The Honorable Lawrence L. Piersol, United States District

1

Judge for the District of South Dakota.

 The Honorable Irvin N. Hoyt, Chief Judge, United States

2

Bankruptcy Court for the District of South Dakota.

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No. 95-4200

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In re: Junior Sebastian *

Hammrich; Joyce Marie Hammrich, *

*

Debtors. *

 __________________ *

*

Junior Sebastian Hammrich; * Appeal from the United States

Joyce Marie Hammrich, * District Court for the

* District of South Dakota.

Debtors/Appellants, *

*

v. *

*

John S. Lovald, Chapter 12 *

Trustee, *

*

Claimant/Appellee. *

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 Submitted: July 12, 1996

 Filed: October 21, 1996

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Before WOLLMAN, JOHN R. GIBSON, and HANSEN, Circuit Judges.

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WOLLMAN, Circuit Judge.

Junior and Joyce Hammrich appeal the district court's judgment

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affirming the bankruptcy court's order that they pay $95,885.86 in

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disposable income to their unsecured and undersecured creditors before

receiving a discharge. We affirm.
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I.

Junior and Joyce Hammrich filed a voluntary petition for

reorganization under Chapter 12 of the Bankruptcy Code on January 26, 1987.

The plan was amended and went into effect in October of 1989 and was to

terminate on January 1, 1993. The plan required that the debtors pay all

disposable income under 11 U.S.C. § 1225 (b)(1) over the three years of the

plan. 

The debtors filed their final report and account and requested a

discharge on March 11, 1993. The trustee and Farm Credit Bank of Omaha

objected to the discharge and requested that the court make a disposable

income determination. After two evidentiary hearings, the bankruptcy court

concluded the debtors had unpaid disposable income of $95,885.86 and

ordered them to pay that amount in order to obtain a discharge. The

district court affirmed, finding that the bankruptcy court "performed a

thorough analysis of the disposable income issue and made a carefully

considered decision."

II.

We review the bankruptcy court's findings of fact for clear error and

its legal conclusions de novo. Markmueller v. Case, 51 F.3d 775, 776 (8th

Cir. 1995). While the initial burden is on the trustee to show that the

debtors are not contributing all of their disposable income to the plan,

the ultimate burden lies with the debtors to show that they are satisfying

that obligation. In re Kuhlman, 118 B.R. 731, 738 (Bankr. D.S.D. 1990).

Debtors contend that the bankruptcy court erred in its calculation

of disposable income. We agree with the district court's conclusion that

the bankruptcy court's findings in calculating disposable income were not

clearly erroneous.

The Code defines "disposable income" as
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income which is received by the debtor and which is not

reasonably necessary to be expended (A) for the maintenance or

support of the debtor or a dependent of the debtor; or (B) for

the payment of expenditures necessary for the continuation,

preservation, and operation of the debtor's business. 

11 U.S.C. § 1225(b)(2). Determining disposable income is "a fact-intensive

inquiry into whether debtor has `income which is in excess of that

reasonably required for maintenance and continuation of [its] farming

operation from one year to the next.'" Broken Bow Ranch, Inc. v. Farmers

Home Admin., 33 F.3d 1005, 1008 (8th Cir. 1994) (emphasis in original)

(quoting In re Coffman, 90 B.R. 878, 885 (Bankr. W.D. Tenn. 1988)). The

amount by which the debtors' income exceeds their obligations at the end

of their plan, after accounting for carryover funds sufficient to continue

the their farming operation, is deemed disposable income. Broken Bow, 33

F.3d at 1009. 

The bankruptcy court found, and the district court agreed, that the

debtors' total inventories amounted to $281,601.00 and that their total

obligations amounted to $16,980.00, for a disposable income calculation of

$264,621. The court then determined that the debtors would require

$168,735.14 to continue their farming operation and subtracted that amount

from its disposable income determination in arriving at a final figure of

$95,885.86.

 

The debtors contend first that the bankruptcy court erred by

including in total inventories 326 calves on hand at the termination of

their plan. The debtors maintain that these calves were not marketable

commodities to be included in the inventory part of the calculation because

they had not yet reached the weight at which they are normally sold. The

bankruptcy court found that the calves had some value and were saleable on

the date of
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termination.

Although the debtors may not have received the same amount they would

receive upon a sale of these calves at their full weight, the calves were

of some value at termination of the debtors' plan. Simply having to sell

the calves before the date debtors normally brought calves to market does

not render them completely unmarketable. Thus, we conclude that the

bankruptcy court's finding that the calves were marketable commodities is

not clearly erroneous and its inclusion of them in the disposable income

calculation was proper.

The debtors also assert that the court erred when it included in the

disposable income calculation government payments received after

termination of the plan. Even though the payments were not received until

after termination of the plan, they were attributable to debtors' farming

operation during the plan and were thus properly included in the disposable

income calculation. Broken Bow, 33 F.3d at 1009. 

Debtors' contend that the bankruptcy court erred in excluding

repayment of a loan and payment of 1992 real estate taxes from the expense

portion of the calculation. Only those obligations that exist at the end

of the plan period are to be included in the disposable income calculation,

however. See Broken Bow, 33 F.3d at 1009. Neither the loan nor the real

estate taxes were due at the end of the plan period. Therefore, the court

did not err in excluding those amounts from its calculation of disposable

income.

The debtors' final contention is that the court erred in not leaving

adequate funds for them to continue their farming operation. The

bankruptcy court made a detailed analysis of the amount of funds necessary

to continue the debtors' farming operation. This determination is

supported by the record and is not clearly erroneous.
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The judgment is affirmed.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.