On July 16, 2025, the National Consumer Bankruptcy Rights Center (NCBRC) and the National Association of Consumer Bankruptcy Attorneys (NACBA) filed a joint amicus brief in the U.S. Court of Appeals for the Fourth Circuit in support of the debtor-appellant in Goddard v. Burnett, Case No. 25-1303. The case presents a critical question about the interaction between the statutory “means test” and the judicially interpreted “good faith” standard in Chapter 13 bankruptcy cases.
The Issue on Appeal
At the heart of the appeal is whether a bankruptcy court may deny confirmation of a Chapter 13 plan under § 1325(a)(3) (good faith) when the debtor’s proposed plan complies with the “means test” formula under § 1325(b), including deductions for secured debts.
The debtor, Bobby Goddard, proposed a plan retaining and paying for three financed vehicles—a Chevrolet Corvette, a GMC Sierra pickup, and a Genesis G70 sedan. The trustee objected to confirmation on the grounds that retaining all three vehicles was unnecessary and indicative of bad faith. Although the debtor’s plan satisfied the disposable income requirements of § 1325(b), the bankruptcy court sustained the trustee’s objection under § 1325(a)(3), and both the district court and bankruptcy court rejected the argument that BAPCPA’s statutory means test preempts the necessity determination under the good faith inquiry.
The Argument from Appellant
Goddard’s appellate brief contends that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) fundamentally changed how “reasonably necessary” expenses are determined. For debtors above median income like Goddard, that determination is governed by the mechanical formula in § 707(b)(2), incorporated into § 1325(b)(3). The Appellant is represented by NACBA member Travis P. Sasser of the Sasser Law Firm in Cary, North Carolina. The brief argues:
- BAPCPA supplanted case-by-case judicial discretion with a standardized means test.
- The deduction for secured debt payments under § 707(b)(2)(A)(iii)(I) does not allow courts to exclude expenses based on their perceived necessity.
- Allowing courts to override allowable deductions through the good faith standard would nullify Congress’s reforms and reintroduce pre-BAPCPA judicial discretion through the back door.
NACBA and NCBRC’s Amicus Position
In their amicus brief, NACBA and NCBRC echo these statutory concerns and add a broader policy perspective. They urge the Fourth Circuit to hold that bankruptcy courts may not second-guess secured debt deductions when calculating projected disposable income—so long as the debtor’s calculation follows the Code.
Key points from the amicus brief include:
- The Lower Court Opinions punish debtors for following the Bankruptcy Code and Official Forms.
- Textual Clarity: Congress clearly permitted debtors to deduct “amounts scheduled as contractually due” on secured debts without an additional necessity overlay.
- Affirming the Lower Court Opinions Creates a Circuit Split: Affirmation of the lower courts would create a circuit split with Ninth Circuit in Drummond v. Welsh (In re Welsh), 711 F.3d 1120 (9th Cir. 2013). The applicable holding of Welsh is: “We conclude that Congress’s adoption of the BAPCPA forecloses a court’s consideration of a debtor’s … payments to secured creditors as part of the inquiry into good faith under 11 U.S.C. § 1325(a).” Id. at 1135.
- Secured Creditors Will Be Harmed by Affirmance: BAPCPA included protections for secured creditors. Affirming the lower court opinions could disrupt the flow of capital into the vehicle lending market.
The amici argue that if the plan complies with the Code’s requirements—particularly § 1325(b)’s means test—then the good faith provision of § 1325(a)(3) should not be used to impose an additional, undefined necessity requirement. This brief was written by NACBA member Richard Cook of Richard P. Cook PLLC, Inc. in Wilmington, North Carolina.
Why This Case Matters
This appeal has national implications for Chapter 13 practice. A ruling affirming the lower courts could give trustees and judges wide discretion to deny plans based on subjective views of consumer choices, even when debtors fully comply with statutory requirements. A reversal would help ensure that BAPCPA’s objective standards govern plan confirmation and protect debtors’ right to propose plans based on a clear, predictable formula.
NACBA and NCBRC’s Commitment
As leading advocates for consumer debtors, NACBA and NCBRC are committed to ensuring that courts apply the Bankruptcy Code as written and that debtors are not penalized for retaining necessary or even modestly aspirational property. Their participation in Goddard reflects ongoing efforts to preserve the integrity of the means test and defend debtors from judicially imposed limitations not found in the statute.