Robert Damien Fox

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UNITED STATES BANKRUPTCY COURT
DISTRICT OF HAWAII
In re:
ROBERT DAMIEN FOX,
Debtor.
Case No.: 25-01159
Chapter
Related: ECF 2
ORDER REGARDING PLAN CONFIRMATION
The trustee raised two questions about confirmation of debtor Robert
Damian Fox’s chapter 13 plan: (1) whether the plan properly provides
interest on the Class 1 mortgage arrearage, and (2) whether alleged
contributions from the debtor’s estranged spouse must be included in the
debtor’s projected disposable income. I find that the plan must be amended
to provide interest on the principal portion of the arrearage, and that the
Date Signed:
March 31, 2026
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spousal contribution question does not bar confirmation.
I. 	Background
Mr. Fox represents that he and Ms. Cecilia Ybanez Bunghanoy-Fox
are legally married and living in the same house but are estranged.1 Ms.
Bunghanoy Fox was also a chapter 13 debtor in this court.2
The trustee objected to Mr. Fox’s plan on the grounds that the Class 1
mortgage creditor, Bank of Hawaii (BOH), filed a proof of claim using an
outdated form that did not separate the principal balance and prepetition
arrearage. The trustee argued that clarification is needed to determine
whether the plan is adequately funded.
The trustee also objected on the basis that the separate budgets of Mr.
Fox and Ms. Bunghanoy-Fox both provided for full payment of the
mortgage. The trustee argued that if Ms. Bunghanoy-Fox pays $851.40 each
month to Mr. Fox, that contribution may affect Mr. Fox’s applicable
commitment period and projected disposable income.
1 ECF 18.
2 Case No. 24-00700.
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Counsel for Mr. Fox and Ms. Bunghanoy-Fox responded that Ms.
Bunghanoy-Fox does not pay the mortgage but instead sometimes pays
$851.40 per month in rent to Mr. Fox, and that she has fallen behind on
those payments.3 He further asserted that, because those payments are
speculative and irregular, they are not included in Mr. Fox’s “projected
disposable income.”
The trustee’s supplemental memorandum requested a declaration
detailing payments Mr. Fox received from Ms. Bunghanoy-Fox during the
180-day prepetition and postpetition periods. He stated that if the amounts
are zero or negligible, the issue may be moot.4
After all of the memoranda were filed, the court dismissed Ms.
Bunghanoy-Fox’s chapter 13 case because she did not make her plan
payments.
II. 	Discussion
a. Interest on Bank of Hawaii’s Class 1 Claim
3 ECF 19.
4 ECF 24.
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The trustee objected to Mr. Fox’s plan on the basis that it provides for
zero percent interest on Class 1 creditor BOH’s claim.5
Under § 1322(e), the amount necessary to cure a default is
determined by the underlying agreement and applicable nonbankruptcy
law. Under Hawaii law and the standard form of mortgage note, interest
accrues on the portion of an arrearage consisting of principal.6 Therefore, a
cure and maintenance plan may not provide for 0.00% interest on the
principal portion of the prepetition arrears. If Mr. Fox is agreeable to
amend the plan to provide for interest at the contract rate on the principal
portion of the prepetition arrearage, the court would enter an order
confirming the plan with that modification.
The trustee also pointed out that BOH initially used an outdated
mortgage proof of claim form that did not separately identify the principal
portion of the prepetition arrearage. BOH has now filed an amended claim
5 While Mr. Fox takes issue with the trustee objecting to BOH’s error, the trustee is correct that he has an
independent statutory duty to ensure that the plan is properly administered and that it does not contain
impermissible provisions. Clarification of the arrearage components is necessary to determine whether
the plan provides adequate funding. 11 U.S.C. § 132(b)(1).
6 In re Silla, No. 21-01032 (Bankr. D. Haw. Jan. 26, 2022).
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using the correct form that does specify the principal portion of the arrears.
b. Contributions from Ms. Bunghanoy-Fox
The trustee raised concerns regarding whether Ms. Bunghanoy-Fox,
rather than Mr. Fox, is making some or all of the mortgage payments that
Mr. Fox claims as an expense in his budget, or whether Mr. Fox receives
rental income from Ms. Bunghanoy-Fox. Mr. Fox has filed a declaration
stating that he pays the entire mortgage on the shared residence and that
Ms. Bunghanoy-Fox is delinquent in her obligation to pay rent to him.7 The
only contrary evidence is the budget that Ms. Bunghanoy-Fox filed in her
chapter 13 case stating that she does pay that amount of rent.8 But the court
has just dismissed Ms. Bunghanoy-Fox’s chapter 13 case due to her failure
to maintain plan payments.9 Ms. Bunghanoy-Fox’s inability to make her
plan payments means that her budget is unrealistic and unreliable.
Thus, the only credible evidence is Mr. Fox’s declaration under
penalty of perjury that Ms. Bunghanoy-Fox is not paying rent to him. (His
7 ECF 18 at 3.
8 Case No. 24-00700, ECF 3 at 34.
9 Case No. 24-00700, ECF 60.
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lawyer states that her payments were inconsistent, unreliable, and often
not made, but these statements are unsworn and inadmissible.10)
III. 	Conclusion
The trustee’s objection regarding interest on BOH’s Class 1
arrearage claim is well taken. The plan must provide for interest at the
contract rate on the principal portion of the arrearage as discussed above. If
Mr. Fox agrees to that provision, the parties may submit an order
providing for that modification. If he does not, the court will enter an order
denying confirmation of the plan and providing that the court will dismiss
the case unless, within 14 days of entry of that order, Mr. Fox files an
amended plan or converts the case to chapter 7.
The trustee’s objection regarding contributions from Ms. Bunghanoy-
Fox is overruled.
END OF ORDER
10 ECF 19; see Fed. R. Bankr. P. 9011(b)(3) (requiring that factual contentions must have evidentiary
support).
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