Frank Wesley Register and Tracy Kathlene Register

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF WYOMING
In re 	)
)
FRANK WESLEY REGISTER and 	) 	Case No. 	10-20054
TRACY KATHLENE REGISTER, 	) 	Chapter 13
)
Debtors. 	)
OPINION ON MOTION TO CONFIRM
DEBTORS' AMENDED CHAPTER 13 PLAN DATED APRIL 7, 2010.
On May 19,2010, the Debtors' motion for confirmation on the Amended Chapter
13 Plan, dated April 7, 2010 and the Trustee's objection came before the Court for an
evidentiary hearing. The parties were represented as stated on the record. Having
reviewed the record, testimony, and evidence, the Court is prepared to rule, and for the
reasons stated, overrules the Trustee's objection.
Confirmation of a plan is a core proceeding which a United Stated bankruptcy
court has jurisdiction under 28 U.S.C. §157(b)(2)(L).
At the hearing, the parties agreed that the pending issue before the court is whether
the Debtor, Mrs. Register, who has a fifty percent ownership interest in the business
known as Bridger Valley Locksmith, LLC ("LLC") should be required to include profit
from the business into her disposable income for the purpose of calculating the Debtors'
projected disposable income to be paid to non-priority unsecured creditors.
Facts:
Mrs. Register listed, as an asset on Schedule B, her 50 percent (50%) ownership
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interest in the LLC. According to Mrs. Register's testimony the remaining interest is
equally owned by her two daughters. The Debtors filed an Amended Chapter 13
Statement of Current Monthly Income (Amended Form 22C) on April 19, 2010. On the
Amended Form 22C, Debtors include in section 3 c. the amount of$158.64 as her one
half interest income from the operation of a business. Debtors do not include any
business income or expenses on their Schedules I or J.
Mrs. Register testified extensively, regarding the LLC's bank statement entries for
expenses and deposits representing sales that generated income. Mrs. Register also
testified that she prepared, for the Trustee, a Monthly Profit and Loss Statement for
January 2010 showing a total profit for that month of$4,300.30. Mrs. Register testified
that she did not know what she was doing when she completed that statement, so she
retained an accountant. Thereafter, Mrs. Register had her accountant prepare the Profit
and Loss Statement for the period of January 1,2010 through March 31, 2010. That
quarterly report indicates the following: (1) January 2010 shows a net loss of $2,209.60;
(2) February 2010 shows a net profit of$2,377.70; and, (3) March 2010 shows a net loss
of$I,876.95. Mrs. Register also testified that in the period from October 2009 through
March 2010, she took as "draws" from the business a total amount of$83.67. Mrs.
Register does not receive an income from the LLC.
Discussion:
If the trustee objects to the confirmation of a plan, then the court may not approve
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the plan unless, as of the effective date, the plan provides that all of the debtor's projected
disposable income received in the applicable commitment period, is applied to make
payments to unsecured creditors. The applicable commitment period is either three years
or not less than five years depending upon the debtor's current monthly income. In this
case, there was no controversy that the Debtors' income is below the average median
income for a household of their size in Wyoming. Therefore, their applicable
commitment period is three years.
If a chapter 13 debtor's current monthly income is below-median, the debtor is not
required to complete Form 22C, for the calculation of allowed expenditures to determine
projected monthly income. Therefore, the Court looks to the Debtors' Schedule I and J to
determine disposable income.
The Debtors did not schedule any income or expenses from the LLC. In this
Court's analysis, this was correct. The LLC is a separate business entity. Mrs. Register's
interest in the business is her fifty percent ownership interest, which she listed on
Schedule B. She does not receive a wage or income from the LLC. 	She does not pay the
expenses of the LLC from her personal accounts. She received a total nominal draw of
nearly $84.00 for a period of over nine months. The Debtors' plan includes all their
projected disposable income. Therefore, the Trustee's objection is overruled and the
confirmation of the plan granted.
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This opinion constitutes the Court's findings offact and conclusions oflaw. A
separate order shall be entered pursuant to Fed. R. Bankr. P. 9021.
DATED this e?! 	day of May, 2010.
By the Court
~~CNWFUnited States Bankruptcy Judge
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