09-12428-13 In re Wirth

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Bankruptcy
Chapter 13; length of plan

A bankruptcy court cannot confirm a plan proposed by above-median income debtors that lasts for less than 60 months, even if it offers creditors as much money as the chapter 13 means test would require be paid over that time period.

“The statute says that the plan may be confirmed over the objection of the trustee only if all of the debtor’s monthly disposable income to be received during the applicable commitment period is devoted to the payment of allowed unsecured claims. In fact, if the statutory definition of ‘applicable commitment period’ from sec. 1325(b)(4) is inserted into sec. 1325(b)(1)(B), the emphasized portion of the provision would be read to require payment of projected disposable income ‘to be received in the [not less than five years] beginning on the date that the first payment is due under the plan.’ This is also consistent with the legislative history of BAPCPA, which indicate that chapter 13 plans will have a ‘5-year duration’ in certain cases, and describes the changes to sec. 1325(b) as providing that a debtor must make payments ‘over a period that is not less than five years’ if the debtor’s income exceeds certain monetary thresholds.”

09-12428-13 In re Wirth

W.D.Wis., Utschig, Bankr. J.