487 B.R. 296
Bankr. N.D. Okla2013Background
- Loomis filed a Chapter 13 petition to discharge debts not dischargeable in Chapter 7, relying on the income of his fiancée, Kelly.
- Loomis has no regular income of his own; Kelly provides household support but is not legally obligated to do so.
- Loomis’ plan proposes to pay $85/month for 36 months, covering taxes and attorney fees but paying essentially nothing to unsecured creditors.
- Loomis’ employment status changed from employed as a machinist to unemployed; unemployment benefits were exhausted before confirmation hearing.
- The court must determine whether Loomis has “regular income” under §109(e) to be eligible for Chapter 13 before addressing plan confirmation.
- The plan was opposed by the Chapter 13 Trustee and Loomis’ ex-spouse based on eligibility and good-faith concerns, but the court first resolves eligibility.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Loomis has regular income to qualify under §109(e) | Eck/Jones: Loomis lacks regular income. | Loomis contends Kelly’s contributions constitute regular income. | Loomis lacks regular income; not eligible. |
| Whether a non-debtor fiancée’s discretionary support constitutes a legally enforceable commitment to fund the plan | Evidence does not show a legal obligation or binding commitment. | Contributions could fund the plan. | No enforceable commitment; not regular income. |
| If not eligible, whether the plan can be confirmed despite minimal or no distribution to unsecured creditors | Plan purports to discharge non-dischargeable obligations with little payment. | No counter-argument beyond eligibility. | Plan not confirmed; no leave to file at present. |
Key Cases Cited
- In re Jordan, 226 B.R. 117 (Bankr. D. Mont. 1998) (gift from live-in boyfriend not regular income under §109(e))
- In re Hanlin, 211 B.R. 147 (Bankr. W.D.N.Y. 1997) (voluntary parental gifts insufficient without obligation)
- In re Fischel, 103 B.R. 44 (Bankr. N.D.N.Y. 1989) (no stable income without legal obligation or commitment)
- In re Tucker, 34 B.R. 257 (Bankr. W.D. Okla. 1983) (regular income requirement under §109(e))