§ 36.18     Statement of Anticipated Increase in Income or Expenditures
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 36.18, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

Unless the court orders otherwise, § 521(a)(1)(B)(vi), as amended by BAPCPA, requires that the debtor file “a statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of the filing of the petition.”1

[2]

Inartful drafting leaves us to guess what information this new statement requires. What does “income or expenditures” in new § 521(a)(1)(B)(vi) mean? This would be a silly question but for the fact that “current income and current expenditures” in § 521(a)(1)(B) does not mean the same thing as “current monthly income” in § 101(10A).2 Schedules I and J to Official Form 6 itemize the debtor’s current income and current expenditures as of the date of the petition. New Official Form B22C requires the debtor to itemize a completely different Report of Income based on the six months prior to the month in which the Chapter 13 petition was filed.3 For Chapter 13 debtors with current monthly income (CMI) greater than applicable median family income,4 expenses reported on Form B22C are based on IRS allowances, not actual expenses.5 Does § 521(a)(1)(B)(vi) require a statement of reasonably anticipated increases in income or expenditures with respect to “current income and current expenditures” under § 521(a)(1)(B)(ii) or with respect to the “current monthly income” and disposable income calculations in § 101(10A) and new Official Form B22C?

[3]

The rules drafters have answered this question by adding to Schedules I and J of Official Form 6 lines on which the debtor is instructed to “describe any increase or decrease in income [expenditures] reasonably anticipated to occur within the year following the filing of this document.”6 It is implicit in the location of these questions in Schedules I and J that changes in current income and current expenditures—as of the petition—is what the rules drafters think new § 521(a)(1)(B)(vi) contemplates.

[4]

What does “reasonably anticipated increase” mean in new § 521(a)(1)(B)(vi)? Prior to BAPCPA, Schedule I to Official Form 6 instructed debtors to “describe any increase or decrease of more than 10% in any of the above categories anticipated to occur within the year following the filing of this document.”7 The statute now mandates in § 521(a)(1)(B)(vi) a statement of increases that are reasonably anticipated during the 12 months after the petition. Why did the rules drafters depart from the statute to require a statement of decreases in income or expenditures when the statute only requires a statement of increases? Is the disclosure more or less inclusive than before BAPCPA now that only reasonably anticipated increases are required by the statute? Why did the rules drafters require a statement of any increase or decrease reasonably anticipated within a year “following the filing of this document” when the statute measures the disclosure from the “filing of the petition”?8

[5]

Chapter 13 debtors are required by § 1325(b) to commit “projected disposable income” to payments to unsecured creditors under the plan when § 1325(b) is invoked by an objection to confirmation.9 Prior to BAPCPA, the projected disposable income test required debtors, creditors and bankruptcy courts to determine the income that would be available during the future years of a Chapter 13 plan.10 Anticipating increases or decreases in a Chapter 13 debtor’s income and expenses after the petition was integral to projecting disposable income for confirmation purposes.

[6]

BAPCPA strangely redefines projected disposable income at confirmation in a Chapter 13 case by basing the calculation on the new term of art “current monthly income” in § 101(10A).11 Because currently monthly income is retrospective to the six months before the month in which the Chapter 13 petition was filed,12 projecting disposable income at confirmation under § 1325(b) no longer requires consideration of the debtor’s actual income at confirmation or at any particular moment thereafter.13 Even a reasonably anticipated increase in the debtor’s income at the petition will not change the amount of current monthly income upon which the projected disposable income test will be based at confirmation after BAPCPA. If the rules drafters are correct that the statement of reasonably anticipated increase in income or expenditures required by new § 521(a)(1)(B)(vi) is based on current income and current expenditures under Schedules I and J of Official Form 6—and not on current monthly income calculated in new Official Form B22C14—then we must look elsewhere for the purpose of § 521(a)(1)(B)(vi) in Chapter 13 cases. Perhaps a use for the new statutory disclosure will be found in the feasibility test in § 1325(a)(6).15

[7]

The filing of a statement of any reasonably anticipated increase in income or expenditures can be modified on motion.16


 

1  11 U.S.C. § 521(a)(1)(B)(vi).

 

2  See §§ 35.10 [ Schedules I and J—Income and Expenditures ] § 36.16  Schedules I and J—Income and Expenditures, 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19  Form 122C-1: Statement of Current Monthly Income and 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

3  See 11 U.S.C. § 101(10A), discussed in §§ 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19  Form 122C-1: Statement of Current Monthly Income and 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

4  See § 469.1 [ Comparison of CMI to Applicable Median Family Income: § 1325(b)(3) ] § 92.4  Household Size and Comparison of CMI to Median Family Income: § 1325(b)(3).

 

5  See §§ 380.1 [ Form B22C: Disposable Income Calculation ] § 36.21  Form 122C-2: Disposable Income Calculation and 471.1 [ Big Picture: Too Many Issues ] § 94.1  Big Picture: Too Many Issues487.1 [ Additional Expenses or Adjustments to CMI ] § 98.1  Additional Expenses or Adjustments to CMI.

 

6  Line 17 to Schedule I and Line 19 to Schedule J, Official Form 6.

 

7  Schedule I to Official Form 6 prior to amendment in 2005, discussed in § 35.10 [ Schedules I and J—Income and Expenditures ] § 36.16  Schedules I and J—Income and Expenditures.

 

8  11 U.S.C. § 521(a)(1)(B)(vi).

 

9  See § 466.1 [ In General ] § 92.1  In General.

 

10  See §§ 163.1 [ In General ] § 91.1  In General and 164.1 [ Projected (Disposable) Income ] § 91.2  Projected (Disposable) Income.

 

11  See 11 U.S.C. § 1325(b)(2), discussed in § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

12  See 11 U.S.C. § 101(10A), discussed in §§ 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19  Form 122C-1: Statement of Current Monthly Income and 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

13  This may be a controversial reading of § 1325(b). See §§ 467.1 [ Projected Disposable Income: All Debtors ] § 92.2  Projected Disposable Income: All Debtors and 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

14  See §§ 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19  Form 122C-1: Statement of Current Monthly Income and 380.1 [ Form B22C: Disposable Income Calculation ] § 36.21  Form 122C-2: Disposable Income Calculation for discussion of Official Form B22C.

 

15  See 11 U.S.C. § 1325(a)(6), discussed in § 497.1 [ Feasibility Turned on Its Head ] § 111.2  Feasibility Turned on Its Head after BAPCPA.

 

16  See 11 U.S.C. § 521(a)(1)(B) (“unless the court orders otherwise”).