In Re Keller

MEMORANDUM DECISION

Within two months of filing their May 12, 2004 chapter 13 petition the debtors, James and Diana Keller, confirmed a plan requiring them to make 48 monthly payments of $2,175 to the trustee for distribution to their secured and unsecured creditors. Their plan also provides that “[u]nless all allowed unsecured claims are paid in full, the plan shall not terminate earlier than the stated term or 36 months, whichever is longer.”

Plan payments are being funded solely by “the future projected disposable income of’ the debtors. See 11 U.S.C. § 1322 (a)(1). That is, the plan does not provide for proceeds from the sale or refinance of property to supplement the debtors’ future income as a source for plan payments.

From this stream of plan payments, unsecured creditors have been promised no less than a 31.5% dividend. Based on scheduled claims, this dividend will amount to approximately $5,254.15. Because the plan requires that plan payments continue for the full 48 months (unless claims are paid in full over a shorter period), the 31.5% dividend is the minimum unsecured creditors will receive. See In re Pedersen, 229 B.R. 445, 452-53 (Bankr.E.D.Cal.1999) (explaining…