Randall S. Ferguson and Donna Renee Ferguson

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
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06/11/06
Randall S. Ferguson and Donna Renee Ferguson
04-11927
Minutes of Hearing Held On 10/5/04 Re: [2-1] Chapter 13 Plan. Confirmation
denied. Debtors have 30 days to file amended plan, convert, or dismiss. If
Debtors fail to do any of these, Trustee to submit order dismissing.
Received on: 2004-10-06 13:23:25.000
2004-10-06 00:00:00.000
2004-10-06 00:00:00.000
James Burke
Case 04-11927-s13 Doc 23 Filed 10/06/04 Entered 10/06/04 16:37:00 Page 1 of 4

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
Clerk’s Minutes
Before the Honorable James Starzynski
James Burke, Law Clerk
Jill Peterson, Courtroom Deputy
**Hearing was Digitally Recorded
Date:
TUESDAY, OCTOBER 5, 2004
In Re: Ferguson
No. 13-04-11927 SR
Oral ruling on confirmation of Chapter 13 Plan
Trey Arvizu - Debtors
Annette DeBois - Trustee
_____________________________________________________________________
TIME STARTED: 4:15 TIME ENDED: 4:35
Summary of Proceedings: Exhibits ______
Testimony ______
Confirmation denied.
Debtors have 30 days to file amended plan, convert, or dismiss.
If Debtors fail to do any of these, Trustee to submit order dismissing.
NOTE: Court’s notes for oral ruling attached.
Case 04-11927-s13 Doc 23 Filed 10/06/04 Entered 10/06/04 16:37:00 Page 2 of 4

Oral Ruling
October 5, 2004
1334; 157; 7052. Reviewed schedules and other parts of the file, plan,
testimony, exhibits and arguments of counsel. The plan will not be confirmed,
but the Debtors can have thirty days from today to file an amended plan or to
convert or dismiss their case, failing which the Trustee should submit an
order to the Court dismissing the case.
I have assumed for purpose of this ruling that the extra $120/month for
several months that Mr. Arvizu mentioned in his OS can and will be made up,
can and will be made up.
Parties (Debtor, creditors, trustee) and Court need to take the Debtors’
situation as they find it. In this case, that refers in part to the Debtors’
argument that they live in an inexpensive house and chose to do that so that
they could put more money into their retirement account, and in part to
similar arguments made by the Debtors concerning their other proposed
expenses. Congress has not specified some ultimate amount that every debtor
can work up against, and at least in this district neither have the courts.
(Candidly, what happens is that people with more income end up with budgets
that allow them to spend more money than those debtors who have less income.)
In consequence, each case gets decided on a case-by-case basis, with the
standard being the “totality of the circumstances”, a test which Justice
Scalia has characterized as providing no standard at all but a test which
allows the courts to render decisions based on the general outlines provided
by the Code and then, over time, to compare the results and see what patterns
emerge – which is probably not the worst way to ultimately construct standards
by which to make decisions.
So maybe the Debtors get credit for one vehicle and a low house payment and
maybe not. The low house payment makes sense for the Debtors anyway because
soon they will want to be in a small house (assuming the kids leave, at least
eventually. And the Debtors got the benefit of the higher retirement fund
payments for some years before they had to file. And just because some people
have a higher house payment, or have higher car payments, does not mean that
these higher payments are reasonably necessary for the support of the debtor
or a dependent of the debtor, § 1325(b)(2), which after all is the standard,
not matching or keeping up with the Joneses.
The cost of the Suburban is too high in these circumstances; with the daughter
old enough to drive the old pickup and no need for the Debtors to haul around
loads of kids for activities, and Mr. Ferguson having a company car, the
creditors do not need to support a $35m vehicle.
To give up the 6% match on the retirement funds would be a real waste, but
that only benefits the Debtors, not the creditors. So the next plan (if there
is one) needs to make this benefit work for the creditors; it needs to
increase the payments or extend the payments in order to provide the creditors
with the difference between what they would get if the Debtors continued
contributing to and repaying the retirement fund and what the creditors would
get if the Debtors stopped making the contributions and repayments to the
retirement fund and suffered the consequences of the higher taxes, including
the withdrawal penalty; in other words, the increase in the overall plan
Case 04-11927-s13 Doc 23 Filed 10/06/04 Entered 10/06/04 16:37:00 Page 3 of 4

payments would not be the gross amount of $607 but a lesser amount taking into
account that the Debtors’ disposable income would be lower because they would
have to pay a withdrawal penalty and treat the unrepaid loan as income and
therefore have to pay higher taxes.
In general, the $200/month for recreation, taking into consideration all the
other expenses that are listed (dance lessons, cable, higher hygiene costs,
etc.), is too high.
Concerning the big screen television and dining set, given the small amount of
the debt and the fact that it is for both the dining room set and the tv, and
what you get in a yard sale for a big screen tv and a dining room set may not
be very much, and the fact that the dining room set would have to be replaced
anyway, this is in effect de minimis.
In this case, there are certainly some expenses which seem high but are
justified; e.g., the phone land line so stepdaughter can call father long
distance in Denver City 2xweek, the food budget which takes into account the
health problems of the Ms. Ferguson, the charitable contributions which are
below the 15% level and appear to have been part of a regular giving pattern
and therefore are specifically permitted by § 1325(b)(2)(A), and of course the
health insurance, medication and counseling expenses for the child with
epilepsy, even though he has moved out of the house, unless there is a showing
that he can afford those expenses himself.
But other than as set out above, I don’t think that I can say what is
reasonable and what is not, and so I leave that to the Debtors and the trustee
and the creditors to work out, or to raise again at another hearing. Of
course, what it may require to confirm a plan is extending the plan beyond 36
months, or making higher payments, or both, but this plan is not confirmable.
AD tdo.
Case 04-11927-s13 Doc 23 Filed 10/06/04 Entered 10/06/04 16:37:00 Page 4 of 4