A Chapter 13 Plan is probably the most complex part of any personal bankruptcy filing. In practice, you will become familiar with how your local Chapter 13 Trustee wants the Plan developed. However, even if you are unfamiliar with the local Trustee's desires, if you know the basic requirements, the Plan always can be amended later to conform to the Trustee's recommendations.

1. How do you determine the debtor's disposable income for the Plan?
2. What debts are paid through the Chapter13 Plan, and what debts are permissible or necessary to be paid directly by the debtor?

Using the fact pattern below, develop a proposed Chapter 13 Plan. Use the template to complete the assignment.

Fact Pattern for the Assignment

Joseph and Sharon Eaton are a married couple with two children under 18 residing in their home. Their incomes require them to file a Chapter 13 bankruptcy, but they also are interested in Chapter 13 to save their home and repay as much of their debt as possible.

Joseph grosses approximately $70,000 annually, and Sharon earns $45,000 annually. After payment of their basic expenses as listed on their petition, including mortgage payments and their vehicle payment, the Eatons have $1,000 left monthly to contribute to a Plan (monthly disposable income).

The debtors have $35,000 in unsecured credit card debt. Sharon has a 2015 Chevy Tahoe worth $15,000 with a lien balance of $20,000. The interest on the Tahoe loan is 10%; her monthly payments are $650.00. All her payments are up-to-date, and she has 46 payments left on the loan. Joseph owns a 2011 Chevy Impala worth $3,500 with no lien.

The debtors own the home they reside in. The home is worth $200,000 and they have a mortgage against it of $190,000. Their monthly payments are $2,000, including only principal and interest at a rate of 5%. The debtors bought the home one year ago and are behind three payments.

The debtors owe the IRS $2,500 in income taxes for the last tax year. However, after adjusting their exemptions, they expect to either break even or receive a small refund in future years.

Your law firm charges a fee of $2,000 plus filing fee for a Chapter 13 case. The debtors paid the filing fee in advance and paid $1,000 of the attorney's fee. Your firm has agreed to receive the remainder of the fee through the Chapter 13 plan.

The debtors have no non-exempt property and no property they intend to surrender.

In developing the Chapter 13 Plan, if you believe you need additional information you may supply your own additional facts, but be sure to indicate in your submission any additions or assumptions you made. Also, you need not calculate exact amortizations on loans; if you would rather, you may estimate any amounts needed.

Click on the following link to view a complete list of bankruptcy forms: http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx