In re Lawrence and Kathleen MARSCH, Debtors.
United States Bankruptcy Court, D. Rhode Island.
Alfred J. Gemma, Providence, R.I., for debtors.
Randall White, DeSano & Thibodeau, Providence, R.I., for Rhode Island Higher Education Assistance Authority.
John Boyajian, Boyajian & Coleman, Providence, R.I., trustee.
DECISION DENYING CONFIRMATION
ARTHUR N. VOTOLATO, Jr., Bankruptcy Judge.
The Debtors seek confirmation of their Chapter 13 payment plan which provides *515 for the discharge of education loans accruing within the past five years. The Trustee and the Rhode Island Higher Education Assistance Authority have objected to confirmation of the plan.
The total unsecured indebtedness of Lawrence and Kathleen Marsch is $6,744.52,[1] of which $4,489.42 is an education loan. The Marsches have a combined take-home pay of $980.00 per month. Their plan calls for thirty-six (36) monthly payments of $45.00, with unsecured creditors to receive twenty-five percent (25%) of their claims. This case would be a zero percent (0%) Chapter 7.
Because approximately two-thirds of the unsecured indebtedness is comprised of debts that would be nondischargeable in Chapter 7, the Court finds a twenty-five percent (25%) dividend to unsecured creditors as not proposed in "good faith" as required by Bankruptcy Code § 1325(a)(3); 11 U.S.C. § 1325(a)(3). In re Ponanski, BK No. 8000941 (D.R.I. June 10, 1981).
Confirmation is denied.
NOTES
[1] This amount does not include an automobile loan being paid by a codebtor.