Mr. Matusak’s plan provided, obviously among things, that he was required to produce verified updated Schedules of income and expenses during the 36 months Applicable Commitment Period of his plan whenever such were requested by the Chapter 13 Trustee or Ms. Brown, his ex-wife and a creditor. Based on that financial information, Ms. Brown filed a motion to modify Mr. Matusak’s plan in November 2016, seeking both an increase in the monthly payment and an extension of the plan from 36 to 60 months.
Prior to the hearing on the Motion to Modify in April 2017, Mr. Matusak made the 36th payment under the original confirmed plan and argued that, the bankruptcy court no longer had authority to modify his plan as 11 U.S.C.… Read More
Confirmation of the Debtor’s Chapter 13 plan was delayed for 15 months due to an adversary proceeding to cram-down a residential mortgage held by JPMorgan Chase. Following dismissal of the adversary proceeding, the Debtor proposed a plan that would have run for 60 months from confirmation. Because that plan would have run for a total of 75 months from the first §341 Meeting of Creditors, the Trustee objected.
Finding that this issue had already been addressed by the 4th Circuit in West v. Costen, 826 F.2d 1376, 1378 (4th Cir. 1987), the bankruptcy court held that “he applicable commitment period cited in § 1329(c) begins with the first payment made under a confirmed plan and not the first payment due under a proposed plan, which is typically due within one month of filing the petition.” This is still subject to the other requirements of § 1329, including good faith, but any delays in the adversary proceeding were “not fully or even mostly the debtor’s fault” and the Trustee’s failure to engage had further delayed that proceeding.… Read More
At issue in this case was first whether the Applicable Commitment period, as defined by 11 U.S.C. § 1325(b)(4), was a temporal requirement, i.e. 3 years for below median income debtors or 5 years for those with income above median, or was not applicable if the Debtors had no disposable income under § 1325(b)(1). Agreeing with now all of the Circuit Courts that have answered this question, the 4th Circuit held that the Applicable Commitment Period is, in fact temporal. This conclusion was based first on the language of the Bankruptcy Code, with the Court of Appeals, citing Tennyson from the 11th Circuit, that:
that “‘applicable’ and ‘commitment’ are modifiers of the noun, the core substance of the term, ‘period’.… Read More