Applicable Commitment Period

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Grace Period to Cure Arrearage Beyond Five-Year Plan Period

A bankruptcy court has discretion to grant a grace period at the end of the five-year plan to a chapter 13 debtor who has completed her plan payments but where there is a newly discovered arrearage. Klaas v. Shovlin (In re Klaas), Nos. 15-3341 & 16-3482 (3rd Cir. June 1, 2017).

Chapter 13 debtors, Paul and Beth Ann Klaas, successfully completed their plan according to its terms, but one month after completion, the trustee filed a motion to dismiss citing an unpaid arrearage of over $1,000. (The shortfall was apparently due to an increase in the Trustee’s fee during the term of the plan, and not to any missed payments.) In the motion to dismiss, the trustee stated that she would withdraw the motion if the Klaas’s paid the arrearage. They did so. By that time, however, a creditor, Elizabeth Shovlin, had joined the motion to dismiss and objected to its withdrawal. [Read more…] about Grace Period to Cure Arrearage Beyond Five-Year Plan Period

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Co-Debtor’s Death Drops Debtor to Below-Median Permitting Reduced ACP

When the major contributor to the debtors’ joint chapter 13 plan died, the surviving spouse fell to below median status and the applicable commitment period fell from 5 years to 3 years. In re Childers, No. 10-10405 (Bankr. N.D. Tex. Jan. 26, 2015). [Read more…] about Co-Debtor’s Death Drops Debtor to Below-Median Permitting Reduced ACP

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Applicable Commitment Period Applies where No Disposable Income

Adding to a growing trend among the circuits courts, the Fourth Circuit found that above-median debtors with negative disposable income must commit to a 60 month plan under section 1325(b)(1). Pliler v. Stearns (In re Pliler), No. 13-1445 (4th Cir. March 28, 2014), on direct appeal from, In re Pliler, 487 B.R. 682 (Bankr. E.D. N.C. Feb. 21, 2013). [Read more…] about Applicable Commitment Period Applies where No Disposable Income

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Ninth Circuit en Banc Decision Overrules Kagenveama

In a blow to debtors, the Ninth Circuit, in an en banc decision, has reversed its position with respect to the applicable commitment period when the debtor has less than or equal to zero disposable income. Danielson v. Flores (In re Flores), No. 11-55452 (9th Cir. Aug. 29, 2013). [Read more…] about Ninth Circuit en Banc Decision Overrules Kagenveama

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NACBA Files Amicus on Applicable Commitment Period

NCBRC filed an amicus brief on behalf of the NACBA membership in the case of In re Pliler, No. 13-1445 (4th Cir. June 20, 2013). NACBA’s brief argues that the Bankruptcy Court erred when it held that section 1325(b)(4)(B) created a minimum plan length of sixty months for above-median debtors, and that the disposable income formula set forth by Congress and reflected on Form 22C could be abandoned if it was inconsistent with income and expenses as reflected on Schedules I and J. [Read more…] about NACBA Files Amicus on Applicable Commitment Period

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Applicable Commitment Period Where No Projected Disposable Income

The Bankruptcy Court for the Eastern District of North Carolina found that the applicable commitment period set forth in section 1325(b)(1)(B) does not apply to above-median debtors with zero or negative disposable income and that early termination of the plan does not alter the debtor’s projected disposable income calculation. In re Ballew, 12-4059 (Bankr. E.D. N.C. Jan. 11, 2013). [Read more…] about Applicable Commitment Period Where No Projected Disposable Income