An Individual Chapter 11 Plan must be funded by more than Business Income

In re Patel, a recent CA bankruptcy decision, held that chapter 11’s requirement for individual debtors to pay unsecured creditors  from “disposable income,” encompasses income from all sources.  Note that this would equally apply in Subchapter V.  The Patel Chapter 11 plan listed only motel income which was insufficient to fund a payout to unsecured creditors.  While the debtor’s additional income could have funded the plan, the case was converted to Chapter 7 at the creditors’ request.