It was not enough that the chapter 13 debtors committed to paying off their unsecured debts in their entirety, the trustee demanded that they comply with the disposable income test of section 1325(b)(1)(B). In re Bailey, No. 13-60782 (Bankr. E.D. Ky. Nov. 21, 2013). Read More
Tag Archive: disposable income
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Debtor Need Not Commit All PDI in 100% Plan
Posted by NCBRC - January 8th, 2014
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Ninth Circuit en Banc Decision Overrules Kagenveama
Posted by NCBRC - August 29th, 2013
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
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Fourth Circuit Takes on Applicable Commitment Period Issue
Posted by NCBRC - June 6th, 2013
The Fourth Circuit has accepted two direct appeals presenting the issue of whether the applicable commitment period for a chapter 13 plan applies when there is no projected disposable income. Both cases first treat the issue of whether an expected change in payments during the course of the plan should be considered when determining the debtor’s projected disposable income at the outset, and then deal with the relevance of the applicable commitment period where the debtor has zero or negative disposable income as calculated by the means test. Read More
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Social Security Income May Not Be Considered in Good Faith Analysis
Posted by NCBRC - March 25th, 2013
The Ninth Circuit today held that “Congress’s adoption of the BAPCPA forecloses a court’s consideration of a debtor’s Social Security income or a debtor’s payments to secured creditors as part of the inquiry into good faith under 11 U.S.C. § 1325(a).” Drummond v. Welsh (In re Welsh), No. 12-60009 (9th Cir. March 25, 2013), aff’g Drummond v. Welsh (In re Welsh), 465 B.R. 843 (B.A.P. 9th Cir. 2012).
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Kagenveama Survives Direct Assault
Posted by NCBRC - September 7th, 2012
Wielding Hamilton v. Lanning, 130 S. Ct. 2464 (2010), the trustee in the Ninth Circuit case of In re Flores, launched a full-scale attack on Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008). Kagenveama won. The Ninth Circuit stood by its previous position that an above-median debtor with zero or negative disposable income does not need to confirm a 60 month plan under section 1325(b). Danielson v. Flores (In re Flores), No. 11-55452 (9th Cir. Aug. 31, 2012). NACBA assisted in drafting the debtor’s brief in this case. Read More
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Post-Petition 401(k) Contributions
Posted by NCBRC - August 8th, 2012
Two recent cases came out the wrong way on the issue of whether a debtor may deduct post-petition contributions to his 401(k) from calculation of disposable income. In re Parks, No. 11-1366 (B.A.P. 9th Cir. August 6, 2012), and In re Jenkins, No. 11-16960 (Bankr. E.D. Tenn. July 5, 2012). Read More
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Bad Faith Cannot Be Based on Income Determined in Compliance with Code
Posted by NCBRC - February 21st, 2012
The Ninth Circuit BAP found that a chapter 13 plan could not be determined to be in bad faith solely on the basis of debtors’ deduction of payments made on secured debts, without regard to “necessity” of those debts, and their exclusion of social security income from their calculation of disposable income. Drummond v. Welsh (In re Welsh), No. 10-1465 (B.A.P. 9th Cir. Feb. 17, 2012).
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Post-Petition Funds from 401(k) Loan Payoff May Not Be Voluntarily Contributed to Retirement Fund
Posted by NCBRC - February 17th, 2012
In an opinion that strains to uphold the conclusion that the “core purpose” of BACPA is to “maximize[e] creditor’s recover[y],” the Sixth Circuit has held that “post-petition income that becomes available to debtors after their 401(k) loans are fully repaid is ‘projected disposable income’ that must be turned over to the trustee for distribution to unsecured creditors pursuant to § 1325(b)(1)(B) and may not be used to fund voluntary 401(k) plans.” Seafort v. Burden, No. 10-6248 (6th Cir. Feb. 15, 2012). The debtor appealed the Bankruptcy Appellate Panel’s reversal of the Bankruptcy Court’s decision in debtor’s favor.
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Hamilton v. Lanning, No. 08-998 (USSCt)
Posted by NCBRC - August 30th, 2011
Type: Amicus
Date: December 28, 2009
Description: “Mechnical” vs. “forward-looking” approach to projected disposable income
Result: Affirmed. Debtor won. -
Ransom v. MBNA, No. 09-907 (USSCt.)
Posted by NCBRC - August 30th, 2011
Type: Amicus
Date: March 3, 2008
Description: Vehicle expense deduction
Result: Judgment affirmed – debtor lost
Ransom SCtOpinion
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