Satisfy Your Credit Counseling Requirement Before Filing Bankruptcy
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Personal Financial Management Instruction

Fridley v. Forsythe (In re Fridley), 380 B.R. 538, 543 (B.A.P. 9th Cir. 2007) (Klein, Montali, Jury) (Although Sunahara v. Burchard (In re Sunahara), 326 B.R. 768 (B.A.P. 9th Cir. 2005), permitted prepayment of confirmed plan, modification motion is required before debtor may prepay plan and obtain early discharge, unless prepayment satisfies all allowed claims. Construing § 1325(b) “applicable commitment period” as temporal requirement, confirmation of plan providing 36 months of disposable income required debtor to either continue to pay for full 36 months or move for modification under § 1329. Debtors may not obtain early discharge under § 1328(a) without modifying. “Sunahara did not inadvertently license circumvention of § 1325(b) by the ploy of confirming a plan that complies with § 1325(b) and then promptly modifying the plan in a manner that does not comply with § 1325(b). Such a stratagem plainly would be an unfair manipulation of the Bankruptcy Code.” Enactment of BAPCPA did not change requirement of modification, and debtors have not satisfied §§ 1328(a)and 1329(b) requirements for plan completion by prepayment without modification.).

See Also: Bankruptcy Boston

Waldron v. Brown (In re Waldron), 536 F.3d 1239, 1245 (11th Cir. 2008) (Edmondson, Pryor, Johnson) (Bankruptcy court has discretion to require disclosure of postpetition causes of action, including recovery from uninsured motorist insurance, consistent with creditors’ rights under § 1329. “The disclosure of postconfirmation assets gives the trustee and creditors a meaningful right to request, under section 1329, a modification of the debtor’s plan to pay his creditors. . . . When a debtor discloses assets acquired after confirmation, creditors may move the bankruptcy court to modify the plan to increase payments made by the debtor to satisfy a larger percentage of the creditors’ claims. . . . We do not hold that a debtor has a freestanding duty to disclose the acquisition of any property interest after the confirmation of his plan under Chapter 13. Neither the Bankruptcy Code nor the Bankruptcy Rules mention such a duty, cf. Fed. R. Bankr. P. 1007(h) (requiring a debtor to supplement his schedule regarding interests acquired after petition under section 541(a)(5) of the Code), and our precedents . . . do not address that issue. But the bankruptcy court has the discretion, under Rule 1009, to require a debtor to amend his schedule of assets to disclose a new property interest acquired after the confirmation of the debtor’s plan.”).

See Also: Chapter 7 Bankruptcy

In re Williams, 394 B.R. 550 (Bankr. D. Colo. 2008) (Brown) (Attempting to harmonize Money v. Kagenveama (In re Kagenveama), 527 F.3d 990 (9th Cir.), as amended, 541 F.3d 868 (9th Cir. 2008), and In re tanning, 380 B.R. 17 (B.A.P. 10th 2007), appeal docketed, No. 08-3009 (10th Cir. Jan. 14, 2008), disposable income for debtor with CMI greater than applicable median family income is determined consistent with Form B22C and then projected mathematically over applicable commitment period but debtor (only) can demonstrate special circumstances to depart from income or expense calculation on Form B22C).

In re Hedge, 394 B.R. 463 (Bankr. S.D. Ind. 2008) (Lorch) (Citing Money v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), projected disposable income is disposable income as defined in § 1325(b)(2) “projected” over life of plan.).
In re Minahan, 394 B.R. 116 (Bankr. W.D. Va. 2008) (Stone) (FollowingIn reJass, 340 B.R. 411 (Bankr. D. Utah 2006), projected disposable income is determined as of “effective date of the plan” which requires consideration of changes in income and expenses between the petition and confirmation.).

See Also: Bankruptcy Los Angeles

In reReinstein, 393 B.R. 838,841 (Bankr. E.D. Wis. 2008) (Shapiro) (CitingNeary v. Ross-Tousey (In reRoss-Tousey), 368 B.R. 762 (E.D. Wis. 2007), if debtor has housing or transportation expenses, the Local Standards amounts are allowed even if actual expenses are less. “This court finds itself aligned with those cases holding that the housing and transportation expenses contained in the Local Standards are fixed expenses and apply where a debtor has, in fact, incurred some housing and transportation expenses, even if the actual expenses are lower than the Local Standard expenses.”).

In re May, 390 B.R. 338, 347-49, 342 nn.3 & 4, 349 n.13 (Bankr. S.D. Ohio 2008) (Walter) (Adopting Hildebrand v. Kimbro (In re Kimbro), 389 B.R. 518 (B.A.P. 6th Cir. 2008), debtor with unencumbered car is allowed Local Standards transportation ownership expense deduction; changes by IRS to Standards and postings of modified Standards to UST Web page are problematic. “[T]he allowance for vehicle ownership costs pursuant to the IRS Local Standards under § 707(b)(2)(A)(ii)(I) must be something other than a debtor’s actual monthly car payment. Any other reading renders the two provisions redundant or creates the absurdity of allowing debtors to deduct their monthly car payment twice. . . . Section 707(b)(2)(A)(ii)(I) places no limitations on a debtor’s deductions beyond choosing the debtor’s applicable monthly expense amounts specified under National and Local Standards…. Neither the standard nor the language of the statute requires a debtor to do anything more than own a vehicle to take the vehicle ownership costs deduction… . [R]eliance on the IRM to interpret how the IRS standards should be used in bankruptcy is not authorized by the language of the statute…. [T]he IRM was drafted for a completely different purpose …. [T]he IRM is an internal IRS manual intended to provide revenue officers with a flexible and discretionary system of calculating expenses for negotiating with delinquent taxpayers…. Congress adopted the IRS standards in bankruptcy to provide a fixed set of expense allowances to debtors in order to level the playing field and to eliminate judicial discretion.
Chapter 7 Bankruptcy

In reJanssen, 396 B.R. 624 (Bankr. E.D. Pa. 2008) (Frank) (Violation of § 1327(a) can be remedied under § 105(a). Closed case is reopened to permit prosecution of adversary proceeding alleging that mortgage creditor failed to properly apply payments to prepetition arrearage.).

In re Dendy, 396 B.R. 171 (Bankr. D.S.C. 2008) (Waites) (Confirmation of properly noticed plan that treated second mortgage as wholly unsecured and void is binding on creditor that failed to object but lienholder is not obligated to release or cancel mortgage after discharge; in rent and in personam obligations are satisfied and debt is uncollectible but mortgagee did not violate confirmed plan, confirmation order or discharge injunction by failing to take independent steps to release mortgage of record. Confirmation voided mortgage and court can order that recorder reflect mortgage was voided.).

In re Lemma, 394 B.R. 315, 322-24 (Bankr. E.D.N.Y. 2008) (Grossman) (Confirmed plan that cures default and maintains payments trumps relief from codebtor stay under § 1301(c)(2) notwithstanding prepetition judgment of foreclosure and postpetition termination of § 362(a) stay under § 362(c)(3). “The only effect termination of the stay had on this case was to permit the Bank to proceed against Debtors in state court…. [T]here is nothing in the Code to even suggest that once the stay is terminated, Debtors can no longer bind the Bank under a plan which implements the cure and reinstatement provisions provided in the Bankruptcy Code…. The Bank is now barred by res judicata from arguing that Debtors had no right to cure and reinstate the mortgage and note. . . . [E]ven where the stay has been terminated preconfirmation by operation of law under section 362(c)(3) . . . the debtor still retains the right to bind the creditors under a confirmed plan [T]his Court declines to follow [In re Cline, 386 B.R. 344 (Bankr. N.D. Ala. 2008).]”).

See Also Bankruptcy Boston

In re Chalakee, 385 B.R. 771,777-81 (Bankr. N.D. Okla. 2008) (Michael) (Objection to eCast proof of claim fails to state ground under § 502(b), citing B-Line, LLC v. Kirkland (In re Kirkland), 379 B.R. 341 (B.A.P. 10th Cir. 2007); objection based solely on lack of documentation under Bankruptcy Rule 300 l(c) and scheduling claims as disputed stated no basis for disputing amount or validity. “While this Court is reluctant to pre-judge what quantum or quality of legal or factual allegations would be required to shift the burden to a claimant to respond, it concludes that Debtors’ Objections in this case—simply stating that they dispute the amounts owed—are inadequate for either the Court or the claimants to assess the basis of the objections. A terse statement that Debtors dispute a claim, without more, does not provide sufficient grounds to disallow a claim. . . . When asked to elaborate, given the holding in Kirkland that an objection by a party in interest seeking disallowance of a claim must be raised under § 502(b), they simply responded that the claims should be stricken under § 502(b) as unenforceable under Oklahoma law—for failure to provide supporting documentation. Debtors may not raise the specter of § 502(b)(l) to avoid paying debts that they cannot in good faith disavow.”).

See Also: Chapter 7 Bankruptcy

In re Fining, No. 06-12593, 2008 WL 2073966 (Bankr. N.D.N.Y. May 14, 2008) (Littlefield) (Because § 1325(b)(l)(B) requires all projected disposable income “will be applied to make payments to unsecured creditors under the plan,” debtor with $182.16 of monthly disposable income must pay at least that amount each j month after confirmation to unsecured creditors; plan that pays attorney fees and secured creditors first and | delays distribution to unsecured creditors for 27 months cannot be confirmed.).
§ 467.1 Projected Disposable Income: All Debtors
In re Lanning, 380 B.R. 17, 24-25 (B.A.P. 10th Cir. 2007) (Bohanon, McNiff, Thurman) (Citing In re Kibbe, 361 B.R. 301 (B.A.P. 1st Cir. 2007) and Pak v. eCast Settlement Corp. (In re Pak), 378 B.R. 257 (B.A.P. 9th Cir. 2007), disposable income calculated consistent with Form B22C is starting point to determine projected disposable income.

In re McSparran, No. 08-61606-13, 2009 WL 981131 (Bankr. D. Mont. Mar. 27, 2009) (Kirscher) (”Reasonsableness” of owning two homes may or may not be relevant to disposable income calculation depending on whether debtor has CMI greater or less than applicable median family income; citing Money v. i Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), if debtor has CMI greater than applicable j median family income, then “mechanical test” applies and discretion to determine reasonableness of expenses is limited by BAPCPA. Omission of nonfiling spouse’s income from CMI calculation on Form B22C is not explained and outcome of that inquiry will determine whether debtor’s CMI is greater or less than applicable median family income.).

In re Coffin, 396 B.R. 804, 809 (Bankr. D. Me. 2008) (Haines) (Reasonableness and necessity standard applies to disallow deduction for ownership expenses of car owned free of lien. “The determinative standard for Chapter 13 debtors’ expenses is reasonableness and necessity. A non-expenditure . . . does not qualify.”).