No Early Payoff, But Chapter 13 Bankruptcy Plan Modification Possible

PLAN MAY NOT PROPOSE EARLY PAYOFF BUT 1329 MAY ALLOW POST
CONFIRMATION MODIFICATION
In re Kidd, et al, Case No. 06-41232
August 2007, Judge Karlin

The Court recognized changes in 1324(b)(4) and held that debtors may not propose an early pay off but may obtain the same in the right circumstances via 1329.

Digest by:  Jan Hamilton, Trustee

My Income Is Above Median, How Long Will My Chapter 13 Plan Run?

B22C CONTROLS, OR IF DEBTOR USES I AND J, MUST HAVE A FIVE YEAR PLAN
In re Beckerle, Case No.06-20572
April 2007, Judge Berger

ACP is a time frame of either 3 or 5 years and not a multiplier. B22C is a starting place in determining projected disposable income to be received in the 5-year period. A negative number on B22C indicates the plan is not feasible. Debtor can’t have it both ways. If the debtor relies upon I and J to prove feasibility, then the debtor must commit to a 5-year program.

Digest by:  Jan Hamilton, Trustee

13 Plan Length Figured as of Bankruptcy Filing Date

ACP IS FIXED BUT PLAN PAYMENT IS NOT
In re Anderson, Case No. 06-20664
April 2007, Judge Berger

Applicable Commitment Period is determined as of the date of filing, but the amount of the plan payment is determined as of the effective date of the plan under 1325(b). Again, the Court noted that the trustee is not required to object.

Digest by:  Jan Hamilton, Trustee

Chapter 13 Payment Amount Can Change, But Not Plan Length

APPLICABLE COMMITMENT PERIOD IS FIXED AS DATE OF FILING
In re Moore, Case No. 06-20031
April 2007, Judge Berger

Debtors’ circumstances changed post petition pre confirmation. Although this does not change the ACP, it can change the amount to be paid to creditors. The ACP is locked in as of the date of filing. The Court noted that 1325(b)(1) only comes into play if the trustee objects, and the trustee has the discretion to object or not.

Digest by:  Jan Hamilton, Trustee

My Income Is Below Median, How Long Do I Pay My Chapter 13 Payments?

BELOW THE LINE DEBTOR MUST RUN 36 MONTHS
In re Pohl, Case No. 06-41236
May 2007, Judge Karlin
The Court determined that a below the line debtor’s case must “run” 36 months, unless it
pays off all claims in full, citing 1325(b)(4). Below the line disposable income
determined by Schedule J, since the bottom half of B22C does not get filled out by a BMI
debtor. ACP is temporal and not a multiplier. Judge Karlin cited, with approval, Judge
Somers’ decision, In re Daniel and Judge Berger’s decisions, In re Beckerle and In re
Anderson on the ACP issue.

BELOW THE LINE DEBTOR MUST RUN 36 MONTHS
In re Pohl, Case No. 06-41236
May 2007, Judge Karlin

The Court determined that a below the line debtor’s case must “run” 36 months, unless it pays off all claims in full, citing 1325(b)(4). Below the line disposable income determined by Schedule J, since the bottom half of B22C does not get filled out by a BMI debtor. ACP is temporal and not a multiplier. Judge Karlin cited, with approval, Judge Somers’ decision, In re Daniel and Judge Berger’s decisions, In re Beckerle and In re Anderson on the ACP issue.

Source:  Jan Hamilton, Trustee

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