## Facts

- Lynnel L. Jones, an attorney, filed a Chapter 13 petition on May 14, 1985, when she was unemployed.
- Jones’s household included her husband, who received disability income, and their three children.
- After filing, Jones obtained employment and filed a Chapter 13 statement reflecting the household’s post-filing income and expenses.
- The Chapter 13 statement listed combined monthly income of about $4,324 and monthly expenses of about $4,178, leaving about $146 in monthly disposable income by Jones’s calculation.
- Listed expenses included approximately $500 per month for one child’s college tuition and $500 per month for another child’s private secondary-school tuition.
- Other notable listed expenses included a $989 monthly house payment and about $515 per month for food.
- Jones proposed a Chapter 13 plan that would pay only a small dividend to unsecured creditors.
- An unsecured creditor objected to confirmation solely on the ground that the tuition payments were not “reasonably necessary” for the maintenance or support of the debtor or her dependents under 11 U.S.C. § 1325(b).

## Issues

1. When an unsecured creditor objects under 11 U.S.C. § 1325(b), are a debtor’s monthly payments for a child’s college tuition and a child’s private secondary-school tuition “reasonably necessary” expenses, or must those amounts be treated as disposable income that must be paid into the Chapter 13 plan?

## Decision

- The court sustained the creditor’s objection under § 1325(b).
- The court held that the tuition expenses were not reasonably necessary for the maintenance or support of the debtor or her dependents for purposes of calculating disposable income.
- Because the plan did not commit all projected disposable income as required by § 1325(b) in response to a creditor’s objection, the court denied confirmation of the plan as proposed.
- The court required that any confirmable plan commit the debtor’s projected disposable income (including amounts attributable to non-necessary expenditures) to plan payments during the applicable period.

## Legal Principles

- If the trustee or the holder of an allowed unsecured claim objects to confirmation, a Chapter 13 plan cannot be confirmed unless it provides that all of the debtor’s projected disposable income to be received during the statutory period will be applied to payments under the plan. 11 U.S.C. § 1325(b).
- “Disposable income” excludes amounts reasonably necessary for the maintenance or support of the debtor and the debtor’s dependents; expenses that exceed that level must be included in disposable income.
- In applying § 1325(b)’s ability-to-pay requirement, the bankruptcy court evaluates the debtor’s budget and may disallow discretionary expenditures that reduce payments to unsecured creditors.
- Private school tuition and voluntary college tuition payments for dependents may be treated as non-necessary expenses in Chapter 13, requiring the debtor to redirect those funds to plan payments when an objection is made.

## Conclusion

In Re Jones denied confirmation of a Chapter 13 plan after an unsecured creditor objected under § 1325(b), holding that the debtor’s claimed private secondary-school and college tuition payments were not reasonably necessary support expenses and therefore had to be counted as disposable income committed to the plan.


In Re Jones, 55 Bankr. 462 (1985)