In re Lopez

MEMORANDUM DECISION REGARDING OBJECTION TO CONFIRMATION OF CHAPTER 13 PLAN

Deanna Hazelton, Esq., appeared on behalf of the chapter 13 trustee, Michael H. Meyer, Esq. Patrick Kavanagh, Esq., appeared on behalf of the debtor, Ellyn D. Lopez (the “Debtor” or “Lopez”).

Introduction.

The “cobra effect” is the unintended consequence of a blanket rule. The serpent slithers and coils around the allowable expenses debtors may use to determine their “projected disposable income” under 11 U.S.C §§ 1325(b)(2) and 707(b)(2)(A) and (B). When the broad sweep of a rule results in too much “human ingenuity,” the cobra effect arises and the serpent strikes. The bankruptcy court then tames the snake, applies the law, and determines whether the debtor or creditor loses. This case shows the importance of the bankruptcy court keeping the keys to the cobra’s den.

Background and Findings of Fact.

According to the record in the main docket and the related dischargeability complaint filed by a major unsecured creditor (AP# 16-01073), 2 the Debtor was propelled into this case by a series of internet financial transactions in 2015. 3 The Debtor *161 filed her chapter 13 bankruptcy case on March 30,…