Opinion ID: 201503
Heading Depth: 2
Heading Rank: 2

Heading: Reasonably Necessary Expenses

Text: 31 The Watsons contend that the bankruptcy court erred in determining that parochial school tuition payments for their two minor children are not reasonably necessary expenses within the provisions of 11 U.S.C. § 1325(b). To qualify for confirmation, the Chapter 13 plan must provide that all of the debtor's disposable income to be received in the three-year period beginning on the date that the first payment is due under the plan will be applied to make payment under the plan. 11 U.S.C. § 1325(b)(1)(B). Disposable income is defined as: 32 income which is received by the debtor and which is not reasonably necessary to be expended — 33 (A) for the maintenance or support of the debtor or a dependent of the debtor, including charitable contributions ... 34 11 U.S.C. § 1325(b)(2)(A). At issue here is whether the portion of the Watsons' income devoted to pay parochial school tuition for their two minor children is income reasonably necessary to be expended for this purpose. In reviewing the bankruptcy court's determination of this matter, we review for clear error unless the bankruptcy court's analysis was based on a mistaken view of the legal principles involved. In re Carp, 340 F.3d at 22. Here, the bankruptcy court's view of the guiding legal principles was not mistaken and the court did not commit clear factual error. 35 We begin with the self-evident proposition that it is the debtor who bears the burden of proving that an expense is reasonably necessary. See, e.g., Lynch v. Tate (In re Lynch), 299 B.R. 776, 779 (W.D.N.C.2003); In re Webb, 262 B.R. 685, 688 (Bankr.E.D.Tex.2001). Here, the bankruptcy court concluded that the debtors have not shown that the public schools in their area ... are not adequate, and neither have they suggested any other special need [to attend parochial school]. In re Watson, 299 B.R. at 58. The court went on to allude to the general proposition advanced in Webb and by other bankruptcy courts that [i]n the absence of some compelling circumstance ... a private school education is not reasonably necessary. In re Webb, 262 B.R. at 690; see, e.g., In re Jones, 55 B.R. 462, 467 (Bankr.D.Minn.1985) (An expensive private school education is not a basic need of the Debtor's dependents....). The court then went on to distinguish the present case from other bankruptcy cases where compelling circumstances for a private education have been found to exist. See In re Watson, 299 B.R. at 58. It concluded, in effect, that the Watsons had not shown any educational necessities or special circumstances why their children needed to attend parochial school in lieu of the available public school. The court went on to say: 36 The only reason advanced by [the debtors] is preferential, i.e., their children have always attended parochial school because of the family's strong religious ties.... Allowing these Debtors to pay parochial school tuition which over the life of the Plan will exceed the amount distributed to creditors, is to require general creditors to fund the private education of the Debtors' kids. 37 Id. at 58-59. 38 As noted above, we defer broadly to the bankruptcy court's determinations in a matter of this type, which entail balancing the creditors' rights against the appropriate basic needs of the debtors and their dependents. We can find no clear error in the balance the court struck here in its thoughtful opinion. 39 The Watsons complain that they were unfairly criticized by the court for what it found was their unwillingness to forgo certain borderline and/or excessive expenses while also claiming the tuition expense. We have examined the record and see no clear error in the court's overall assessment in this regard. 40 To allow the Watsons to pay parochial school tuition over the life of the proposed plan would require already severely reduced creditors to fund the private education of the Watsons' children. We can appreciate the importance attached by the Watsons to the religious values of a parochial school education. Still, it is not impossible to inculcate those values outside of a school, and the court could reasonably conclude, in the circumstances presented here, that it would be improper to impose the added expense on the Watsons' unpaid creditors where the children's educational needs could otherwise be met in the public schools. There was no clear error in the bankruptcy court's determination.