Chapter 13 Debtor Entitled to Claim Marital Adjustment for Spouse’s Mortgage Payments on Form 122C-1

Chapter 13 Debtor Entitled to Claim Marital Adjustment for Spouse’s Mortgage Payments on Form 122C-1

The chapter 13 trustee (the “Trustee”) has objected to confirmation of the chapter 13 plan (the “Plan”) filed by Debtor Marian Leah Baker (the “Debtor”). The Trustee’s objection (the “Objection”) claims that the Plan fails to provide that “all of the Debtor’s projected disposable income . . . will be applied to make payments to unsecured creditors under the plan,” as required by § 1325(b)(1)(B) of the Bankruptcy Code, 11 U.S.C. § 1325(b)(1)(B).

The issue before the Court is what portion of the income of the Debtor’s non-filing spouse (the “Spouse”) should be included in Debtor’s projected disposable income and used to make payments to unsecured creditors. Specifically, the Court must determine the extent to which the Debtor is entitled to claim a “marital adjustment” on line 13 of Official Form 122C-1 (“Form 122C-1”).

The Trustee asserts that the Debtor has improperly reduced her projected disposable income by using the marital adjustment to exclude amounts paid by the Spouse on (1) a mortgage for which he solely is liable, and (2) other debts owed only by the Spouse. Although the mortgage debt is an obligation of the Spouse only, the Debtor and her dependent reside with the Spouse in the property securing the mortgage indebtedness. In response to the Objection, the Debtor has agreed to forego a portion of the disputed marital adjustment but disagrees with the Trustee’s assertion that she may not exclude the amounts representing her Spouse’s mortgage payments.

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