Jacqueline Marie Barrantes

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UNITED STATES BANKRUPTCY COURT

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For The Northern District Of California

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GPO

Entered on Docket
June 29, 2006

GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA

In re Case No. 05-55655-ASW

]
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JACQUELINE M. BARRANTES, ] Chapter 13
]
Debtor j
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MEMORANDUM DECISION ON CREDITOR’S
OBJECTION TO CONFIRMATION

Before the Court is the objection of Angelikka Carter
(“Creditor”) to confirmation of the chapter 13 plan of Jacqueline
Barrantes (“Debtor”). Creditor’s objection to confirmation is
based on her assertion that Debtor has not pledged all of her
disposable income in support of the plan.

Debtor is represented by James J. Gold, Esq., of Gold and
Hammes. Creditor appears in propria persona.

This Memorandum Decision constitutes the Court’s findings of
fact and conclusions of law, pursuant to Rule 7052 of the Federal
Rules of Bankruptcy Procedure.

I.

STATEMENT OF FACTS

Debtor filed a voluntary petition under chapter 13 of the

Bankruptcy Code on September 9, 2005 (“Petition”). Concurrently

MEMORANDUM DECISION ON CREDITOR’S

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OBJECTION TO CONFIRMATION
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with the filing of the petition, Debtor submitted a proposed
chapter 13 plan. Debtor subsequently filed an amended plan
(“Plan”) on March 24, 2006.1 The proposed Plan provides for
payment of zero cents on the dollar to general unsecured
creditors.’ Creditor filed an “Objection to Confirmation of
Debtor’s Plan” (“Objection”) on October 21, 2005. Creditor
objected to the proposed Plan on the grounds that the Plan does not
account for all of Debtor’s projected disposable income as required
by 11 U.S.C. § 1325(b) (1) (B). The evidentiary hearing on this
matter was conducted and completed on May 15, 2006. The only
witnesses to testify at the evidentiary hearing were Debtor and
Creditor.

In her objection, Creditor contended that: (1) Debtor
overstated her child care expenses; (2) Debtor overstated her
monthly mortgage payment; (3) Debtor understated her income; and
(4) Debtor overstated her transportation expenses or,
alternatively, those expenses are not reasonably necessary.

A. Child Care Expenses

Creditor asserted that Debtor overstated her monthly child care
expenses in calculating her chapter 13 Plan payments. At trial,
Debtor introduced into evidence Debtor’s “Schedule J ~ Current
Expenditures of Individual Debtors” (“Schedule J”) which was filed

in Debtor’s bankruptcy case along with the Petition.’ Schedule J

1 The Plan was admitted into evidence as Exhibit A.

2 Though Debtor has twice amended her chapter 13 plan since

the original filing, the proposed payment on general unsecured
claims has remained unchanged.

3
Exhibit D.

A copy of Schedule J was admitted into evidence as

MEMORANDUM DECISION ON CREDITOR’S
OBJECTION TO CONFIRMATION

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lists Debtor’s monthly household expenditures. The list includes
childcare expenses of $1,075.00 per month.

According to Debtor’s testimony, she is a single parent with
two children, both of whom have special needs. Debtor testified
that, although her child care costs vary from week to week, in a
typical week she spends over $200.00 for the care of her son, and
$50.00 to $60.00 for the care of her daughter. When these typical
numbers are extrapolated to a monthly basis, Debtor’s child care
costs exceed slightly the $1,075.00 expense stated in Schedule J.’

Creditor did not offer any evidence to contradict Debtor’s
testimony regarding her child care expenses. The Court accepts
Debtor’s statement of monthly child care expenses in Schedule J of
$1,075.00 as correct.

B. Mortgage Payments

The objection points out a discrepancy regarding the Debtor’s
monthly mortgage payment as stated in Schedule J and in the Plan.
Schedule J states the mortgage payment as $1,952.00. The Plan,
however, shows a monthly mortgage payment of $1,652.00.

Debtor filed a “Declaration of Debtor” (“Debtor’s Declaration”)
on March 17, 2006. Debtor’s Declaration states that her monthly
mortgage payment is $1,651.64, plus a late charge of $64.48 which,
according to Debtor, must be paid routinely because the timing of
her payday does not allow her to make the mortgage payment on

time.° Debtor’s Declaration also states that Debtor must pay

4 Weekly expenses of $250.00 (the low end of the range
provided by debtor) multiplied by an average of 4.33 weeks per
month yields expenses of $1,082.50 per month.

5

Exhibit B.

Debtor’s Declaration was admitted into evidence as

MEMORANDUM DECISION ON CREDITOR’S
OBJECTION TO CONFIRMATION

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1 ]}monthly homeowner’s association dues of $280.00.° The sum of these

2\|expenses is $1,996.12. Accordingly, Debtor asserted that the

3] amount shown on Schedule J is actually understated.

4 Creditor did not present any additional evidence or argue this
5]}point at the hearing. Based on the available evidence, the Court
6 || accepts Debtor’s statement of her monthly mortgage payments as

7 | provided on Schedule J and finds that the amount was not

8 |} overstated.

9||}C. Income

10 Creditor contended that Debtor understated her income for

11 || purposes of calculating monthly Plan payments. Debtor’s Declaration

12 || states that the Debtor is a employed as a special education teacher

13 | by the San Jose Unified School District. Debtor introduced into
14 | evidence Debtor’s “Schedule I - Current Income of Individual

15} Debtors” (“Schedule I”) which was filed concurrently with the

16} Petition. Schedule I states that Debtor’s gross monthly income is

17} $5,400.00, which, after subtracting payroll deductions, yields net

18 | income of $4,500.00.’ According to Schedule J, Debtor’s total
19 | monthly expenses are $3,900.00. Simply subtracting Debtor’s net
20 || income from her monthly expenses yields $600.00 of disposable

21} income. Debtor’s proposed monthly Plan payments vary, but the

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94 6 The Plan also shows monthly homeowner’s association dues
payments of $280.00.

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7

26 || $5,400.00, less “Payroll Deductions” totaling $900.00 (comprised
$825.00 in payroll taxes and social security and $75.00 in union
27 || dues) equals “Net Monthly Employment Income” of $4,500. Exhibit
does not list any other sources of income for Debtor. Thus, the
28 1 $4,500 figure is also referred to as “Total Monthly Income” and
“Grand Total Monthly Income”.

MEMORANDUM DECISION ON CREDITOR'S
OBJECTION TO CONFIRMATION

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Schedule I states Debtor’s “Gross Employment Income” as

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average is approximately $591.07.® Debtor has also established, as
set forth above, that both her monthly child care expenses and
monthly mortgage payments are somewhat understated. Accordingly,
the Court is satisfied that all of Debtor’s disposable income is
being pledged toward the Plan.

Creditor also took issue with Debtor’s statement of her gross
monthly income. Creditor argued that Debtor’s gross monthly income
is $5,863.00 rather than $5,400.00. In support of this contention,
Creditor referred to a document entitled “Employer’s Return (Wage
Garnishment)” (“Wage Garnishment").° The Wage Garnishment is dated
August 11, 2005. According to the “Declaration of the Creditor”
(“Creditor’s Declaration”) filed April 6, 2006'°, Creditor obtained
a small claims court judgment against Debtor relating to unpaid
childcare services. The Wage Garnishment was served on Debtor’s
employer in an effort to garnish Debtor’s wages to fulfill the
judgment. The Wage Garnishment was completed by the payroll office
of Debtor’s employer, San Jose Unified School District, and
returned to the Sheriff’s Department, which subsequently mailed it
to Creditor. It states that, in the last pay period prior to
completion of the Wage Garnishment, Debtor had monthly gross

earnings of $5,863.00. Creditor cited the Wage Garnishment as

8 The Plan calls for payment of $400.00 per month for 6

months, $500.00 per month for 12 months, and $650.00 per month
thereafter, until the Plan ends. The total term of the Plan is 56
months. The average is calculated as follows: (($400.00 * 6) +
($500.00 * 12) + ($650.00 * 38)/56 = $591.07).

9
Exhibit 2.

The Wage Garnishment was admitted into evidence as

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Exhibit 1.

Creditor’s Declaration was admitted into evidence as

MEMORANDUM DECISION ON CREDITOR’S
OBJECTION TO CONFIRMATION

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evidence that Debtor understated her income.

Debtor explained that the discrepancy between the $5,400.00
figure for gross monthly income stated on Schedule I and the
$5,863.00 figure on the Wage Garnishment was due to the fact that
the higher figure reflected income she received from teaching
summer school in 2005. Debtor’s Declaration explains that she will
not be teaching summer school in 2006, 2007 or 2008."' As a result,
she will not receive any additional wages related to teaching
summer school in the next three years. Thus, according to Debtor,
her gross monthly income is correctly stated on Schedule I as
$5,400.00.

The Court accepts Debtor’s explanation for the discrepancy
regarding her income. The only evidence that Creditor offered
suggesting that Debtor understated her income was the Wage
Garnishment. Debtor persuaded the Court the $5,863.00 figure,
which appears on the Wage Garnishment is not indicative of Debtor’s
current gross monthly income. Therefore, the Court finds that
Debtor’s proposed Plan payments were correctly calculated using the
$5,400.00 figure.

D. Vehicle

During the evidentiary hearing, Creditor argued that Debtor’s

vehicle is unreasonably expensive to operate and maintain and that

Debtor is overstating her transportation expenses. Debtor owns a

" Debtor’s Declaration explains the reasons why Debtor will

not be teaching summer school until, at the earliest, 2009. Due to
funding shortfalls, San Jose Unified School District will not be
offering elementary summer school in either 2006 or 2007. In

addition, the district implemented new rules governing the
selection of teachers for summer school assignments that precludes
Debtor from receiving an assignment for 2008, should the district
choose to offer elementary summer school in that year.

MEMORANDUM DECISION ON CREDITOR’S
OBJECTION TO CONFIRMATION

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2000 Chevrolet Suburban

(“Suburban”).

Schedule J states Debtor’s

monthly transportation expenses (except car payments) as $100.00

and automobile insurance expenses
for car payments.
funds received from her father to
to filing the Petition. Creditor
suggesting that Debtor’s expenses
unreasonable or that the expenses

per month seems to understate the

such a vehicle on fuel alone.

as $145.00. No amount is listed

In her testimony, Debtor explained that she used

purchase the Suburban just prior
did not offer any evidence
related to the Suburban are
overstated. $100.00

are In fact,

amount that Debtor must spend for

Such a vehicle is well-suited to the

transportation needs of Debtor and her two children with special

needs.

The Court is satisfied that Debtor’s expenditures related

to her vehicle are both reasonable and properly stated.

Il.

APPLICABLE LAW?

The relevant provision of the Bankruptcy Code states as

follows:
claim objects to the confirmation
not approve the plan unless,

the plan provides that all of the

“Tf the trustee or the holder of an allowed unsecured

of the plan, then the court may

as of the effective date of the plan

debtor’s projected disposable

income to be received in the three year period beginning on the

date that the first payment is due under the plan will be applied

to make payments under the plan.”

11 U.S.C. § 1325(b) (1) (B). The

term “disposable income” is defined as “income which is received by

the Debtor and which is not reasonably necessary to be expended for

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October 17,
Code made by the Bankruptcy Abuse
Protection Act of 2005
amendments do not apply.

MEMORANDUM DECISION ON CREDITOR’S
OBJECTION TO CONFIRMATION

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This case was filed on September 9,
2005 effective date of the amendments to the Bankruptcy

(“BAPCPA”) .

2005, prior to the

Prevention and Consumer
Accordingly, the BAPCPA

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the maintenance or support of the debtor or a dependent of the

debtor.” 11 U.S.C. § 1325 (b) (2) (A).

IIl.
ANALYSIS
The points raised by Creditor -- that Debtor understated her
income and overstated her expenses -- are relevant to whether the

proposed Plan provides that all of Debtor’s projected disposable
income will be applied to make payments under the Plan. If
Debtor’s expenses were, in fact, overstated, her disposable income
would also be higher than indicated, and a greater amount would
have to be applied to the Plan. Creditor’s objection with respect
to the Suburban raises an issue as to whether Debtor’s
transportation-related expenses are reasonably necessary for the
maintenance or support of the Debtor or her family. As discussed
above, the Court finds that Debtor accurately stated her income and
expenses on Schedules I and J, and these figures were used to
calculate Debtor’s proposed monthly Plan payment. Based on the
evidence presented, the Court holds that the proposed Plan properly
applies all of Debtor’s projected disposable income pursuant to the
requirements of § 1325(b) (1) (B).

To the extent that Creditor has raised an objection with regard
to the reasonable necessity of Debtor’s transportation expenses,
the Court finds that the expenses stated in Schedule J are

completely reasonable for the maintenance and support of the Debtor

and her dependents. Debtor is a single parent with two dependent
children with significant special needs. The expenses claimed by
Debtor are in no way extravagant or luxurious. These expenses are

reasonably necessary under § 1325(b) (2) (A).

MEMORANDUM DECISION ON CREDITOR'S
OBJECTION TO CONFIRMATION

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IV.

—"

CONCLUSION

Debtor’s Plan complies with the requirements of § 1325.
Creditor’s objection to confirmation of the Plan is overruled.
Counsel for the Debtor shall serve upon Creditor and file with the

Court a proposed form of order.

Dated Zr pot 7 “
ave Gort SW) ivrdaeh

ARTHUR S. WEISSBRODT
UNITED STATES BANKRUPTCY JUDGE

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Court Service List

Norma L. Hammes, Esq.

Law Offices of Gold and Hammes
1570 The Alameda #223

San Jose, CA 95126

Jacqueline Marie Barrantes
1000 Weepinggate Ln
San Jose, CA 95136

Angelikka Carter
337 Avenida Nogales
San Jose, CA 95123

Devin Derham-Burk
P.O. Box 50013
San Jose, CA 95150-0013

Office of the U.S. Trustee
U.S. Federal Bldg.

280 S Ist St. #268

San Jose, CA 95113-3004

MEMORANDUM DECISION ON CREDITOR’S
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