Wayne S. Lopes

1
UNITED STATES BANKRUPTCY COURT
FOR THE
DISTRICT OF MASSACHUSETTS
~~~~~~~~~~~~~~~~~~~~~~~~
In re
WAYNE S. LOPES, 	Chapter 13
Debtor 	Case No. 08-12008-JNF
~~~~~~~~~~~~~~~~~~~~~~~~
MEMORANDUM
The matter before the Court is the Objection of the Workers’ Compensation Trust
Fund (the “Fund”) to the Debtor’s Chapter 13 Plan on the grounds that the Debtor is
solvent and has assets with which to pay creditors. The Court heard the Objection and the
Debtor’s Response on June 26, 2008. At the conclusion of the hearing, the Court ordered
the Debtor to filed an amended Official Form 22C.
The Debtor filed a voluntary Chapter 13 petition on March 21, 2008. 	With his
petition, he filed a Chapter 13 Statement of Current Monthly Income and Calculation of
Commitment Period and Disposable Income (Form 22C), and a Chapter 13 plan, as well as
Schedules and a Statement of Financial Affairs.
On Schedule A - Real Property, the Debtor listed his home located at 96 Duffy Drive,
Taunton, Massachusetts (the “Taunton property”) which he owns with his non-debtor
spouse as tenants by the entirety. On Scheduled D - Creditors Holding Secured Claims,
Case 08-12008 Doc 21 Filed 08/21/08 Entered 08/21/08 08:56:50 Desc Main
Document Page 1 of 5

2
the Debtor listed Brookline Savings Bank with a claim secured by an automobile and Wells
Fargo Financial Bank with a mortgage on the Taunton property in the amount of $120,000.
On Schedule F - Creditors Holding Unsecured Nonpriority Claims, the Debtor listed five
creditors including the “Worker Compensation Fund,” with by far the largest claim in the
sum of $166,782.12.
On Schedules I and J - Current Income and Expenditures of Individual Debtor(s),
the Debtor reported that his average monthly income and that of his spouse total $5,273.83,
and that his expenses total $5,069.25, including a monthly mortgage expense of $1,546.94
and a monthly expense for cigarettes of $410.
The Debtor’s Form 22C revealed that he is an above-median income debtor with an
applicable commitment period of five years and that his disposable income is determined
under 11 U.S.C. § 1325(b)(3). In Part I of Form 22C, the Debtor reported his average income
from all sources derived during the six calendar months preceding the filing from gross
wages, salary, tips, bonuses, overtime and commissions as $5,377.71. He reported his non-
debtor spouse’s monthly income from “SSI” in the amount of $2,128.05. According to the
Debtor, the couple’s annualized income equaled $90,069.12. 	After the deduction of
expenses under the National and Local Standards in the sum of $4,429.97, an additional
expenses deduction of $33.05 for “[a]dditional food and clothing expense,” a secured debt
payment for an automobile in the sum of $266.44, and a Chapter 13 administrative fee of
$277.03, the Debtor reported monthly disposable income of $2,498.67. The Debtor did not
take a deduction for payment of the mortgage on the Taunton property.
Case 08-12008 Doc 21 Filed 08/21/08 Entered 08/21/08 08:56:50 Desc Main
Document Page 2 of 5

3
The Debtor filed a 60-month plan pursuant to which he proposed a monthly plan
payment of $198, resulting in a 6% dividend to unsecured creditors. The Debtor proposed
to make post-petition payments directly to his two secured creditors whose payments were
current as of the petition date.
As noted above, the Fund objected to confirmation of the Debtor’s plan on grounds
that the Debtor could pay more to unsecured creditors. It stated:
The debtor, who demonstrates a net profit in monthly income proposes to
repay to the Workers’ Compensation Trust Fund a mere 6% of the total claim
over 60 months which the Workers’ Compensation Trust Fund suggest [sic]
is totally inadequate given the debtor’s financial position. 	Further, the
debtor seeks to extend the time pursuant to § 1322(d) which is un-necessary
[sic] and serves only to further delay the collection of a valid obligation
which was incurred in October 1991.
At the hearing, the Fund asserted that the Debtor could contribute $410 more per month
to creditor repayment if he quit smoking.
On July 3, 2008, following the hearing on the Fund’s Objection, the Debtor filed an
Amended Form 22C, showing monthly disposable income of $374.62. On his Amended
Form22C, he reported average monthly income of $4,746.64 for the six months preceding
the filing, a sum $641.07 less than he reported in his original Form 22 C. 	Instead of
reporting his wife’s income as income from SSI, he reported it as pension and retirement
income in the amount of $2,128.05. On Amended Form 22C, the Debtor claimed $916.95
as a marital adjustment, broken down as follows: $410 for cigarettes, $117.27 for “Fed Tax,”
$50 for a gravestone, $45 for hair care, $288.16 for insurance and $6.52 for life insurance.
The Debtor reported annualized income of $71,372.88 for purposes of 11 U.S.C. § 1325(b)(3)
Case 08-12008 Doc 21 Filed 08/21/08 Entered 08/21/08 08:56:50 Desc Main
Document Page 3 of 5

4
and total deductions of $5,573.12, including $1,926.32 for total debt payments. Additionally,
he claimed in Part VI of Amended Form 22C, captioned “Additional Expense Claim,”
$497.11 for commuting expenses under 11 U.S.C. § 707(b)(2)(A)(ii)(I). 	See 11 U.S.C. §
1325(b)(3).
The Fund did not filed a further objection to confirmation of the Debtor’s plan based
upon Amended Form 22C in which the Debtor listed cigarette expenses as part of a claimed
marital adjustment.
In In re Louviere, 389 B.R. 502 (Bankr. E.D. Tex. 2008), the court stated:
[A] challenge to the allocation of household expenses between a debtor and
a non-filing spouse remains viable by: (1) bringing a disposable income
objection to test the validity of the marital adjustment taken in the calculation
of “current monthly income;” or (2) challenging the good faith of the debtor
in otherwise proposing a plan in which she is absorbing more than her fair
share of the household expenses.
Id. at 510. 	If challenged, the Chapter 13 debtor must demonstrate that the bankruptcy
estate has not assumed responsibility for a disproportionate share of the reasonable
household expenses. Id.
In In re Hoskins, No. 07-13785-RMG, 2008 WL 2235350 at *3 (Bankr. E.D. Va. May
29, 2008), the court observed:
In Form 22C, the debtor reports both her and her spouse’s income, regardless
of whether the case is jointly filed. Then, to figure current monthly income,
the debtor is allowed to take a marital adjustment (Part III, line 19) for a
non-debtor spouse’s income that is not paid on a regular basis to the
household expenses of the debtor or her dependents.
Id. The court added:
In a § 1325(b)(1)(B) objection, the objecting party “has, at a minimum, the
Case 08-12008 Doc 21 Filed 08/21/08 Entered 08/21/08 08:56:50 Desc Main
Document Page 4 of 5

5
initial burden of producing satisfactory evidence to support the contention
that the debtor is not applying all disposable income to plan payments.”
Id. (citations omitted).
As an above-median income debtor, the Debtor was required to utilize Official Form
22C for his expenses to determine his disposable income. See 11 U.S.C. § 1325(b)(2) and (3)
(“Amounts reasonably necessary to be expended under paragraph (2) . . . 	shall be
determined in accordance with subparagraphs (A) and (B) of section 707(b)(2),” if the
debtor is an above median income debtor.). See In re Phillips, 382 B.R. 153 (Bankr. D. Mass.
2008).
In view of the foregoing, the Court overrules the Fund’s Objection to Confirmation
based upon the monthly cigarette expense listed on Debtor’s Schedule J. The Fund failed
to satisfy its burden under the test articulated by the court in Hoskins. 	Although the
disparity in income reported by the Debtor on his original Form 22C and his Amended
Form 22C raises questions as to the Debtor’s ability to make a larger plan payment, and the
Debtor was not asked to support his commuting expenses of $500 with competent
evidence, in the absence of a cogent objection under 11 U.S.C. § 1325(b), the Court accepts
the Debtor’s Amended Form22C.
By the Court,
Joan N. Feeney
United States Bankruptcy Judge
Dated: 	August 21, 2008
Case 08-12008 Doc 21 Filed 08/21/08 Entered 08/21/08 08:56:50 Desc Main
Document Page 5 of 5