10th Circuit BAP Rules on What is "Projected Disposable Income"?
Posted: Fri Dec 21, 2007 6:00 pm
In re Lanning, --- B.R. ---, 2007 WL ------------ (10th Cir. BAP
December, 2007)
Issue: Can an over-median debtor confirm a chapter 13 plan paying less
than the B22C net income by showing "special circumstance"?
Holding: Yes
Judge Thurman
The debtor is an over-median chapter 13 debtor whose B22C shows a net of
$1,114 because of two one-time payments by her employer in the last six
months. Her "I and J" net income is $149. The bankruptcy court
confirmed the chapter 13 plan of $149 (for 60 months apparently).
The BAP affirmed. "[W]e agree with the courts that have found
`disposable income' to be only the starting point in determining
`projected disposable income' under section 1325(b)(1)(B).
Where it is shown that Form B22C disposable income fails accurately to
predict a debtor's actual ability to fund a plan, that figure may be
subject to modification." The BAP looked for "guidance" in
Section 707(b)(2)(B)(i) which "allows debtors to rebut that
presumption [of abuse] `by demonstrating special circumstances . . .
that justify additional expenses or adjustments of current monthly
income for which there is no reasonable alternative."
"Therefore, parties contending that a debtor's Form B22C
disposable income figure does not accurately project the debtor's
future ability to fund a plan must present documentation similar to that
required by section 707(b)(2)(B)(ii) in support of their claim.
However, we emphasize that deviation from the Form B22C determination of
disposable income will be the exception rather than the rule."
The decision can be accessed here.
One worthy
note: the debtor did not participate in the appeal (why should she?) so
the court asked the UST to file an amicus brief which it did supporting
the ruling and affirmance. (I guess they don't hate debtors)
In re Lanning, --- B.R. ---, 2007 WL ------------ (10th Cir. BAP December, 2007)
Issue: Can an over-median debtor confirm a chapter 13 plan paying less than the B22C net income by showing "special circumstance"? &n
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