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Courts tend to rely most heavily on the disposable income test when incorporating
payment calculators for confirmation. Of all Chapter 13 bankruptcy calculators, payments
estimated based on a reasonable monthly budget generate frequent objections. Proof of
past expenses constitutes only some evidence of necessity, and frequently, creditors
request courts to reduce monthly living allowances to increase plan
payments.
A new monthly expense schedule is now mandatory, yet this schedule is
fraught with problems. Loopholes allow for a 15% fudge factor, and
rental expenses are highly susceptible to manipulation. The amounts
allowed for other living expenses are far below a poverty existence, and
in the end, courts are already experiencing difficulty implementing the
new rules. The new rules were hastily enacted without adequate
consultation or input from the judiciary.
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