In re Grabarczyk, No. 10-37007, 2012 WL 909511, at *6–*8 (Bankr. N.D. Ohio Mar. 14, 2012) (Whipple)

“Unsecured creditors” in § 1325(b)(1)(B) means nonpriority unsecureds. “A literal interpretation of the statute would thus permit Debtors to use their disposable income to pay both priority unsecured creditors, the claims for which a deduction has been taken in calculating their disposable income, as well as general unsecured creditors. However, courts that have addressed the application of § 1325(b)(1)(B) . . . have persuasively concluded that priority claims and Chapter 13 administrative expenses deducted from CMI on Form B22C cannot be paid from the pot of funds that constitute a debtor’s disposable income. . . . Disposable income, . . . under § 1325(b)(1)(B), is to be paid to unsecured creditors . . . . Among the deductions allowed under 707(b)(2)(A) are deductions for a debtor’s payments on prepetition priority unsecured claims and for Chapter 13 administrative expenses. See 11 U.S.C. § 707(b)(2)(A)(ii)(III) and (iv). Because this calculation yields the presumptive projected disposable income of the debtor to be applied to payment of unsecured creditors, courts have generally concluded that the only reasonable interpretation of this process is that it is designed to determine the amount available to pay nonpriority unsecured creditors and, thus, that Congress intended the term ‘unsecured creditors’ in § 1325(b)(1)(B) to refer to nonpriority unsecured creditors . . . . [A]n interpretation of § 1325(b)(1)(B) that includes priority creditors in the definition of ‘unsecured creditors’ who must be paid from projected disposable income ‘obtains an absurd result.’ . . . [I]nterpreting the term ‘unsecured creditors’ in § 1325(b)(1)(B) to categorically exclude priority unsecured claims would leave below-median income debtors’ [sic] with no funds to pay those creditors. . . . [T]he only reasonable interpretation of the term ‘unsecured creditors,’ as used in § 1325(b)(1)(B), is one that refers to all unsecured creditors for whose claims the debtor has not included an expense deduction in calculating disposable income.”

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