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Topic #42:: Chapter 13: Length of plan for above median income debtors

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Chapter 13 > Length of plan

Chapter 13: Length of plan for above median income debtors

8 Cases , IssueID 42
Ch 7 Means Test
Form 22A, Line 18
Ch 13 Means Test
Form 22C Line 17

Topic Description:

Uses §707 (b)(2)(A)(ii)(I) (via for Chapter 13 § 1325(b)(1)(B): "applicable commitment period." (i.e. plan length 3 or 5 years). (Same code section that determines Chapter 7 "presumption of abuse" in means test.)
§707 (b)(2)(A)(ii)(I) = "disposable income" (snapshot of "current monthly income" (CMI) at time of filing)
§ 1325(b)(1)((B) = "projected disposable income" (forward-looking, but by what method? consider actual facts or apply mechanical projection of 'snapshot' over next 60 months.)

"Under the law predating BAPCPA, a chapter 13 plan may not be confirmed over the objection of the trustee or an unsecured creditor unless the debtor either pays unsecured creditors in full or devotes all "projected disposable income" to the plan for at least three years. Section 1325(b).
BAPCPA makes several important changes in the calculation of disposable income,

If the debtor's annualized current monthly income is larger than the State's median, allowable expenses are determined as provided by the means test under § 707(b)(2).
Conversely, if the debtor's annualized current monthly income is smaller than the State's median, then allowable expenses are those that are reasonably necessary for the maintenance and support of the debtor and the debtor's dependents without reference to § 707(b)(2)importing for some purposes the provisions of 11 U.S.C. § 707(b)(2) allowances and calculations.

Finally, the BAPCPA introduces a new term in § 1325(b)(1)(B): "applicable commitment period." If the annualized current monthly income of the debtor and the debtor's spouse is above the State median, the debtor must pay all disposable income into the plan for a five-year period. However, if the annualized current monthly income of the debtor and the debtor's spouse is below the State median, the debtor must pay all disposable income into the plan for only three years. "
http://www.almb.uscourts.gov/BankruptcyReformImplementation/means_test_dhw.pdf

Lines of Cases:

A:

Above median income debtor must have 60 month plan even though no disposable income

B::

36 month plan sign of bad faith

C:

if no disposable income, then 60 month minimum does not apply

D:

Cannot shorten 60 month plan post-confirmation unless paying unsecured creditors 100%

E:

"Everything else..."
  • Type A = Above median income debtor must have 60 month plan even though no disposable income
  • Type B = 36 month plan sign of bad faith
  • Type C = if no disposable income, then 60 month minimum does not apply
  • Type D = Cannot shorten 60 month plan post-confirmation unless paying unsecured creditors 100%
  • Type E = "Everything Else"
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Cases for Zip , California Northern District Bankruptcy Court

Ninth Circuit Cases

� Danielson v. Flores

9th Cir. - 2013 WL 4566428 - 2013-08-29 - 13 , above

Google ID#: 14657866120195781029
(Type A : Above median income debtor must have 60 month plan even though no disposable income )

(en banc) Ninth Circuit overruled it previous decision in Kagenveama, and held that applicable commitment period represented minimum plan duration (when trustee or unsecured creditor objects)
Great dissent by judges Pregerson and Kosinski.

Other Circuits

� Mort-Ranta v. Gorman

4th Cir. - 721 F.3d 241 - 2013-03-20 - ,

Google ID#: 1243419426068044387
(Type A : Above median income debtor must have 60 month plan even though no disposable income )

� In re Tennyson

11th Cir. - 611 F.3d 873 - 2010-05-16 - ,

Google ID#: 15747057016466853137
(Type A : Above median income debtor must have 60 month plan even though no disposable income )

� In re Moose

Bankr. E.D. Virginia - Case No. 09-16920-SSM - 2009-11-12 - 13 , Above

Google ID#: 1594876697350885436
(Type A : Above median income debtor must have 60 month plan even though no disposable income )

Above median income debtor must have 60 month plan even though no disposable income according to the means test.

� In re Vilca

Bankr. E.D. Virginia - Case No. 09-16569-SSM - 2009-11-05 - 13 , Above

Google ID#: 4887528488172158928
(Type B : 36 month plan sign of bad faith )

� In re Musselman (Musselman v. eCast Settlement Corp.)

E.D.N.C. - 394 B.R. 801 - 2008-09-30 - 13 , Above

Google ID#: 3682934620630315002
(Type : )

If a debtor has zero or negative "projected disposable income," then there is nothing "to be received in the applicable commitment period." Id. If there is nothing for a debtor to receive in the "applicable commitment period," there is nothing to "appl[y] to make payments, to unsecured creditors under the plan." Id. If none of the subsection's provisions are relevant to a debtor's situations, then that subsection does not apply. Therefore the term "applicable commitment period" simply does not apply to Musselman.

� In re Anderson

Bankr.D.Kan. - 367 B.R. 727 - 2007-04-13 - 13 , Below

Google ID#: 14186290537695236908
(Type E : )

The issue is not whether the Debtor can amend her schedules to show the increased household size. She can.[9] The issue is as of what date the Applicable Commitment Period for the Debtor's Chapter 13 plan is determined and the extent to which the Debtor's post-petition and pre-confirmation change of household size affects the calculation of the Applicable Commitment Period.

� Danielson v. Flores

9th Cir. - 2013 WL 4566428 - 2013-08-29 - 13 , above

Google ID#: 14657866120195781029
(Type A : Above median income debtor must have 60 month plan even though no disposable income )

(en banc) Ninth Circuit overruled it previous decision in Kagenveama, and held that applicable commitment period represented minimum plan duration (when trustee or unsecured creditor objects)
Great dissent by judges Pregerson and Kosinski.

� Mort-Ranta v. Gorman

4th Cir. - 721 F.3d 241 - 2013-03-20 - ,

Google ID#: 1243419426068044387
(Type A : Above median income debtor must have 60 month plan even though no disposable income )

� Baud v. Carroll

6th Cir - No. 09-2164 - 2011-02-04 - 13 ,

Google ID#: 14826721093173278995
(Type A : Above median income debtor must have 60 month plan even though no disposable income )

plan must be 5 years even if no disposable income.

� In re Tennyson

11th Cir. - 611 F.3d 873 - 2010-05-16 - ,

Google ID#: 15747057016466853137
(Type A : Above median income debtor must have 60 month plan even though no disposable income )

� In re Moose

Bankr. E.D. Virginia - Case No. 09-16920-SSM - 2009-11-12 - 13 , Above

Google ID#: 1594876697350885436
(Type A : Above median income debtor must have 60 month plan even though no disposable income )

Above median income debtor must have 60 month plan even though no disposable income according to the means test.

� In re Vilca

Bankr. E.D. Virginia - Case No. 09-16569-SSM - 2009-11-05 - 13 , Above

Google ID#: 4887528488172158928
(Type B : 36 month plan sign of bad faith )

� In re Musselman (Musselman v. eCast Settlement Corp.)

E.D.N.C. - 394 B.R. 801 - 2008-09-30 - 13 , Above

Google ID#: 3682934620630315002
(Type : )

If a debtor has zero or negative "projected disposable income," then there is nothing "to be received in the applicable commitment period." Id. If there is nothing for a debtor to receive in the "applicable commitment period," there is nothing to "appl[y] to make payments, to unsecured creditors under the plan." Id. If none of the subsection's provisions are relevant to a debtor's situations, then that subsection does not apply. Therefore the term "applicable commitment period" simply does not apply to Musselman.

� In re Anderson

Bankr.D.Kan. - 367 B.R. 727 - 2007-04-13 - 13 , Below

Google ID#: 14186290537695236908
(Type E : )

The issue is not whether the Debtor can amend her schedules to show the increased household size. She can.[9] The issue is as of what date the Applicable Commitment Period for the Debtor's Chapter 13 plan is determined and the extent to which the Debtor's post-petition and pre-confirmation change of household size affects the calculation of the Applicable Commitment Period.

All Cases A to Z


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