out the long form. The US Trustee objected to her Chapter 7 case because the long form showed she had surplus income. The attorney argued that because her income was largely comprised of child support her Chapter 13 case would pay nothing to creditors, so it would be a fruitless exercise. This argument, however, fell on deaf ears and the case was converted to Chapter 13.
Once in Chapter 13 the child support she received dropped out of her disposable income so she technically had negative income after payment of expenses. The Chapter 13 trustee protested against her plan to pay $55.55 per month for five years, just enough to pay fees and expenses, but nothing for creditors. The bankruptcy judge, however, found that the plain language of the Bankruptcy Code is clear: child support received to the extent reasonably necessary for the care of the children could not count as disposable income, and her plan was confirmed.
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DISCLAIMER: Please note that every case is different and these verdicts and settlements, while accurate, do not represent what we may obtain for you in your case.
