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The U.S. Supreme Court is set to decide how some bankruptcy payment plans are calculated.
The case involves a 10th Circuit ruling, which said that a Chapter 13 debtor's pre-petition income from the preceding six months does not necessarily determine how much she had available to repay unsecured creditors.
Under 11 U.S.C. [section]1325(b)(1)(B), a Chapter 13 plan generally may not be confirmed over the objection of a trustee or unsecured creditor unless it provides that the debtor's "projected disposable income" be used to repay unsecured creditors.
In this case, Stephanie Lanning filed a Chapter 13 bankruptcy and a plan to pay the trustee $144 a month for three years. That calculation was based on her disposable income at the time of the filing.
The trustee, Jan Hamilton, objected to the debtor's proposal to pay a total of $5,184 as satisfaction of her $36,793 in unsecured debt.
Hamilton argued that...