9th Cir BAP – “NO” to Stripped Mortgage and Surrendered Property Deductions on the Chapter 13 Means Test

The Ninth Circuit BAP ruled in two cases, In re Martinez and In re Smith, that Chapter 13 debtors may not take deductions for payments on stripped mortgages and surrendered property, respectively. They relied heavily on the “reasonable and necessary” language of 1325(b)(2), finding that the application of the means test as stated in (b)(3) was limited by the reasonable and necessary language in (b)(2).


More analysis to come . . .