.jpg)
After Lanning, the same problems remain using PDI in 1325(b)(1).
I'm fighting a "good faith" objection in Eastern District on the same facts. Way under median debtor, extremely tight budget, 1% plan and nothing for clothing, lien strip. I see nothing in the code that prevents this, and the overcoming the "good faith" issue is not easy, if the judge is not so inclined.
_____
The post was migrated from Yahoo.
Had the confirmation hearing this morning in SV. At check in Trustee
dropped making an issue of lines 47-50 on form B22c for pdi purposes
and I certainaly was not going to raise the issue. Plan was confirmed
at 36 months for above median debtor. Always better to be prepared
for a battle and not have to fight it than the opposite.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868
On Tue 12/10/10 8:57 AM , P L petermlively2000@yahoo.com sent:
I think we can all agree that removing B22C lines 47-50
(reduction of CMI for admin, secured, and priority) to derive B22C PDI
is akin to removing the eggs, sugar and vanilla from the recipe and
calling it cake batter. Lanning doesn't instruct that formula for
PDI and I'm not aware of any other authority supporting same.
Peter M. Lively, JD/MBA
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
A-Bankruptcy-Attorney.com
Personal Financial Law Center II - Costa Mesa, CA
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR
ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS
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FROM: Nancy Clark
TO: cdcbaa@yahoogroups.com
SENT: Mon, October 11, 2010 3:45:10 PM
SUBJECT: RE: [cdcbaa] Re: After Lanning, the same problems remain
using PDI in 1325(b)(1).
Just as a note of interest:
The jury is still out as to whether Lanning overrules Kagenveama on
the Applicable Commitment Period (ACP). I am not sure how Liz Rojas is
handling this issue but Rod Danielsons office and Kathy Dockeryoffice are fighting the ACP as decided in Kagenveama. And I know that
is now what your thread was addressing directly but just as a heads
up to the group our office has taken this issue on with the help of
Tara Twomey of NACBA (6:10-bk-29956) in Riverside . The trustee is
arguing that Lanning and Tennyson have effectively overruled the
holding in Kagenveama as it relates to the applicable commitment
period, and we are arguing that Lanning did not discuss applicable
commitment period. Therefore, Kagenveama as it relates to ACP has not
been overruled.
Thank you,
_Nancy B. Clark_
__
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
Office: (626) 332-8600
Fax: (626) 332-8644
Privileged/Confidential Information may be contained in this
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FROM: cdcbaa@yahoogroups.com [mailto: cdcbaa@yahoogroups.com ] ON
BEHALF OF P L
SENT: Monday, October 11, 2010 12:48 PM
TO: cdcbaa@yahoogroups.com
SUBJECT: Re: [cdcbaa] Re: After Lanning, the same problems remain
using PDI in 1325(b)(1).
Mark,
The problem is that B22C calculates a payment to general
unsecured creditors not a Plan payment. The Ch13 T has it wrong.
Lanning only instructs to adjust the B22C PDI with foreseeable changes
in Income and Expenses, this may impact the PDI number being more or
less than $0 and therefore impact the plan length pursuant to
Kagenveama. As a practical matter only (not a confirmation
requirement), the plan payment will be I-J, after a plan length is
determine by B22C.
Peter
Peter M. Lively, JD/MBA
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Blvd, Suite 203 , Culver City , CA 90230-4647
Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
A-Bankruptcy-Attorney.com [1]
Personal Financial Law Center II - Costa Mesa , CA
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR
ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS
PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE
LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR
THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE
INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION,
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IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US
IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
FROM: Mark Jessee
TO: cdcbaa@yahoogroups.com
SENT: Sat, October 9, 2010 3:46:36 PM
SUBJECT: [cdcbaa] Re: After Lanning, the same problems remain using
PDI in 1325(b)(1).
I did not fully grasp this string the first time I read it. Now
after hours of research I understand the issue of section 1325(1)(B)'s
incongruent interplay with sections 1325(b)(2) and 1325(b)(3).
However, I still struggle with accepting the (SV) Chapter 13 trustee
argument that lines 48, 49, and 50 should always be left blank on form
B22C for an above median debtor in determining the disposable monthly
income. I had another above median case with the same trustee this
past week where form B22C was negative even without the expenses on
lines 48 through 50. After initially balking at the expenses on lines
48-50 the trustee dropped her argument that the plan had to be 60
months instead of 36 when I argued that dmi was still negative
regardless of those lines and that based upon Kagenveama the plan did
not need to be 60 months. Plan was confirmed at schedule I minus J for
36 months.
In my review of case law I am not finding anything that specifically
addresses this issue. In Re Martinez 418 B.R. 347 (9th Cir BAP) 2009
holds that entirely undersecured trust deeds that are lien stripped
cannot be claimed, because they are a phantom expenses not actually an
expense necessary for the support of the debtor or his dependants.
This was based upon the Ninth Circuit's Ransom, 577 F.3d 1026 decision
holding that in order to claim a vehicle ownership expense on B22C,
there had to actually be one. The U.S. Supreme Court in Lanning, does
not really address this issue, nor in my view does it completely
overturn Kagenveama. Kagenveama's mechanical approach is still where
we start, but in unusual circumstances can adjust projected disposable
income for one time circumstances like Lanning's lump sum severance
payment. The BAP in Martinez points out that Kagenveama did not really
delve into what were legitimate expenses necessary for support
although in reviewing Kagenveama's form B22C, clearly lines 48-50 were
necessary to for the resultant dmi calculation to be negative.
I understand that necessary expenses for secured arrears listed on
line 48, back due priority taxes on line 49 and trustee fees on line
50 are all paid through the plan and the debtor cannot count them
twice in determining the amount of the plan payment. To me it seems it
would not be good faith for a debtor to propose such a plan. However,
I do not see how 1328(b)(3) requires them to be backed out on form
B22C to determine pdi such that it is a 60 month plan instead of 36
months. Section 1325(b)(3) holds that determining dmi for an above
median debtor is based upon Section 707(b)(2)(A) & (B) plus section
1325(b)(2)(A)(ii). Section 707(b)(2)A(ii)(III) allows for
administrative expenses. Section 707(b)(2)A(iii)(II) clearly
incorporates necessary secured creditor payments for home and car
arrears. Section 707(b)(2)A(iv) clearly includes payments on priority
claims. Under the plain language of the statute these expenses are
part of determining dmi. There is nothing in the statute that says if
these expenses exist they must be backed out for determining dmi under
Section 1325(b)(3). Unlike claiming car ownership expenses or mortgage
payments on lien stripped second trust deeds that do not exist, these
are actual expenses that exist and must be paid by the debtors. Just
because these are paid through the plan instead of directly by the
debtor it should not change the analysis under Section 1325(b)(3). If
it is a negative number, Kagenveama's analysis that it does not need
to be a 60 month plan should apply. Following the plain language of
1325(b)(3) does not seem to lead to an absurd result.
Can anyone direct me to case law authority which address these
arguments?
Mark Jessee
--- In cdcbaa@yahoogroups.com [2], "James T. King" wrote:
>
> AMI Above Median Income
>
> PDI Projected Disposable Income
>
> BMI Below Median Income
>
> PDI Projected Disposable Income
>
> Thanks for asking. I am sure a lot did not know or figure it out.
>
>
>
[4]] On Behalf Of robert90701@...
> Sent: Tuesday, July 13, 2010 12:48 PM
> To: cdcbaa@yahoogroups.com [5]
> Subject: Re: [cdcbaa] After Lanning, the same problems remain
using PDI in 1325(b)(1).
>
>
>
>
>
> Please, what is AMI PDI and BMI PDI?
>
>
>
> In a message dated 7/13/2010 8:58:18 A.M. Pacific Daylight Time,
petermlively2000@... writes:
>
>
>
> Lanning adjustment of AMI PDI doesn't solve the problem that AMI
PDI is a measure of only general unsecured creditor value and BMI PDI
is a measure of Plan Base. The only way to make 1325(b)(1)(B) function
is a non-aburd way is to treat PDI as a Plan Base measure for both AMI
& BMI. Otherwise, unsecured creditors must be fully paid before any
other plan use for BMI debtors.
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203 , Culver City , CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy-Attorney.com [6]
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR
ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS
PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE
LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR
THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE
INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION,
DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED.
IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US
IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
>
>
>
>
>
> ________________________________
>
>
> To: cdcbaa@yahoogroups.com [7]
> Sent: Tue, July 13, 2010 8:12:05 AM
> Subject: RE: [cdcbaa] After Lanning, the same problems remain
using PDI in 1325(b)(1).
>
>
>
> But didnt Lanning say that in the AMI cases you only
abandon the B22 if there are unusual circumstances looking forward?
Not USUAL!
>
>
>
>
>
Behalf Of P L
> Sent: Tuesday, July 13, 2010 8:01 AM
> To: cdcbaa@yahoogroups. com
> Subject: Re: [cdcbaa] After Lanning, the same problems remain
using PDI in 1325(b)(1).
>
>
>
> My understanding is that the Chapter 13 Trustees and judges are
using PDI as a measure of ability to pay or a plan payment, not a
measure of what goes to the unsecured creditors. Above-median- income
debtors (arguably Chapter 13 only) start with Form B22C Disposable
Income, but abandon that number and use Schedule I - J.
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203 , Culver City , CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy- Attorney. com
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR
ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS
PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE
LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR
THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE
INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION,
DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED.
IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US
IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
>
>
>
>
>
> ________________________________
>
>
> To: cdcbaa@yahoogroups. com
> Sent: Mon, July 12, 2010 4:57:50 PM
> Subject: Re: [cdcbaa] After Lanning, the same problems remain
using PDI in 1325(b)(1).
>
>
>
> This stuff is really hard.
>
>
>
> So in my above-median income debtor, I still need to use the PDI
on Form 22C as the minimum that the unsecureds will get, and my debtor
will have to pay above and beyond that in order to pay down mortgage
arrears. In other words, we are still filling up the champagne glasses
from the bottom up, or no?
>
>
>
> Holly Roark
>
> CDCA
>
> holly@roarklawoffic es.com [8]
>
> On Mon, Jul 12, 2010 at 12:35 PM, P L
yahoo.com > wrote:
>
> PDI under 1325(b)(2) used in Chapter 11 and for below-median-
income Chapter 13 debtor follows the preBAPCPA concept of calculating
a plan payment; defining Disposable Income as reducing income by
household/living expenses only. 1325(b)(2) does not reduce CMI by
administrative, secured arrears and priority unsecured claims (other
typical plan payment recipients). This "Disposable Income" is a
measure of what plan payment a debtor can afford.
>
>
>
> PDI under the Chapter 7 Means Test and under 1325(b)(3) with
reference to 707(b)(2) defines Disposable Income as reducing CMI by
household/living expenses (albeit standardized) and also by secured
arrears and priority unsecured claims. This "Disposable Income" is a
measure of what [general] unsecured creditors should receive.
>
>
>
> Unfortunately, defining Disposable Income in two entirely
different ways and requiring its use in one 1325(b)(1)(B) formula
doesn't work.
>
>
>
> BAPCPA changed 1325(b)(1)(B) by inserting "to unsecured creditors"
between "will be applied to make payment" and "under the plan" with
the obvious intention that [general] unsecured creditors receive the
PDI; Disposable Income being calculated under 1325(b)(3) and
707(b)(2).
>
>
>
> BAPCPA neglected to change the definition of Disposable Income
calculated under 1325(b)(2) to include reductions of CMI by
administrative expenses, secured arrears and priority unsecured
claims. The absurd result of using this PDI in 1325(b)(1)(B) being
that below-median- income debtors must pay all that they can afford to
[general] unsecured creditors before any PDI can be used for other
plan purposes.
>
>
>
> Alternatively, ignoring the addition of "to unsecured creditors"
between "will be applied to make payment" and "under the plan" and
interpreting PDI as a measure of what a debtor can afford to pay makes
1325(b)(3) superflous.
>
>
>
> Lanning's instructions to adjust PDI by foreseeable changes in
income and expenses does not resolve the problem that the statute
defines Disposable Income in two incompatible ways for use in the same
test.
>
>
>
> Kagenveama (and the dissent in Lanning) got it right when focusing
on 1325(b)(1)(B) using 1325(b)(3) as a calculation of what [general]
unsecured creditors should get, if anything. Kagenveama is still
applicable post Lanning, if 1325(b)(1)(B) PDI goes to only [general]
unsecured creditors.
>
>
>
> The courts using PDI under 1325(b)(1)(B) with Disposable Income
being calculated under 1325(b)(2) as a measure of what total monthly
amount debtor can afford to pay also got it right. However, when
applying this approach and using Disposable Income calculated under
1325(b)(3), these courts must ignore that BAPCPA's added the phrase
"to unsecured creditors" to 1325(b)(1)(B) and must also adjust
Disposable Income from a calculation of what [general] unsecured
creditors should receive, to become a measure of ability to pay; this
usually means ignoring Form B22C's Disposable Income and using
Schedule I - J in its place.
>
>
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203 , Culver City , CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy- Attorney. com
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR
ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS
PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE
LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR
THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE
INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION,
DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED.
IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US
IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
>
>
>
>
>
> --
> Holly Roark
> holly@roarklawoffic es.com
> www.roarklawoffices .com
> Central District of California
> Consumer Bankruptcy Attorney
>
Links:
[1] http://a-bankruptcy-attorney.com/
[2] mailto:cdcbaa@yahoogroups.com
[3] mailto:cdcbaa@yahoogroups.com
[4] mailto:cdcbaa@yahoogroups.com
[5] mailto:cdcbaa@yahoogroups.com
[6] http://a-bankruptcy-attorney.com/
[7] mailto:cdcbaa@yahoogroups.com
[8] http://es.com/
Had the confirmation hearing this morning in SV. At check in Trustee dropped making an issue of lines 47-50 on form B22c for pdi purposes and I certainaly was not going to raise the issue. Plan was confirmed at 36 months for above median debtor. Always better to be prepared for a battle and not have to fight it than the opposite.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868
On Tue 12/10/10 8:57 AM , P L petermlively2000@yahoo.com sent:
I think we can all agree that removing B22C lines 47-50 (reduction of CMI for admin, secured, and priority) to derive B22C PDI is akin to removing the eggs, sugar and vanilla from the recipe and calling it cake batter.
Lanning doesn't instruct that formula for PDI and I'm not aware of any other authority supporting same.
Peter M. Lively, JD/MBA
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
A-Bankruptcy-Attorney.com
Personal Financial Law Center II - Costa Mesa, CA
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
From: Nancy Clark
To: cdcbaa@yahoogroups.com
Sent: Mon, October 11, 2010 3:45:10 PM
Subject: RE: [cdcbaa] Re: After Lanning, the same problems remain using PDI in 1325(b)(1).
Just as a note of interest:
The jury is still out as to whether Lanning overrules Kagenveama on the Applicable Commitment Period (ACP). I am not sure how Liz Rojas is handling this issue but Rod Danielsons office and Kathy Dockery that is now what your thread was addressing directly but just as a he help of Tara Twomey of NACBA (6:10-bk-29956) in Riverside . The trustee is arguing that Lanning and Tennyson have effectively overruled the holding in Kagenveama as it relates to the applicable commitment period, and we are arguing that Lanning did not discuss applicable commitment period. Therefore, Kagenveama as it relates to ACP has not been overruled.
Thank you,
Nancy B. Clark
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
Office: (626) 332-8600
Fax: (626) 332-8644
Privileged/Confidential Information may be contained in this message. If you are not the addressee indicated in this message (or responsible for delivery of the message to such person), you may not copy or deliver this message to anyone. In such case, you should destroy this message and kindly notify the sender by reply email. Please advise immediately if you or your employer does not consent to Internet email for messages of this kind. Opinions, conclusions and other information in this message that do not relate to the official business of my firm shall be understood as neither given nor endorsed by it.
IRS Circular 230 Disclosure: To ensure compliance with Treasury Department Regulations, we advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication was
not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions or (ii) promoting, marketing or recommending to another party any tax-related matter addressed herein.
From: cdcbaa@yahoogroups.com [mailto: cdcbaa@yahoogroups.com ] On Behalf Of P L
Sent: Monday, October 11, 2010 12:48 PM
To: cdcbaa@yahoogroups.com
Subject: Re: [cdcbaa] Re: After Lanning, the same problems remain using PDI in 1325(b)(1).
Mark,
The problem is that B22C calculates a payment to general unsecured creditors not a Plan payment. The Ch13 T has it wrong. Lanning only instructs to adjust the B22C PDI with foreseeable changes in Income and Expenses, this may impact the PDI number being more or less than $0 and therefore impact the plan length pursuant to Kagenveama. As a practical matter only (not a confirmation requirement), the plan payment will be I-J, after a plan length is determine by B22C.
Peter
Peter M. Lively, JD/MBA
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Blvd, Suite 203 , Culver City , CA 90230-4647
Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
A-Bankruptcy-Attorney.com
Personal Financial Law Center II - Costa Mesa , CA
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
From: Mark Jessee
To: cdcbaa@yahoogroups.com
Sent: Sat, October 9, 2010 3:46:36 PM
Subject: [cdcbaa] Re: After Lanning, the same problems remain using PDI in 1325(b)(1).
I did not fully grasp this string the first time I read it. Now after hours of research I understand the issue of section 1325(1)(B)'s incongruent interplay with sections 1325(b)(2) and 1325(b)(3). However, I still struggle with accepting the (SV) Chapter 13 trustee argument that lines 48, 49, and 50 should always be left blank on form B22C for an above median debtor in determining the disposable monthly income. I had another above median case with the same trustee this past week where form B22C was negative even without the expenses on lines 48 through 50. After initially balking at the expenses on lines 48-50 the trustee dropped her argument that the plan had to be 60 months instead of 36 when I argued that dmi was still negative regardless of those lines and that based upon Kagenveama the plan did not need to be 60 months. Plan was confirmed at schedule I minus J for 36 months.
In my review of case law I am not finding anything that specifically addresses this issue. In Re Martinez 418 B.R. 347 (9th Cir BAP) 2009 holds that entirely undersecured trust deeds that are lien stripped cannot be claimed, because they are a phantom expenses not actually an expense necessary for the support of the debtor or his dependants. This was based upon the Ninth Circuit's Ransom, 577 F.3d 1026 decision holding that in order to claim a vehicle ownership expense on B22C, there had to actually be one. The U.S. Supreme Court in Lanning, does not really address this issue, nor in my view does it completely overturn Kagenveama. Kagenveama's mechanical approach is still where we start, but in unusual circumstances can adjust projected disposable income for one time circumstances like Lanning's lump sum severance payment. The BAP in Martinez points out that Kagenveama did not really delve into what were legitimate expenses necessary for support although in reviewing Kagenveama's form B22C, clearly lines 48-50 were necessary to for the resultant dmi calculation to be negative.
I understand that necessary expenses for secured arrears listed on line 48, back due priority taxes on line 49 and trustee fees on line 50 are all paid through the plan and the debtor cannot count them twice in determining the amount of the plan payment. To me it seems it would not be good faith for a debtor to propose such a plan. However, I do not see how 1328(b)(3) requires them to be backed out on form B22C to determine pdi such that it is a 60 month plan instead of 36 months. Section 1325(b)(3) holds that determining dmi for an above median debtor is based upon Section 707(b)(2)(A) & (B) plus section 1325(b)(2)(A)(ii). Section 707(b)(2)A(ii)(III) allows for administrative expenses. Section 707(b)(2)A(iii)(II) clearly incorporates necessary secured creditor payments for home and car arrears. Section 707(b)(2)A(iv) clearly includes payments on priority claims. Under the plain language of the statute these expenses are part of determining dmi. There is nothing in the statute that says if these expenses exist they must be backed out for determining dmi under Section 1325(b)(3). Unlike claiming car ownership expenses or mortgage payments on lien stripped second trust deeds that do not exist, these are actual expenses that exist and must be paid by the debtors. Just because these are paid through the plan instead of directly by the debtor it should not change the analysis under Section 1325(b)(3). If it is a negative number, Kagenveama's analysis that it does not need to be a 60 month plan should apply. Following the plain language of 1325(b)(3) does not seem to lead to an absurd result.
Can anyone direct me to case law authority which address these arguments?
Mark Jessee
, "James T. King" wrote:
>
> AMI Above Median Income
>
> PDI Projected Disposable Income
>
> BMI Below Median Income
>
> PDI Projected Disposable Income
>
> Thanks for asking. I am sure a lot did not know or figure it out.
>
>
>
ups.com [mailto:cdcbaa@yahoogroups.com] On Behalf Of robert90701@...
> Sent: Tuesday, July 13, 2010 12:48 PM
> To: cdcbaa@yahoogroups.com
> Subject: Re: [cdcbaa] After Lanning, the same problems remain using PDI in 1325(b)(1).
>
>
>
>
>
> Please, what is AMI PDI and BMI PDI?
>
>
>
> In a message dated 7/13/2010 8:58:18 A.M. Pacific Daylight Time, petermlively2000@... writes:
>
>
>
> Lanning adjustment of AMI PDI doesn't solve the problem that AMI PDI is a measure of only general unsecured creditor value and BMI PDI is a measure of Plan Base. The only way to make 1325(b)(1)(B) function is a non-aburd way is to treat PDI as a Plan Base measure for both AMI & BMI. Otherwise, unsecured creditors must be fully paid before any other plan use for BMI debtors.
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203 , Culver City , CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy-Attorney.com
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
>
>
>
>
>
> ________________________________
>
>
> To: cdcbaa@yahoogroups.com
> Sent: Tue, July 13, 2010 8:12:05 AM
> Subject: RE: [cdcbaa] After Lanning, the same problems remain using PDI in 1325(b)(1).
>
>
>
> But didnt Lanning say that in the AMI cases you only abandon the B22 if there are unusual circumstances looking forward? Not USUAL!
>
>
>
>
>
On Behalf Of P L
> Sent: Tuesday, July 13, 2010 8:01 AM
> To: cdcbaa@yahoogroups. com
> Subject: Re: [cdcbaa] After Lanning, the same problems remain using PDI in 1325(b)(1).
>
>
>
> My understanding is that the Chapter 13 Trustees and judges are using PDI as a measure of ability to pay or a plan payment, not a measure of what goes to the unsecured creditors. Above-median- income debtors (arguably Chapter 13 only) start with Form B22C Disposable Income, but abandon that number and use Schedule I - J.
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203 , Culver City , CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy- Attorney. com
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
>
>
>
>
>
> ________________________________
>
>
low" href"http://gmail.com/" gmail.com >
> To: cdcbaa@yahoogroups. com
> Sent: Mon, July 12, 2010 4:57:50 PM
> Subject: Re: [cdcbaa] After Lanning, the same problems remain using PDI in 1325(b)(1).
>
>
>
> This stuff is really hard.
>
>
>
> So in my above-median income debtor, I still need to use the PDI on Form 22C as the minimum that the unsecureds will get, and my debtor will have to pay above and beyond that in order to pay down mortgage arrears. In other words, we are still filling up the champagne glasses from the bottom up, or no?
>
>
>
> Holly Roark
>
> CDCA
>
> holly@roarklawoffic es.com
>
> On Mon, Jul 12, 2010 at 12:35 PM, P L > wrote:
>
> PDI under 1325(b)(2) used in Chapter 11 and for below-median- income Chapter 13 debtor follows the preBAPCPA concept of calculating a plan payment; defining Disposable Income as reducing income by household/living expenses only. 1325(b)(2) does not reduce CMI by administrative, secured arrears and priority unsecured claims (other typical plan payment recipients). This "Disposable Income" is a measure of what plan payment a debtor can afford.
>
>
>
> PDI under the Chapter 7 Means Test and under 1325(b)(3) with reference to 707(b)(2) defines Disposable Income as reducing CMI by household/living expenses (albeit standardized) and also by secured arrears and priority unsecured claims. This "Disposable Income" is a measure of what [general] unsecured creditors should receive.
>
>
>
> Unfortunately, defining Disposable Income in two entirely different ways and requiring its use in one 1325(b)(1)(B) formula doesn't work.
>
>
>
> BAPCPA changed 1325(b)(1)(B) by inserting "to unsecured creditors" between "will be applied to make payment" and "under the plan" with the obvious intention that [general] unsecured creditors receive the PDI; Disposable Income being calculated under 1325(b)(3) and 707(b)(2).
>
>
>
> BAPCPA neglected to change the definition of Disposable Income calculated under 1325(b)(2) to include reductions of CMI by administrative expenses, secured arrears and priority unsecured claims. The absurd result of using this PDI in 1325(b)(1)(B) being that below-median- income debtors must pay all that they can afford to [general] unsecured creditors before any PDI can be used for other plan purposes.
>
>
>
> Alternatively, ignoring the addition of "to unsecured creditors" between "will be applied to make payment" and "under the plan" and interpreting PDI as a measure of what a debtor can afford to pay makes 1325(b)(3) superflous.
>
>
>
> Lanning's instructions to adjust PDI by foreseeable changes in income and expenses does not resolve the problem that the statute defines Disposable Income in two incompatible ways for use in the same test.
>
>
>
> Kagenveama (and the dissent in Lanning) got it right when focusing on 1325(b)(1)(B) using 1325(b)(3) as a calculation of what [general] unsecured creditors should get, if anything. Kagenveama is still applicable post Lanning, if 1325(b)(1)(B) PDI goes to only [general] unsecured creditors.
>
>
>
> The courts using PDI under 1325(b)(1)(B) with Disposable Income being calculated under 1325(b)(2) as a measure of what total monthly amount debtor can afford to pay also got it right. However, when applying this approach and using Disposable Income calculated under 1325(b)(3), these courts must ignore that BAPCPA's added the phrase "to unsecured creditors" to 1325(b)(1)(B) and must also adjust Disposable Income from a calculation of what [general] unsecured creditors should receive, to become a measure of ability to pay; this usually means ignoring Form B22C's Disposable Income and using Schedule I - J in its place.
>
>
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203 , Culver City , CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy- Attorney. com
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
>
>
>
>
>
> --
> Holly Roark
> holly@roarklawoffic es.com
> www.roarklawoffices .com
> Central District of California
> Consumer Bankruptcy Attorney
>
The post was migrated from Yahoo.
Thanks Peter and for the earlier analysis as well as it helped me put
the pieces together. I just wish I could find a case that is on
point saying that expenses contained on lines 48-50 are applicable in
determining PDI on form B22C.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868
On Mon 11/10/10 12:48 PM , P L petermlively2000@yahoo.com sent:
Mark, The problem is that B22C calculates a payment to
general unsecured creditors not a Plan payment. The Ch13 T has it
wrong. Lanning only instructs to adjust the B22C PDI with foreseeable
changes in Income and Expenses, this may impact the PDI number being
more or less than $0 and therefore impact the plan length pursuant to
Kagenveama. As a practical matter only (not a confirmation
requirement), the plan payment will be I-J, after a plan length is
determine by B22C. Peter
Peter M. Lively, JD/MBA
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
A-Bankruptcy-Attorney.com
Personal Financial Law Center II - Costa Mesa, CA
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR
ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS
PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE
LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR
THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE
INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION,
DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED.
IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US
IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
FROM: Mark Jessee
TO: cdcbaa@yahoogroups.com
SENT: Sat, October 9, 2010 3:46:36 PM
SUBJECT: [cdcbaa] Re: After Lanning, the same problems remain using
PDI in 1325(b)(1).
I did not fully grasp this string the first time I read it. Now
after hours of research I understand the issue of section 1325(1)(B)'s
incongruent interplay with sections 1325(b)(2) and 1325(b)(3).
However, I still struggle with accepting the (SV) Chapter 13 trustee
argument that lines 48, 49, and 50 should always be left blank on form
B22C for an above median debtor in determining the disposable monthly
income. I had another above median case with the same trustee this
past week where form B22C was negative even without the expenses on
lines 48 through 50. After initially balking at the expenses on lines
48-50 the trustee dropped her argument that the plan had to be 60
months instead of 36 when I argued that dmi was still negative
regardless of those lines and that based upon Kagenveama the plan did
not need to be 60 months. Plan was confirmed at schedule I minus J for
36 months.
In my review of case law I am not finding anything that specifically
addresses this issue. In Re Martinez 418 B.R. 347 (9th Cir BAP) 2009
holds that entirely undersecured trust deeds that are lien stripped
cannot be claimed, because they are a phantom expenses not actually an
expense necessary for the support of the debtor or his dependants.
This was based upon the Ninth Circuit's Ransom, 577 F.3d 1026 decision
holding that in order to claim a vehicle ownership expense on B22C,
there had to actually be one. The U.S. Supreme Court in Lanning, does
not really address this issue, nor in my view does it completely
overturn Kagenveama. Kagenveama's mechanical approach is still where
we start, but in unusual circumstances can adjust projected disposable
income for one time circumstances like Lanning's lump sum severance
payment. The BAP in Martinez points out that Kagenveama did not really
delve into what were legitimate expenses necessary for support
although in reviewing Kagenveama's form B22C, clearly lines 48-50 were
necessary to for the resultant dmi calculation to be negative.
I understand that necessary expenses for secured arrears listed on
line 48, back due priority taxes on line 49 and trustee fees on line
50 are all paid through the plan and the debtor cannot count them
twice in determining the amount of the plan payment. To me it seems it
would not be good faith for a debtor to propose such a plan. However,
I do not see how 1328(b)(3) requires them to be backed out on form
B22C to determine pdi such that it is a 60 month plan instead of 36
months. Section 1325(b)(3) holds that determining dmi for an above
median debtor is based upon Section 707(b)(2)(A) & (B) plus section
1325(b)(2)(A)(ii). Section 707(b)(2)A(ii)(III) allows for
administrative expenses. Section 707(b)(2)A(iii)(II) clearly
incorporates necessary secured creditor payments for home and car
arrears. Section 707(b)(2)A(iv) clearly includes payments on priority
claims. Under the plain language of the statute these expenses are
part of determining dmi. There is nothing in the statute that says if
these expenses exist they must be backed out for determining dmi under
Section 1325(b)(3). Unlike claiming car ownership expenses or mortgage
payments on lien stripped second trust deeds that do not exist, these
are actual expenses that exist and must be paid by the debtors. Just
because these are paid through the plan instead of directly by the
debtor it should not change the analysis under Section 1325(b)(3). If
it is a negative number, Kagenveama's analysis that it does not need
to be a 60 month plan should apply. Following the plain language of
1325(b)(3) does not seem to lead to an absurd result.
Can anyone direct me to case law authority which address these
arguments?
Mark Jessee
--- In cdcbaa@yahoogroups.com [1], "James T. King" wrote:
>
> AMI Above Median Income
>
> PDI Projected Disposable Income
>
> BMI Below Median Income
>
> PDI Projected Disposable Income
>
> Thanks for asking. I am sure a lot did not know or figure it out.
>
>
>
[3]] On Behalf Of robert90701@...
> Sent: Tuesday, July 13, 2010 12:48 PM
> To: cdcbaa@yahoogroups.com [4]
> Subject: Re: [cdcbaa] After Lanning, the same problems remain
using PDI in 1325(b)(1).
>
>
>
>
>
> Please, what is AMI PDI and BMI PDI?
>
>
>
> In a message dated 7/13/2010 8:58:18 A.M. Pacific Daylight Time,
petermlively2000@... writes:
>
>
>
> Lanning adjustment of AMI PDI doesn't solve the problem that AMI
PDI is a measure of only general unsecured creditor value and BMI PDI
is a measure of Plan Base. The only way to make 1325(b)(1)(B) function
is a non-aburd way is to treat PDI as a Plan Base measure for both AMI
& BMI. Otherwise, unsecured creditors must be fully paid before any
other plan use for BMI debtors.
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy-Attorney.com [5]
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR
ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS
PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE
LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR
THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE
INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION,
DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED.
IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US
IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
>
>
>
>
>
> ________________________________
>
>
> To: cdcbaa@yahoogroups.com [6]
> Sent: Tue, July 13, 2010 8:12:05 AM
> Subject: RE: [cdcbaa] After Lanning, the same problems remain
using PDI in 1325(b)(1).
>
>
>
> But didnt Lanning say that in the AMI cases you only
abandon the B22 if there are unusual circumstances looking forward?
Not USUAL!
>
>
>
>
>
Behalf Of P L
> Sent: Tuesday, July 13, 2010 8:01 AM
> To: cdcbaa@yahoogroups. com
> Subject: Re: [cdcbaa] After Lanning, the same problems remain
using PDI in 1325(b)(1).
>
>
>
> My understanding is that the Chapter 13 Trustees and judges are
using PDI as a measure of ability to pay or a plan payment, not a
measure of what goes to the unsecured creditors. Above-median- income
debtors (arguably Chapter 13 only) start with Form B22C Disposable
Income, but abandon that number and use Schedule I - J.
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy- Attorney. com
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR
ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS
PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE
LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR
THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE
INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION,
DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED.
IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US
IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
>
>
>
>
>
> ________________________________
>
>
> To: cdcbaa@yahoogroups. com
> Sent: Mon, July 12, 2010 4:57:50 PM
> Subject: Re: [cdcbaa] After Lanning, the same problems remain
using PDI in 1325(b)(1).
>
>
>
> This stuff is really hard.
>
>
>
> So in my above-median income debtor, I still need to use the PDI
on Form 22C as the minimum that the unsecureds will get, and my debtor
will have to pay above and beyond that in order to pay down mortgage
arrears. In other words, we are still filling up the champagne glasses
from the bottom up, or no?
>
>
>
> Holly Roark
>
> CDCA
>
> holly@roarklawoffic es.com [7]
>
> On Mon, Jul 12, 2010 at 12:35 PM, P L
yahoo.com > wrote:
>
> PDI under 1325(b)(2) used in Chapter 11 and for below-median-
income Chapter 13 debtor follows the preBAPCPA concept of calculating
a plan payment; defining Disposable Income as reducing income by
household/living expenses only. 1325(b)(2) does not reduce CMI by
administrative, secured arrears and priority unsecured claims (other
typical plan payment recipients). This "Disposable Income" is a
measure of what plan payment a debtor can afford.
>
>
>
> PDI under the Chapter 7 Means Test and under 1325(b)(3) with
reference to 707(b)(2) defines Disposable Income as reducing CMI by
household/living expenses (albeit standardized) and also by secured
arrears and priority unsecured claims. This "Disposable Income" is a
measure of what [general] unsecured creditors should receive.
>
>
>
> Unfortunately, defining Disposable Income in two entirely
different ways and requiring its use in one 1325(b)(1)(B) formula
doesn't work.
>
>
>
> BAPCPA changed 1325(b)(1)(B) by inserting "to unsecured creditors"
between "will be applied to make payment" and "under the plan" with
the obvious intention that [general] unsecured creditors receive the
PDI; Disposable Income being calculated under 1325(b)(3) and
707(b)(2).
>
>
>
> BAPCPA neglected to change the definition of Disposable Income
calculated under 1325(b)(2) to include reductions of CMI by
administrative expenses, secured arrears and priority unsecured
claims. The absurd result of using this PDI in 1325(b)(1)(B) being
that below-median- income debtors must pay all that they can afford to
[general] unsecured creditors before any PDI can be used for other
plan purposes.
>
>
>
> Alternatively, ignoring the addition of "to unsecured creditors"
between "will be applied to make payment" and "under the plan" and
interpreting PDI as a measure of what a debtor can afford to pay makes
1325(b)(3) superflous.
>
>
>
> Lanning's instructions to adjust PDI by foreseeable changes in
income and expenses does not resolve the problem that the statute
defines Disposable Income in two incompatible ways for use in the same
test.
>
>
>
> Kagenveama (and the dissent in Lanning) got it right when focusing
on 1325(b)(1)(B) using 1325(b)(3) as a calculation of what [general]
unsecured creditors should get, if anything. Kagenveama is still
applicable post Lanning, if 1325(b)(1)(B) PDI goes to only [general]
unsecured creditors.
>
>
>
> The courts using PDI under 1325(b)(1)(B) with Disposable Income
being calculated under 1325(b)(2) as a measure of what total monthly
amount debtor can afford to pay also got it right. However, when
applying this approach and using Disposable Income calculated under
1325(b)(3), these courts must ignore that BAPCPA's added the phrase
"to unsecured creditors" to 1325(b)(1)(B) and must also adjust
Disposable Income from a calculation of what [general] unsecured
creditors should receive, to become a measure of ability to pay; this
usually means ignoring Form B22C's Disposable Income and using
Schedule I - J in its place.
>
>
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy- Attorney. com
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR
ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS
PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE
LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR
THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE
INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION,
DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED.
IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US
IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
>
>
>
>
>
> --
> Holly Roark
> holly@roarklawoffic es.com
> www.roarklawoffices .com
> Central District of California
> Consumer Bankruptcy Attorney
>
Links:
[1] mailto:cdcbaa@yahoogroups.com
[2] mailto:cdcbaa@yahoogroups.com
[3] mailto:cdcbaa@yahoogroups.com
[4] mailto:cdcbaa@yahoogroups.com
[5] http://a-bankruptcy-attorney.com/
[6] mailto:cdcbaa@yahoogroups.com
[7] http://es.com/
[8] mailto:cdcbaa@yahoogroups.com?subjectRe: [cdcbaa] Re: After
Lanning, the same problems remain using PDI in 1325(b)(1).
[9]
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I did not fully grasp this string the first time I read it. Now after hours of research I understand the issue of section 1325(1)(B)'s incongruent interplay with sections 1325(b)(2) and 1325(b)(3). However, I still struggle with accepting the (SV) Chapter 13 trustee argument that lines 48, 49, and 50 should always be left blank on form B22C for an above median debtor in determining the disposable monthly income. I had another above median case with the same trustee this past week where form B22C was negative even without the expenses on lines 48 through 50. After initially balking at the expenses on lines 48-50 the trustee dropped her argument that the plan had to be 60 months instead of 36 when I argued that dmi was still negative regardless of those lines and that based upon Kagenveama the plan did not need to be 60 months. Plan was confirmed at schedule I minus J for 36 months.
In my review of case law I am not finding anything that specifically addresses this issue. In Re Martinez 418 B.R. 347 (9th Cir BAP) 2009 holds that entirely undersecured trust deeds that are lien stripped cannot be claimed, because they are a phantom expenses not actually an expense necessary for the support of the debtor or his dependants. This was based upon the Ninth Circuit's Ransom, 577 F.3d 1026 decision holding that in order to claim a vehicle ownership expense on B22C, there had to actually be one. The U.S. Supreme Court in Lanning, does not really address this issue, nor in my view does it completely overturn Kagenveama. Kagenveama's mechanical approach is still where we start, but in unusual circumstances can adjust projected disposable income for one time circumstances like Lanning's lump sum severance payment. The BAP in Martinez points out that Kagenveama did not really delve into what were legitimate expenses necessary for support although in reviewing Kagenveama's form B22C, clearly lines 48-50 were necessary to for the resultant dmi calculation to be negative.
I understand that necessary expenses for secured arrears listed on line 48, back due priority taxes on line 49 and trustee fees on line 50 are all paid through the plan and the debtor cannot count them twice in determining the amount of the plan payment. To me it seems it would not be good faith for a debtor to propose such a plan. However, I do not see how 1328(b)(3) requires them to be backed out on form B22C to determine pdi such that it is a 60 month plan instead of 36 months. Section 1325(b)(3) holds that determining dmi for an above median debtor is based upon Section 707(b)(2)(A) & (B) plus section 1325(b)(2)(A)(ii). Section 707(b)(2)A(ii)(III) allows for administrative expenses. Section 707(b)(2)A(iii)(II) clearly incorporates necessary secured creditor payments for home and car arrears. Section 707(b)(2)A(iv) clearly includes payments on priority claims. Under the plain language of the statute these expenses are part of determining dmi. There is nothing in the statute that says if these expenses exist they must be backed out for determining dmi under Section 1325(b)(3). Unlike claiming car ownership expenses or mortgage payments on lien stripped second trust deeds that do not exist, these are actual expenses that exist and must be paid by the debtors. Just because these are paid through the plan instead of directly by the debtor it should not change the analysis under Section 1325(b)(3). If it is a negative number, Kagenveama's analysis that it does not need to be a 60 month plan should apply. Following the plain language of 1325(b)(3) does not seem to lead to an absurd result.
Can anyone direct me to case law authority which address these arguments?
Mark Jessee
>
> AMI Above Median Income
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> PDI Projected Disposable Income
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> BMI Below Median Income
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> PDI Projected Disposable Income
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> Thanks for asking. I am sure a lot did not know or figure it out.
>
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>
robert90701@...
> Sent: Tuesday, July 13, 2010 12:48 PM
> To: cdcbaa@yahoogroups.com
> Subject: Re: [cdcbaa] After Lanning, the same problems remain using PDI in 1325(b)(1).
>
>
>
>
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> Please, what is AMI PDI and BMI PDI?
>
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> In a message dated 7/13/2010 8:58:18 A.M. Pacific Daylight Time, petermlively2000@... writes:
>
>
>
> Lanning adjustment of AMI PDI doesn't solve the problem that AMI PDI is a measure of only general unsecured creditor value and BMI PDI is a measure of Plan Base. The only way to make 1325(b)(1)(B) function is a non-aburd way is to treat PDI as a Plan Base measure for both AMI & BMI. Otherwise, unsecured creditors must be fully paid before any other plan use for BMI debtors.
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy-Attorney.com
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
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>
> ________________________________
>
>
> To: cdcbaa@yahoogroups.com
> Sent: Tue, July 13, 2010 8:12:05 AM
> Subject: RE: [cdcbaa] After Lanning, the same problems remain using PDI in 1325(b)(1).
>
>
>
> But didnt Lanning say that in the AMI cases you only abandon the B22 if there are unusual circumstances looking forward? Not USUAL!
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>
f Of P L
> Sent: Tuesday, July 13, 2010 8:01 AM
> To: cdcbaa@yahoogroups. com
> Subject: Re: [cdcbaa] After Lanning, the same problems remain using PDI in 1325(b)(1).
>
>
>
> My understanding is that the Chapter 13 Trustees and judges are using PDI as a measure of ability to pay or a plan payment, not a measure of what goes to the unsecured creditors. Above-median- income debtors (arguably Chapter 13 only) start with Form B22C Disposable Income, but abandon that number and use Schedule I - J.
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy- Attorney. com
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
>
>
>
>
>
> ________________________________
>
>
> To: cdcbaa@yahoogroups. com
> Sent: Mon, July 12, 2010 4:57:50 PM
> Subject: Re: [cdcbaa] After Lanning, the same problems remain using PDI in 1325(b)(1).
>
>
>
> This stuff is really hard.
>
>
>
> So in my above-median income debtor, I still need to use the PDI on Form 22C as the minimum that the unsecureds will get, and my debtor will have to pay above and beyond that in order to pay down mortgage arrears. In other words, we are still filling up the champagne glasses from the bottom up, or no?
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>
>
> Holly Roark
>
> CDCA
>
> holly@roarklawoffic es.com
>
> On Mon, Jul 12, 2010 at 12:35 PM, P L wrote:
>
> PDI under 1325(b)(2) used in Chapter 11 and for below-median- income Chapter 13 debtor follows the preBAPCPA concept of calculating a plan payment; defining Disposable Income as reducing income by household/living expenses only. 1325(b)(2) does not reduce CMI by administrative, secured arrears and priority unsecured claims (other typical plan payment recipients). This "Disposable Income" is a measure of what plan payment a debtor can afford.
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> PDI under the Chapter 7 Means Test and under 1325(b)(3) with reference to 707(b)(2) defines Disposable Income as reducing CMI by household/living expenses (albeit standardized) and also by secured arrears and priority unsecured claims. This "Disposable Income" is a measure of what [general] unsecured creditors should receive.
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> Unfortunately, defining Disposable Income in two entirely different ways and requiring its use in one 1325(b)(1)(B) formula doesn't work.
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> BAPCPA changed 1325(b)(1)(B) by inserting "to unsecured creditors" between "will be applied to make payment" and "under the plan" with the obvious intention that [general] unsecured creditors receive the PDI; Disposable Income being calculated under 1325(b)(3) and 707(b)(2).
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> BAPCPA neglected to change the definition of Disposable Income calculated under 1325(b)(2) to include reductions of CMI by administrative expenses, secured arrears and priority unsecured claims. The absurd result of using this PDI in 1325(b)(1)(B) being that below-median- income debtors must pay all that they can afford to [general] unsecured creditors before any PDI can be used for other plan purposes.
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> Alternatively, ignoring the addition of "to unsecured creditors" between "will be applied to make payment" and "under the plan" and interpreting PDI as a measure of what a debtor can afford to pay makes 1325(b)(3) superflous.
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> Lanning's instructions to adjust PDI by foreseeable changes in income and expenses does not resolve the problem that the statute defines Disposable Income in two incompatible ways for use in the same test.
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> Kagenveama (and the dissent in Lanning) got it right when focusing on 1325(b)(1)(B) using 1325(b)(3) as a calculation of what [general] unsecured creditors should get, if anything. Kagenveama is still applicable post Lanning, if 1325(b)(1)(B) PDI goes to only [general] unsecured creditors.
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> The courts using PDI under 1325(b)(1)(B) with Disposable Income being calculated under 1325(b)(2) as a measure of what total monthly amount debtor can afford to pay also got it right. However, when applying this approach and using Disposable Income calculated under 1325(b)(3), these courts must ignore that BAPCPA's added the phrase "to unsecured creditors" to 1325(b)(1)(B) and must also adjust Disposable Income from a calculation of what [general] unsecured creditors should receive, to become a measure of ability to pay; this usually means ignoring Form B22C's Disposable Income and using Schedule I - J in its place.
>
>
>
>
> Peter M. Lively, JD/MBA
> Law Office of Peter M. Lively * Personal Financial Law Center I
> 11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
> Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
> A-Bankruptcy- Attorney. com
> Personal Financial Law Center II - Costa Mesa, CA
>
>
>
> THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
>
>
>
>
>
>
> --
> Holly Roark
> holly@roarklawoffic es.com
> www.roarklawoffices .com
> Central District of California
> Consumer Bankruptcy Attorney
>
The post was migrated from Yahoo.
Above median Income, below median income & projected disposible Income.
Sent from my iPhone
On Jul 13, 2010, at 12:47 PM, robert90701@aol.com wrote:
Please, what is AMI PDI and BMI PDI?
In a message dated 7/13/2010 8:58:18 A.M. Pacific Daylight Time, petermlively2000@yahoo.com writes:
Lanning adjustment of AMI PDI doesn't solve the problem that AMI PDI is a measure of only general unsecured creditor value and BMI PDI is a measure of Plan Base. The only way to make 1325(b)(1)(B) function is a non-aburd way is to treat PDI as a Plan Base measure for both AMI & BMI. Otherwise, unsecured creditors must be fully paid before any other plan use for BMI debtors.
Peter M. Lively, JD/MBA
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
A-Bankruptcy-Attorney.com
Personal Financial Law Center II - Costa Mesa, CA
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
The post was migrated from Yahoo.