Mark Anthony Lyon and Fredlynn Luanna Kiku Lyon

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
MARK and FREDLYNN LYON, No. 06-10502
Debtor(s).
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Memorandum re Disposable Income
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The issue before the court is whether the calculated disposable income is the only permitted Chapter
13 plan payment, or whether the court may take into account actual income to permit a lesser payment where
actual income is lower and require a higher payment where actual income is greater. As the parties have
pointed out, there are numerous trial court cases going both ways on this issue and no appellate cases as yet
for guidance.
Pending appellate direction, the court elects to take a pragmatic approach. If the court were to take
the calculated disposable income as the only permissible payment, then some debtors would obtain windfalls
while other debtors would suffer hardship. Considering actual income allows the court to demand higher
payment from debtors who can afford it and require smaller payment from debtors who cannot afford more.
The court accordingly elects to follow the temporary latest word on the subject, In re Slusher, – B.R.
– (Bkrtcy.D.Nev. 2007). That case holds, in a nutshell, that if the number on line 58 of Form B22C
accurately represents the anticipated future income of the debtor, the court will use it as “projected disposable
income.” However, in certain circumstances, such as when a debtor gains or loses a job or when he or she
receives an increase or decrease in pay immediately before filing bankruptcy, Form B22C is less authoritative,
Entered on Docket
January 23, 2007
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 06-10502 Doc# 25 Filed: 01/23/07 Entered: 01/23/07 10:00:47 Page 1 of 2

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and serves only as a starting point for an investigation that will include an examination of Schedules I & J.
Further proceedings in this case shall be consistent with this ruling.
Dated: January 23, 2007
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 06-10502 Doc# 25 Filed: 01/23/07 Entered: 01/23/07 10:00:47 Page 2 of 2