A 55-year-old Chapter 13 debtor with above-median income filed a plan in which he proposed to pay $142 per month for 60 months to the Chapter 13 Trustee. The plan payments, totaling about $8,521, were just enough to pay for his attorneys’ fees, the Chapter 13 Trustee’s fees, and his priority tax debt. The debtor also proposed to continue making voluntary retirement contributions in the approximate amount of $59,700 over the life of the plan, while paying nothing to his unsecured creditors, to whom he owed over $66,000 for credit card debt. The debtor wished to continue his retirement contributions for the term of his plan, he explained, because he wanted to be “done working” by age 60 and “just relax” for the rest of his years.
The Chapter 13 Trustee objected on the ground that the debtor’s plan was not proposed in good faith, as required by 11 U.S.C. § 1325(a)(3). Evaluating the plan under the totality of the circumstances standard, the Court found that the debtor had failed meet his burden under Section 1325(a)(3), concluding that the debtor’s plan to enlarge his already-substantial retirement account while paying his unsecured creditors nothing was an abuse of the purpose and spirit of Chapter 13 as well as a manipulation of the Bankruptcy Code. The Court, therefore, denied confirmation of the plan.