Devin Anthony Dwyer and Cindy Lynn Dwyer

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
DEVON and CINDY DWYER, No. 07-10725
Debtor(s).
______________________________________/
Memorandum re Means Test
_________________
Whether the debtors in this Chapter 7 case fail the means test depends on the proper figure to be
used in line 42 of Official Form 22A. The debtors have a type of mortgage which allows them to choose their
monthly payment. They can pay a minimum payment, which results in negative amortization; an interest-only
payment; a 30-year amortization payment; or a 15-year amortization payment. There are limits on the number
of times the first two payments can be selected. The debtors argue that they are entitled to use the 30-year
payment amount even though they have been making minimum payments. The U.S. Trustee, seeking
dismissal under § 707(b)(1) of the Bankruptcy Code, argues that the interest-only payment is appropriate.
The debtors are not arguing special circumstances, so the case must be dismissed if the U.S. Trustee is right.
This issue is governed by § 707(b)(2)(A)(iii)(I) of the Code, which provides that the amount in line
42 is the total amount of all payments contractually due in each of the 60 months following the date of the
petition divided by 60. The controlling term is “contractually due.” Under the debtors’ mortgage, the only
amount due is the minimum amount they are obligated to pay. Thus, this is the amount the court must use in
Entered on Docket
November 14, 2007
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 07-10725 Doc# 24 Filed: 11/14/07 Entered: 11/14/07 12:32:23 Page 1 of 2

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determining if the debtors pass the means test. If failure to make a payment does not result in default, it is not
due.
Since the debtors’ right to pay only the minimum each month is limited, calculation of the proper
amount is not simple though it is not terrible difficult. Just take the minimum allowable payment for each of the
next sixty months, add them together and divide by sixty. That is the proper amount for the mortgage
payment to be used in line 42.
If the parties agree that using the above method of calculation the debtors do not pass the means test,
then the U.S. Trustee shall submit a form of order granting her motion which debtors’ counsel has approved
as to form. If there is any remaining dispute, the matter shall be set for further hearing.
Dated: November 14, 2007
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 07-10725 Doc# 24 Filed: 11/14/07 Entered: 11/14/07 12:32:23 Page 2 of 2