In a published opinion, the Fourth Circuit affirmed the denial of confirmation of an above-median Chapter 13 debtor’s plan that proposed to pay off three recently purchased vehicles while paying unsecured creditors less than eight cents on the dollar. In Goddard v. Burnett, No. 25-1303 (4th Cir. Apr. 28, 2026), the court held that technical compliance with the disposable-income test under Section 1325(b) does not insulate a plan from the separate good-faith requirement of Section 1325(a)(3). This ruling creates a circuit split on this issue with the case of Drummond v. Welsh (In re Welsh), 711 F.3d 1120 (9th Cir. 2013).
[Read more…] about Fourth Circuit Holds Good-Faith Review May Consider Whether Secured Property Is Necessary for Above-Median Chapter 13 DebtorsSupreme Court Denies Cert. in Baud v. Carroll
Today the Supreme Court denied certiorari in the case of Baud v. Carroll, which raised the issue of the appropriate applicable commitment period for an above-median income debtor with no “projected disposable income.” The Sixth Circuit Court of Appeals held below that above-median income debtors with no projected disposable income must propose five year plans if the trustee or unsecured creditor objects to a shorter plan period. See 634 F.3d 327 (6th Cir. 2011). Attention will now turn to Flores v. Danielson, No. 11-55452 (9th Cir.), where the Ninth Circuit will consider whether the Supreme Court’s ruling in Hamilton v. Lanning, 130 S.Ct.2464 (2010), abrogated the Ninth’s Circuit prior ruling on the applicable commitment period in Kagenveama v. Maney, 541 F.3d 868 (9th Cir. 2008).