Richard J. Borges

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
RICHARD BORGES, 	No. 09-12202
Debtor(s).
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Memorandum Re Plan Confirmation
_________________
Chapter 13 debtor Richard Borges has proposed a plan whereby he will pay $460.00 per month
for 60 months, resulting in a dividend to creditors of about 15%. His former spouse, Cynthia Petrusha,
objects. She holds a claim for $114,323.50, awarded her as an equalizing payment by the state family
law court before the bankruptcy.
Petrusha has articulated two grounds for objection: that the plan is proposed in bad faith
because the case was filed soon after the state court judgment, and that Borges could afford to pay
more if he moved to another property. The court finds neither argument persuasive.
Congress has completely overhauled dischargeability provisions in the Bankruptcy Code twice
in recent years. The current law is that debts such as that of Petrusha are dischargeable in Chapter 13.
The court sees no basis for Petrusha to argue bad faith just because Borges is taking advantage of laws
clearly provided by Congress. Nor does the court find the timing of the bankruptcy, after the rendering
of a judgment Borges clearly cannot afford to pay, constitutes bad faith.
Borges owns a home in town, and has a long-term, low rent lease on a rural cabin more than an
Entered on Docket
January 08, 2010
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 09-12202 Doc# 29 Filed: 01/08/10 Entered: 01/08/10 14:50:25 Page 1 of 2

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hour from his current home and work. Petrusha argues that if Borges moved to the cabin, sold his
home, and commuted to work he could pay more to his creditors. There a numerous factual problems
with this argument, in that the cabin has no electricity or a reliable water supply and is unsuited for
year-round use. Morevoer, Borges’ budget for house payments of $1,600.00 per moth is entirely
reasonable. However, facts aside, Petrusha’s argument entirely inconsistent with current law.
Under pre-2005 law, the court could consider postpetition events in considering plan
confirmation. However, the 2005 amendments made postpetition events irrelevant; confirmation is
now a mechanical test based on the prepetition means test figure and the applicable commitment
period without regard to postpetition events. In re Kagenvamea, 541 F.3d 868, 871-72 (9th Cir. 2008).
Thus, even if Borges had after filing his Chapter 13 actually sold his house and moved to the cabin, as
Petrusha urges, he could not be compelled to increase his plan payments.
The court finds that Borges’ plan is a lawful, good faith effort to deal with his debts.
Accordingly, Petrusha’s objection will be overruled and the plan confirmed. Counsel for Borges shall
submit an appropriate form of order.
Dated: January 8, 2010
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 09-12202 Doc# 29 Filed: 01/08/10 Entered: 01/08/10 14:50:25 Page 2 of 2