In re Wise, No. 12-00262, 2012 WL 3536469, at *11 (Bankr. D.D.C. Aug. 16, 2012) (Teel)

Not bad faith that debtor excludes Social Security income from projected disposable income; debtor can voluntarily use Social Security income to pay mortgage arrearages and need not continue paying Social Security income to unsecured creditors after mortgage arrearages are paid. “That Wise’s plan, as modified, will call for plan payments of $699 per month during the first 15 months and will drop to $71.58 in the last 21 months of the plan (when plan payments will be committed towards paying unsecured creditors) does not demonstrate bad faith. Indeed, it will result in unsecured creditors being paid more quickly than under the second amended plan’s provision for constant payments of $333 per month. . . . Wise is paying $699 per month for the first 15 months, via devoting his Social Security income towards making those payments, because he is being forced by § 1322(b)(5) to do so. Nevertheless, the mortgage arrears is a permissible expense in determining projected disposable income. On the income side, the Social Security income he devotes towards plan payments in the first 15 months of the plan is specifically excluded from projected disposable income. By reducing plan payments to $71.58 per month for the last 21 months of the plan, Wise is simply replenishing the Social Security income, excluded from projected disposable income, that he was forced to use for a permissible expense during the first 15 months of the plan. A ruling that this is bad faith would amount to a circumvention of the requirement that projected disposable income exclude Social Security income.”

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