In re Gonzalez, Case No. 18-10156 EEB

Chapter 13 debtor who owned a small business sought confirmation of a three-year plan, asserting that he and his wife were below-median income debtors.  The debtors calculated their current monthly by including the husband’s net business income, as instructed on Official Bankruptcy Form 122C-1.  The chapter 13 trustee objected, arguing that, regardless of the Form, the debtors had to include the husband-debtor’s gross business income when calculating their current monthly income.  The Court reviewed the minority and majority views on this issue and concluded that neither approach could fully resolve what appears to be a mistake in drafting by Congress.  Nevertheless, the Court adopted the majority view, which includes gross business income in the debtors’ current monthly income, and then deducts business expenses later when calculating disposable income.  Applying the majority view meant that the debtors had above-median income and, thus, had to propose a five-year plan.