National Consumer Bankruptcy Rights Center

Protecting The Rights Of Consumer Debtors In Bankruptcy

Applicable Commitment Period

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Grace Period to Cure Arrearage Beyond Five-Year Plan Period

A bankruptcy court has the 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 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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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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Pliler v. Browning, No. 13-1445 (4th Cir.)

Type: Amicus
Date: June 20, 2013
Description: Whether section 1325(b)(4)(B) created a minimum plan length of sixty months for above-median debtors, and whether 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.
Result: Affirmed March 28, 2014
Pliler NACBA amicus

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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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Fourth Circuit Takes on Applicable Commitment Period Issue

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 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…] about Fourth Circuit Takes on Applicable Commitment Period Issue

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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 outlined 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

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In re Bullard, No. 12-54 (B.A.P. 1st Cir.)

Type: Amicus brief
Date: November 20, 2012
Description: Whether Chapter 13 plan that bifurcates residential lien and pays secured portion outside plan and unsecured portion within plan must pay off entire mortgage within five years.
Result: Judgment affirmed, May 24, 2013, Case dismissed by First Circuit as interlocutory, No. 13-9009 (May 14, 2014); U.S. Supreme Court cert. granted No. 14-116 (Dec. 12, 2014)

Bullard NACBA amicus

Bullard BAP 1st Cir opinion