§ 92.2     Projected Disposable Income: All Debtors
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 92.2, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

Upon objection by the trustee or the holder of an allowed unsecured claim, the bankruptcy court may not confirm a Chapter 13 plan unless one of two conditions is satisfied: either the value of property to be distributed under the plan on account of the objecting creditor’s claim is “not less than the amount of such claim”;1 or the plan must provide that all of the debtor’s “projected disposable income to be received in the applicable commitment period” is applied to payments to unsecured creditors under the plan.2 The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)3 changed the projected disposable income test4 in important ways and, perhaps more importantly, did not change the test in others.

[2]

First, “applicable commitment period” has been substituted for the “three-year period” during which projected disposable income must be committed to payments under the plan. “Applicable commitment period” is a new term of art.5 There is disagreement in the reported decisions whether applicable commitment period is a temporal measurement of the length of the Chapter 13 plan or a mathematically derived multiplier in a formula that determines the amount of projected disposable income that must be committed to unsecured creditors under the plan.6

[3]

The second major change is that projected disposable income received during the applicable commitment period is applied to make payments to unsecured creditors under the plan. Under prior law, there was some disagreement whether the projected disposable income test addressed the reasonableness or necessity of payments to secured claim holders provided for by the plan.7 Now it is clear that the test accounts for all payments to creditors and all living expenses of the debtor on the way to calculating the entitlement of unsecured creditors.

[4]

BAPCPA next changed the definition of “disposable income.” Under pre-BAPCPA law, disposable income was defined as “income which is received by the debtor and which is not reasonably necessary to be expended— . . . (A) for the maintenance or support of the debtor or a dependent of the debtor.”8 After BAPCPA, and as further amended by the Religious Liberty and Charitable Donation Clarification Act of 2006,9 § 1325(b)(2) reads as follows:

(2) For purposes of this subsection, the term “disposable income” means current monthly income received by the debtor (other than child support payments, foster care payments, or disability payments for a dependent child made in accordance with applicable nonbankruptcy law to the extent reasonably necessary to be expended for such child) less amounts reasonably necessary to be expended—
(A)(i) for the maintenance or support of the debtor or a dependent of the debtor, or for a domestic support obligation, that first becomes payable after the date the petition is filed; and
(ii) for charitable contributions (that meet the definition of “charitable contribution” under section 548(d)(3) to a qualified religious or charitable entity or organization (as defined in section 548(d)(4)) in an amount not to exceed 15 percent of gross income of the debtor for the year in which the contributions are made; and
(B) if the debtor is engaged in business, for the payment of expenditures necessary for the continuation, preservation, and operation of such business.
(3) Amounts reasonably necessary to be expended under paragraph (2), other than subparagraph (A)(ii) of paragraph (2), shall be determined in accordance with subparagraphs (A) and (B) of section 707(b)(2), if the debtor has current monthly income, when multiplied by 12, greater than—
(A) in the case of a debtor in a household of 1 person, the median family income of the applicable State for 1 earner;
(B) in the case of a debtor in a household of 2, 3, or 4 individuals, the highest median family income of the applicable State for a family of the same number or fewer individuals; or
(C) in the case of a debtor in a household exceeding 4 individuals, the highest median family income of the applicable State for a family of 4 or fewer individuals, plus $525 per month for each individual in excess of 4.10
[5]

The new term of art “current monthly income” (CMI) was substituted for the generic “income” under former law. For all Chapter 13 debtors, the determination of what must be paid to unsecured creditors upon objection under § 1325(b) begins with calculation of CMI under § 101(10A).11 Notwithstanding clarity in § 1325(b)(2), there was much disagreement among the courts whether CMI as defined in § 101(10A) fully circumscribed the income component of the projected disposable income test.12 In June 2010, the Supreme Court signaled that CMI is relevant but not the whole story with respect to the income side of the projected disposable income test.13

[6]

For all Chapter 13 debtors there are five exclusions or adjustments to get from CMI to disposable income. Three of the five are revealed in § 1325(b)(2);14 two of the exclusions are buried elsewhere in the Code.15 The five exclusions and adjustments to CMI on the way to disposable income are: (1) “amounts reasonably necessary to be expended—”;16 (2) amounts included in CMI by § 101(10A)(B) but not “received” by the debtor;17 (3) child support, foster care and disability payments received by the debtor to the extent reasonably necessary to be expended for a child;18 (4) amounts required to repay a pension loan described in §§ 1322(f) and 362(b)(19);19 and (5) wages withheld or payments received by an employer as contributions to a qualified retirement plan.20

[7]

Of the five exclusions or adjustments to CMI necessary to calculate disposable income, by far the most complex is the first listed above—“amounts reasonably necessary to be expended—.” The difficulty arises because BAPCPA defines “amounts reasonably necessary to be expended—” differently depending on a comparison of the debtor’s CMI to median family income.21 This calculation is in § 1325(b)(3).

[8]

Section 1325(b)(3) instructs Chapter 13 debtors to annualize CMI and then to compare annualized CMI to “median family income of the applicable State.” According to the Bankruptcy Code, it is the debtor in a “household” that determines the appropriate reference for median-family-income figures. The Census Bureau produces median-family-income statistics in several different formats.22 Sometimes median family income is expressed by family size and number of workers, sometimes just by family size. The Census Bureau calculates “median household income” by two- and three-year averages but does not report “median family income” by household size. As defined by the Census, a household includes “all the people who occupy a housing unit as their usual place of residence” without regard to whether those persons are related by birth, marriage or adoption.23 For purposes of § 1325(b)(3), the size of a Chapter 13 debtor’s household determines the size of the “family” to use to find the correct median-family-income chart from the Census Bureau.

[9]

If the debtor has a household of one person, the statute says to use the median-family-income amount for “one earner.”24 If the debtor’s household has two, three or four individuals, the debtor is instructed to use the “highest median family income” for a family of the “same number or fewer individuals.”25 “Fewer” could be meaningful because median family income amounts typically go down as family size exceeds four persons. A debtor with a household of five or six individuals will find that median family income is probably larger using the “four-person family” statistics from the Census Bureau. For a household exceeding four individuals, the debtor is instructed to select the highest median family income for a family of four or fewer individuals and then to add “$62526 per month for each individual in excess of four.”27

[10]

“[A]pplicable State” is not defined for purposes of the comparison of CMI to median family income. A guess is that applicable state means the state in which the debtor resides at the petition. Other interpretations are possible. BAPCPA carefully selects states other than the current state of residence in other places—for example, the new domicile rules for exemptions in § 522(b)(3)(A).28 Median-family-income amounts vary greatly from state to state, and it may be in the best interests of a debtor to challenge the meaning of applicable state in § 1325(b)(3) when, for example, the debtor is resident temporarily in one state and maintains a domicile in another state and the difference would move the debtor between over- and under-median-income status.

[11]

The statute is worded disjunctively that, for debtors in households larger than two individuals, the applicable median family income is “the highest median family income of the applicable State for the family of the same number or fewer individuals.”29 The statute could be read to say that the highest median family income controls for any family size up to and including the household size of the debtor. Equally plausible, the statute says that the debtor can choose the highest median family income of the applicable state for a family the same size as the debtor’s household or the debtor can select the highest median family income of the applicable state for a family with fewer individuals than the debtor’s household.

[12]

It will not always be in the debtor’s best interests to select the “highest” of the highest median family incomes available under this formula. Depending on the debtor’s annualized CMI, selecting the highest median family income available may put the debtor under median family income, whereas selecting the highest median family income for a different available family size would put the debtor over median family income. Because “amounts reasonably necessary to be expended—” are completely different depending on whether the debtor’s CMI is over or under the applicable median family income,30 the choice of family size can make all the difference in the world with respect to what the debtor must commit to pay to unsecured creditors under the plan.

[13]

Don’t forget that the Census Bureau data on median family income are rarely available for the current year. If the chart you consult shows median family income for 2006 or 2007, don’t be surprised, and don’t forget to adjust the amounts shown by a consumer price index adjustment.31

[14]

If the debtor’s annualized CMI is greater than applicable median family income, “amounts reasonably necessary to be expended—” for purposes of § 1325(b)(2) shall be determined “in accordance with subparagraphs (A) and (B) of section 707(b)(2).”32 If the debtor’s annualized CMI is less than applicable median family income, then “amounts reasonably necessary to be expended—” is defined as quoted above in § 1325(b)(2)(A) and (B).

[15]

The difference here in the disposable income calculation is startling. The debtor with annualized CMI less than applicable median family income can deduct from CMI “amounts reasonably necessary to be expended—” for the maintenance or support of the debtor or the dependents of the debtor—a calculation similar to pre-BAPCPA law that subjects the debtor’s expenses to the scrutiny of the Chapter 13 trustee or of any allowed unsecured claim holder.33 For the debtor with annualized CMI greater than applicable median family income, “amounts reasonably necessary to be expended—” are determined in accordance with the IRS Standards and other allowances in § 707(b)(2)(A) and (B)—without the test for reasonableness or necessity imposed on under-median-income debtors.34

[16]

Many differences in treatment result. For example, for a Chapter 13 debtor with CMI less than applicable median family income, actual expenses for housing and transportation are deductible if reasonable and necessary under § 1325(b)(2)(A)(i).35 For a Chapter 13 debtor with CMI greater than applicable median family income, the statute says that housing and transportation expenses are the amounts specified in the Local Standards issued by the IRS without regard to whether those amounts are actual, reasonable or necessary.36 For a Chapter 13 debtor with CMI greater than applicable median family income, “amounts reasonably necessary to be expended—” include the total of all amounts “scheduled as contractually due to secured creditors” averaged over 60 months.37 For a Chapter 13 debtor with CMI less than applicable median family income, “amounts reasonably necessary to be expended—” only include reasonable and necessary payments to secured creditors, determined after consideration of the Chapter 13 plan.38 On various theories, many courts have refused to let go of the “reasonable” and “necessary” tests for expenses for all debtors, and the Supreme Court may have contributed to this push-back against the statute.39

[17]

At risk of oversimplification, every Chapter 13 debtor must do the following to calculate projected disposable income under § 1325(b):

 

 1.
Calculate CMI using the definition in § 101(10A).40
 

 

 

 

 2.
Using the household size of the debtor, pick an applicable median family income from data supplied by the Census Bureau. If necessary, adjust median family income using the Consumer Price Index.
 

 

 

 

 3.
Compare the debtor’s annualized CMI to applicable median family income.
 

 

 

 

 4.
If annualized CMI is less than applicable median family income, “amounts reasonably necessary to be expended—” are determined using § 1325(b)(2)(A) and (B).41
 

 

 

 

 5.
If annualized CMI is greater than applicable median family income, “amounts reasonably necessary to be expended—” are determined in accordance with § 707(b)(2)(A) and (B)42—including charitable contributions described in § 1325(b)(2)(A)(ii) in cases filed after December 20, 2006.43
 

 

 

 

 6.
Subtract from CMI “amounts reasonably necessary to be expended—” based on the appropriate formula determined in Line 4 or 5 above.44
 

 

 

 

 7.
Subtract from CMI amounts included in CMI by § 101(10A)(B) that were not “received” by the debtor. This will be amounts paid by others on a regular basis for the household expenses of the debtor or a dependent of the debtor but not “received” by the debtor.45
 

 

 

 

 8.
Subtract from CMI child support payments, foster care payments or disability payments for a dependent child to the extent reasonably necessary to be expended for such child.46
 

 

 

 

 9.
Subtract from CMI “amounts required to repay” a pension loan described in §§ 1322(f) and 362(b)(19).47
 

 

 

 

 10.
Subtract from CMI contributions withheld and payments received by an employer for an employee benefit plan, a deferred compensation plan, a tax-deferred annuity or a health insurance plan described in § 541(b)(7).48
 

 

 

 

 11.
Disposable income is CMI reduced by Lines 6 through 10 above.
 

 

 

 

 12.
Multiply disposable income from Line 11 by the applicable commitment period determined under § 1325(b)(4).49
 

 

 

 

 13.
The result is the amount that must be applied to make payments to unsecured creditors under the plan.50
 

 

 

 

 14.
CAUTION: If you have an “unusual” case, “known or virtually certain changes” in income or expenses may alter the calculation of projected disposable income.51
 

 

 

[18]

For those who think visually, here it is in a flowchart:

 

 

 

 

[19]

If this chart of the projected disposable income test as modified by BAPCPA makes you dizzy, perhaps you should skip the discussion of the case law that follows. The reported decisions interpreting amended § 1325(b) prove the adage that in bankruptcy the devil is always in the details.

[20]

In broadest strokes, between October 2005 and June 2010, two schools of thought developed in the reported decisions addressing what BAPCPA did to the projected disposable income test. Charitably, there are elements here of the interminable debate between textualists and purposivists.52 Less charitably, although both sides claimed the high ground of “plain meaning,” one group of courts—the Followers53—strained mightily to apply the new test as written; other courts—the Fixers54—rejected the mess BAPCPA made of the disposable income test and found license to substitute a different scheme for the one enacted. Along the way, various sources of income and expense information in the Official Bankruptcy Forms were commandeered to create a smorgasbord of uncertainty across and within districts that produced dramatically different outcomes for similarly situated debtors and creditors in Chapter 13 cases.

[21]

Detailed below, in June of 2010, the Supreme Court waded into this debate in Hamilton v. Lanning,55 taking sides with those who would Fix the statute. Unfortunately, Lanning raised more questions than it answered about the projected disposable income test, leaving much uncertainty with respect to the entitlement of unsecured creditors at confirmation under § 1325(b). To completely understand what the Supreme Court did and did not do in Lanning, some history is necessary.

[22]

Sometimes pejoratively described as the “mechanical” approach, a significant minority of pre-Lanning decisions calculated CMI consistent with § 101(10A),56 subtracted the expenses and other amounts allowed under § 1325(b)(2)57 or (b)(3)58—depending on whether the debtor’s CMI is greater than or less than applicable median family income59—and then these courts “projected” the resulting “disposable income” by multiplying disposable income times the number of months in the applicable commitment period.60 These courts were labeled “mechanical” because they read BAPCPA to have squeezed judicial discretion out of the projected disposable income test,61 substituting defined measures of income and expenses that must be applied according to the statutory formula.

[23]

The notion of “projected” revealed in these decisions is that “disposable income” is first calculated and then that amount is “projected” by applying disposable income to each month of the applicable commitment period. By this analysis, the word “projected” does not change the meaning of the phrase “disposable income” defined in § 1325(b)(2) and (3). These courts acknowledge that CMI is typically mired in the six months before the petition,62 but this disconnect from the reality of confirmation is accepted as a choice by Congress that is embedded in the statutory definition of “disposable income” and is not altered by projecting disposable income over the applicable commitment period.

[24]

The mechanical approach is ably explained and defended in these extended quotations from In re Alexander63 and In re Kolb:64

[T]his court will not override the definition and process for calculating disposable income under § 1325(b)(2)-(3) as being absurd simply because it leads to results that are not aligned with the old law. . . . [E]ven if this law is producing unintended results, it is the job of Congress to amend the statute. . . . [P]rojected disposable income has been traditionally calculated in conjunction with the definition of disposable income. . . . Both “projected disposable income” and “disposable income” fall under subsection (b) of § 1325. . . . If “disposable income” is not linked to “projected disposable income” then it is just a floating definition with no apparent purpose. . . . What is now considered “disposable” is based upon historical data—current monthly income derived from the six-month period preceding the bankruptcy filing. . . . [T]o arrive at “projected disposable income,” one simply takes the calculation mandated by § 1325(b)(2) and does the math. . . . [D]ebtors with no disposable income under the new law have no projected disposable income. . . . [B]ecause a debtor has income not counted in the definition of current monthly income, has housing or transportation expenses less than the permissible IRS deductions, has huge secured debt for luxury items that, bizarrely, may be deducted in full as a reasonable and necessary expense, or wishes to continue to contribute to or repay a loan to her 401(k) plan rather than pay her unsecured creditors, a debtor under the new “disposable income” test may show a zero or negative number, yet may be able to make the required showing that she actually has enough income to fund a confirmable plan.65
“[P]rojected disposable income” is simply monthly “disposable income” (based on prepetition “current monthly income”) applied to each future month of a chapter 13 plan. . . . [A]bsurdity cannot mean that BAPCPA was awkwardly written, does not reach some of the understood goals of BAPCPA, and/or creates unintended consequences, or fails to embrace the same principles as the prior law. . . . [N]one of these factors can rise to the level of absurdity. . . . [I]t must be something more than a subjectively flawed statute. . . . Income is no longer based on “income received by the debtor,” but instead is based on the debtor’s “current monthly income” (CMI). . . . [A] debtor’s actual income may be better or worse, often considerably so, than what is reflected in her CMI. . . . Once a debtor has determined her CMI, a debtor must subtract her expenses to determine disposable income. For debtors below the median income of their state . . . expenses are still determined based on the familiar “reasonably necessary” test that applied prior to BAPCPA. . . . [F]or above median family income debtors, § 1325(b)(3) requires that expenses are to be determined with reference to 11 U.S.C. § 707(b)(2)(A). . . . Section 707(b)(2) . . . reflects the intent of Congress to provide less discretion in the determination of expenses for above median family income debtors. . . . Congress deliberately preferred these defined immutable expenses for above family median income debtors as opposed to their actual reasonable and necessary expenses verified under oath. . . . The court . . . recognizes that [this] approach . . . can lead to harsh and, sometimes, unfair results . . . . [T]his formulaic calculation of “disposable income” as defined in § 1325(b)(2) was what Congress intended courts to employ when determining “projected disposable income” and the required plan payment amount in § 1325(b)(1)(B). . . . Treating “projected disposable income” as a stand-alone term or concept with a separate meaning from the defined term “disposable income” conflicts with the language and structure of § 1325(b). Significantly, Congress decided to place the definition of “disposable income” within the same subsection of § 1325 that requires a debtor, upon objection to confirmation, to pay all of his “projected disposable income” into the plan . . . . This language is quite clear and its placement in the same subsection makes its direct application to “projected disposable income” emphatic and unmistakable. If “projected disposable income” is given a separate and independent meaning from “disposable income,” it would appear that the defined term “disposable income” has no purpose within the subsection whatsoever. . . . Consequently, the word “projected” cannot modify the definition of “disposable income” in the dramatic fashion some courts have suggested without rendering the definition meaningless and irrelevant. . . . That the drafters retained the word “projected” in § 1325(b)(1)(B) makes logical grammatical sense in the context of that particular subsection. It is true that the sentence could be grammatically completed without the word “projected,” but the word is an acknowledgment that the disposable income that has been calculated to be received by unsecured creditors based on a single month, must be extended or projected over a series of months during the life of a chapter 13 plan. . . . [T]he phrase “projected disposable income” has the same meaning today as it did before the enactment of BAPCPA. . . . Congress simply decided upon a new way to calculate disposable income before projecting that figure into the plan.66
[25]

Courts adopting the mechanical approach determined CMI using Parts I–III of Official Form B22C67 and then found appropriate expenses and other deductions from CMI to arrive at disposable income in the remainder of Form B22C68 or in Schedule J to Official Form 6.69 There were minor variations within the mechanical school, but for the most part, these courts were consistent: CMI is the income side of the projected disposable income test; CMI does not change when disposable income is “projected” over the applicable commitment period; and “disposable income” is fixed by statute using § 1325(b)(2)(A) and (B)—for a debtor with CMI less than applicable median family income—or using § 707(b)(2)(A) and (B)—for a debtor with CMI greater than applicable median family income.70

[26]

In stark contrast to the “mechanical” approach, a majority of courts addressing § 1325(b) after BAPCPA concluded that “projected disposable income” means something different than “disposable income” projected over the applicable commitment period. Notwithstanding that CMI is specified as the income side of disposable income in § 1325(b)(2), these courts held that CMI is only a “presumption” or “starting point” in the calculation of disposable income. The majority courts interpreted the word “projected” to change the meaning of “disposable income,” freeing judges to be “forward-looking”—to recalculate the amount available to fund a Chapter 13 plan unbounded by the historical basis for CMI in § 101(10A). Many of these courts paid lip service to the calculation of CMI in Official Form B22C and then defaulted to the “current income” statement in Schedule I to Official Form 6. Some of these courts created hybrid income calculations using selected aspects of “current income” from Schedule I and exclusions from CMI in § 101(10A)(A)—for example, the exclusion of Social Security income.71 Many of these courts looked to the Statement of Current Expenditures in Schedule J to Official Form 6 for expense information; a few acknowledged that, with respect to a debtor with CMI greater than applicable median family income, expenses are specified differently in accordance with § 707(b)(2)(A) and (B)—requiring adjustments to Schedule J or abandonment of Schedule J altogether.

[27]

Representative of the majority or forward-looking courts was In re Slusher:72

Congress’ choice to use both “projected disposable income” and “disposable income” in the Code indicates an intent to apply different meanings to the two terms. . . . [W]hile “disposable income” may explicitly refer to the past, “projected disposable income” undeniably looks to the future. . . . Using just the debtor’s static historical income average and nothing else could lead to a projection unhinged from reality. As a result, this court must view the definition of “disposable income” not as a definition for the term “projected disposable income” within Section 1325(b)(1)(B), but only as a presumption regarding the meaning of that term. . . . [I]n certain circumstances, such as when a debtor gains or loses a job or when he or she receives an increase or decrease in pay immediately before filing bankruptcy, Form B22C is less authoritative and serves only as a starting point for an investigation that will include an examination of Schedules I and J. . . . [I]f this court reads Section 1325(b) to leave the judiciary no discretion, many otherwise feasible plans could no longer be confirmed, much to the detriment of creditors and debtors alike. . . . [F]or above-median debtors, “disposable income” as calculated by Form B22C is only a presumptive guide in any determination of “projected disposable income” as required by Section 1325(b)(1)(B).73

Along the same lines is this explanation by the Bankruptcy Appellate Panel for the First Circuit in In re Kibbe:74

We agree with the bankruptcy court that “projected disposable income” as set forth in § 1325(b)(1)(B) must be grounded in the Debtor’s anticipated income (but we say less the Income Exclusions) during the term of her plan. And we agree with the reasoning in [In re Jass, 340 B.R. 411 (Bankr. D. Utah 2006),] that Form B22C must at least be the starting point for any determination of “projected disposable income.” In the event that a debtor’s “current monthly income” as set forth by Form B22C is substantially the same as the actual current income at the time of confirmation of the plan, less the Income Exclusions, the inquiry begins and ends with Form B22C. But where, as here, the “current monthly income” amount is not true to the debtor’s actual current income, courts should assume that Congress intended that they rely on what a debtor can realistically pay to creditors through his or her plan and not on any artificial measure. Attaching the word “projected” to a historical calculation assumes, without justification, that a debtor’s circumstances will not change after the date of case commencement or during the plan commitment period. Life informs otherwise. Insofar as the term “disposable income” demands a look back and the term “projected” requires a look forward, the language is irreconcilable. One must give way to the other . . . . It would be inappropriate to give heed only to the historical perspective set forth in the term “disposable income,” as this would effectively write the term “projected” out of § 1325(b). . . . Rigid adherence to a debtor’s prepetition income history would commonly produce results at odds with both congressional purpose and common sense. . . . We hold that the income component of “projected disposable income” as set forth in § 1325(b)(1)(B) is the anticipated actual income of the Debtor, subject to the Income Exclusions, during the plan commitment period. That construction gives meaning and effect to each of the terms “current monthly income,” “projected,” and “disposable income.” . . . Where the income calculation of Form B22C comports with a debtor’s actual income at the time of confirmation and as reasonably anticipated for the plan commitment period, no further determination is necessary. . . . [W]here the debtor’s income at confirmation or as reasonably anticipated for the plan commitment period is materially different from the debtor’s “disposable income” as defined by § 1325(b)(2), the court must depart from the Form B22C calculation. The calculation of disposable income according to Form B22C can not be determinative of the debtor’s “projected disposable income” because it does not take into account the debtor’s circumstances as of the petition date or foreseeable changes in circumstances in income during the plan commitment period. Similarly, the figures set forth on Schedules I can also not be determinative because, although they reflect circumstances on the petition date, they ignore the new statutory definition of the term “disposable income” and fail as well to account for reasonably anticipated changes in the debtor’s circumstances after the petition date. If circumstances dictate that neither Form B22C nor Schedules I and J accurately portray the debtor’s income (less the Income Exclusions) projected over the plan commitment period, the bankruptcy court must make a fact-based determination at the time of confirmation, whether by way of the parties’ agreement or the taking of evidence. Said most directly, the object is not to select the right form, but to reach a reality-based determination of a debtor’s capabilities to repay creditors.75
[28]

Before the Supreme Court decided Hamilton v. Lanning, the courts of appeals decisions addressing the calculation of projected disposable income were split four to one: the Fifth, Seventh, Eighth and Tenth Circuits adopted various forms of the forward-looking approach; the Ninth Circuit mechanically followed the statute.

[29]

The Ninth Circuit was the first court of appeals to address the meaning of projected disposable income after BAPCPA, and in Maney v. Kagenveama (In re Kagenveama),76 the Ninth Circuit stated clearly that disposable income is calculated using the statutory formula in § 1325(b)(2) and (3). The debtor in Kagenveama had CMI greater than applicable median family income. Schedules I and J showed net monthly income of $1,523.89. In contrast, on Official Form B22C, the debtor calculated disposable income as negative $4.04. The plan proposed to pay $1,000 per month for a commitment period of three years. The Chapter 13 trustee objected that projected disposable income was miscalculated and that the applicable commitment period had to be five years.77

[30]

Citing Anderson v. Satterlee (In re Anderson),78 the Ninth Circuit concluded that “‘disposable income’ as defined in [§ 1325(b)(2)] to be projected out over the ‘applicable commitment period’ to drive the ‘projected disposable income’ amount is the most natural reading of the statute.”79 The court explained that “[t]here can be no reason for § 1325(b)(2) to exist other than to define the term ‘disposable income’ as used in § 1325(b)(1)(B).”80 Accordingly, “projected” is “simply a modifier of the defined term ‘disposable income.’”81 Giving meaning to every word in § 1325(b), projected disposable income means “disposable income” as defined in § 1325(b)(2) “projected” over the applicable commitment period. The Ninth Circuit found sound historical support for this reading of the statute:

“[P]rojected disposable income” has been linked to the “disposable income” calculation before BAPCPA. Any change in how “projected disposable income” is calculated only reflects the changes dictated by the new “disposable income” calculation; it does not change the relationship of “projected disposable income” to “disposable income.” Pre-BAPCPA, “projected disposable income” was determined by taking the debtor’s “disposable income” under § 1325(b)(2)(A) & (B), and projecting that amount over the “applicable commitment period.” Anderson, 21 F.3d 355, 357 (9th Cir. 1994). . . . Anderson shows that, prior to the enactment of BAPCPA, courts determined the debtor’s “disposable income” and then “projected” that sum into the future for the required duration of the plan when considering whether to confirm the plan. . . . In light of Anderson, we cannot read the word “projected” to be synonymous with the word “anticipated” in this context.82
[31]

With respect to In re Jass,83 In re Hardacre84 and other cases holding that the disposable income calculation on Form B22C was merely a “presumption” or “starting place,” the Ninth Circuit made the obvious point from statutory construction:

[N]o text in the Bankruptcy Code creates a presumptive correct definition of “disposable income” subject to modification based on anticipated changes in income or expenses. In fact, the textual changes enacted by BAPCPA compel the opposite conclusion. The revised “disposable income” test uses a formula to determine what expenses are reasonably necessary. . . . This approach represents a deliberate departure from the old “disposable income” calculation, which was bound up by the facts and circumstances of the debtor’s financial affairs.85
[32]

The Ninth Circuit then rejected the notion that the formulaic reading of projected disposable income produces an absurd result. The panel conceded that its reading of § 1325(b) “produces a less favorable result for unsecured creditors.”86 But this outcome was

not absurd . . . . [W]e will not de-couple “disposable income” from the “projected disposable income” calculation simply to arrive at a more favorable result for unsecured creditors, especially when the plain text and precedent dictate the linkage of the two terms. . . . If the changes imposed by BAPCPA arose from poor policy choices that produced undesirable results, it is up to Congress, not the courts, to amend the statute.”87
[33]

The ink was hardly dry on Kagenveama when both the Eighth and Tenth Circuit Courts of Appeals adopted the contrary approach to projected disposable income. In Coop v. Frederickson (In re Frederickson),88 the Eighth Circuit rewrote § 1325(b)—leaping over the words of the statute to find legislative intent for a test in which “disposable income” is only the starting point. Acknowledging the split among bankruptcy courts, the Eighth Circuit found that § 1325(b) “is not clear at all” and “when the text leads to a result that is seemingly at odds with the congressional intent of the text . . . the plain language is not conclusive.”89 From there, the Eighth Circuit constructed new content for projected disposable income that it characterized as “more closely align[ed] with reality”:

[W]e adopt the view shared by many bankruptcy courts that a debtor’s “disposable income” calculation on Form 22C is a starting point for determining the debtor’s “projected disposable income,” but that the final calculation can take into consideration changes that have occurred in the debtor’s financial circumstances as well as the debtor’s actual income and expenses as reported on Schedules I and J. . . . This approach realistically determines how much a debtor can afford to pay his creditors and maximizes the amount the debtor must pay to his unsecured creditors.90
[34]

The Eighth Circuit brushed aside Kagenveama, tersely remarking, “With all due respect to the Ninth Circuit’s opinion, we believe that the approach we have taken will more fully accomplish that which Congress intended to achieve through the enactment of BAPCPA.”91

[35]

Also rejecting Kagenveama and embracing Frederickson, the U.S. Court of Appeals for the Tenth Circuit in Hamilton v. Lanning (In re Lanning)92 held that projected disposable income was a “forward-looking” calculation in which the starting point for the income side is presumed to be current monthly income as defined in § 101(10A)(A)(i) but that this presumption or starting point can be overcome by a showing of “substantial change in circumstances.” The Tenth Circuit chided that the “mechanical approach” in Kagenveama would “effectively foreclose bankruptcy protection to debtors like Ms. Lanning, who lack adequate income going into the commitment period to pay the amount of disposable income on Form B22C, while at the same time permitting above-median debtors who have greater income at the time of plan confirmation to pay less to unsecured creditors than they are able to.”93 Lanning eventually made its way to the Supreme Court.94

[36]

In decisions three days apart, the Fifth and Seventh Circuits both adopted the forward-looking approach from Frederickson and Lanning but with some notable differences and conditions. In Nowlin v. Peak (In re Nowlin),95 the Fifth Circuit held that “disposable income”calculated under § 1325(b)(2) multiplied by the applicable commitment period is “presumptively” the debtor’s “projected disposable income” but that any party “may rebut this presumption by presenting evidence of present or reasonably certain future events that substantially change the debtor’s financial situation.”96 The Fifth Circuit found in the word “projected” that “future income and expenses based on present data, including evidence extrinsic to that used in the calculation of ‘disposable income’ under § 1325(b)(2),” are included in the calculation of projected disposable income.97 The Fifth Circuit offered this standard by which bankruptcy judges should assess the certainty of future events for projected disposable income test purposes:

[F]uture events must be reasonably certain or else the task of projecting disposable income may stray too far from the statutorily defined starting point. “Project[ing]” is not speculating, and must be based on known facts. Future events need not, however, be absolutely certain. . . . [A] bankruptcy court may consider reasonably certain future events when evaluating a Chapter 13 plan for confirmation under § 1325.98
[37]

Three days later, Judge Posner, speaking for the Seventh Circuit in In re Turner,99 embraced Frederickson and Lanning but cabined the use of nonstatutory factors in the determination of projected disposable income. In Turner, the plan abandoned a house to the mortgagee. The debtor, following the statutory instruction at § 707(b)(2)(B)(iii), deducted the monthly mortgage payment in the calculation of disposable income. Judge Posner found this inconsistent with the objective of a Chapter 13 bankruptcy—“to balance the need of the debtor to cover his living expenses against the interest of the unsecured creditors in recovering as much of what the debtor owes them as possible.”100 With respect to the “forward-looking” approach in Frederickson and Lanning, Judge Posner had this to say:

Although some judges . . . call this the “forward-looking” approach, bankruptcy judges must not engage in speculation about the future income or expenses of the Chapter 13 debtor. That would unsettle and delay the Chapter 13 process as well as exaggerate how accurately a person’s economic situation in five years can be predicted. But in this case, there is no speculation; all that is at issue is a fixed debt that we know will disappear before the Chapter 13 plan is approved.101
[38]

The Fifth, Seventh, Eighth and Tenth Circuits served up a jumble of confusing statutory constructions. The “substantial change in circumstances” standard in the Tenth Circuit’s Lanning appears nowhere in § 1325(b) as amended by BAPCPA. In the Eighth Circuit, it’s a “changed circumstance”—without the adjective—and actual income and expenses are in the mix without conditions. In the Seventh Circuit, to be “forward-looking” a bankruptcy judge must not speculate but can modify the statutory calculation based on “undisputed information” such as “a fixed debt that we know will disappear before the Chapter 13 plan is approved.” In the Fifth Circuit, only “present or reasonably certain future events that substantially change the debtor’s financial situation” figure into projected disposable income. The Fifth Circuit’s invitation to use “evidence extrinsic to that used in the calculation of ‘disposable income’ under § 1325(b)(2)” was a wholesale abrogation of what BAPCPA did to the projected disposable income test.

[39]

There is a “special circumstances” exception to the presumption of abuse in § 707(b)(2)(B), but in a Chapter 13 case, special circumstances probably only apply to the expense side of the projected disposable income test through § 1325(b)(3) and then only for a debtor with CMI greater than applicable median family income.102 In other words, the “substantial change in circumstances” test in Lanning was cut from whole cloth by the Tenth Circuit and overlaid upon a different test actually in the statute. It is odd that the Tenth Circuit applied a substantial change in circumstances standard to the income side of the projected disposable income test when the Bankruptcy Code itself prescribes a “special circumstances” exception only with respect to expenses.

[40]

The Fifth, Seventh, Eighth and Tenth Circuits missed altogether that BAPCPA elsewhere provides a different mechanism for adjusting the income side of the projected disposable income test. Detailed below,103 § 101(10A)(A) focuses the CMI calculation on the six months before the month in which the petition is filed. But, under § 101(10A)(A)(ii), when the debtor does not file the Schedule of Current Income—Schedule I to Official Form 6—the CMI calculation is time-shifted to the six- month period ending on “the date on which current income is determined by the court.”104 By not filing Schedule I, a Chapter 13 debtor whose income has changed between the six months before the petition and the effective date of the plan can control the timing of the CMI calculation to more realistically reflect actual income at confirmation. This time-shifting mechanism in the statute undermines the logic of the “forward-looking” fix in Frederickson, Lanning, Nowlin and Turner.

[41]

Other circuit and BAP decisions further tangled the web of projected disposable income jurisprudence leading up to the Supreme Court’s review in Lanning. Citing Nowlin from the Fifth Circuit, in McCarty v. Lasowski (In re Lasowski),105 the Eighth Circuit morphed the “changes” it considered in Frederickson into “reasonably certain” changes in financial circumstances that should be taken into account to determine projected disposable income. In Lasowski, it was “reasonably certain” that the debtor would pay off a 401(k) retirement loan106 during the Chapter 13 plan, and the Eighth Circuit held that the calculation of projected disposable income had to account for the payoff of that retirement loan. In Lasowski, the debtor’s actual obligation to make payments on the retirement loan at confirmation was a known amount, but because the loan would be paid off before the completion of other payments under the plan, the Eighth Circuit panel held that calculation of projected disposable income included adjusting for the payoff.

[42]

Two weeks later, a different panel of the Eighth Circuit decided eCast Settlement Corp. v. Washburn (In re Washburn).107 In Washburn, the debtor had CMI greater than applicable median family income and took the expense deduction allowed by § 707(b)(2)(A)(ii)(I) for the IRS Local Standards Transportation Ownership Costs108 for a car that was free of debt or lease.109 There was no lack of certainty in Washburn: there was no car note. Citing Fifth Circuit110 and Eleventh Circuit111 authority, a majority of the Eighth Circuit panel in Washburn held that the debtor was entitled to a Local Standards Transportation Ownership Costs expense deduction because it was an “allowance,” not an actual expense. Acknowledging Frederickson and Lasowski, the Washburn panel explained: “Unlike the facts of Lasowski, where it was reasonably certain that the debtor would fully pay off a loan from her 401(k) retirement account during the period of plan administration, it is by no means clear that the present debtor’s future vehicle payments can be deemed ‘reasonably certain.’”112 The panel in Washburn “leave[s] for another day the question of whether the requisite certainty is present when addressing questions of vehicle expenses.”113

[43]

So, what were the rules for “projecting” disposable income in the Eighth Circuit after Frederickson, Lasowski and Washburn? The “speculation” in Washburn could only be with respect to ownership expenses for transportation in the future. It was certain in Washburn that at confirmation the debtor did not have car debt or lease expense. The enigmatic reservation quoted above converts the current certainty of no car debt expense into the speculative uncertainty whether the debtor will have a car loan or lease payment in the future. Was Washburn backwards of the logic announced in Frederickson and Lasowski? When we look “forward” in the Eighth Circuit, we know that bankruptcy judges have discretion to consider changes in financial circumstances, but we also know that “reasonably certain” does not include the actual nonexistence of debt. How would bankruptcy practitioners in the Eighth Circuit apply these rules in the next case? What does forward-looking mean when the circuit court of appeals allows a nonexistent expense like the car ownership allowance in Washburn?

[44]

Ironically, after Kagenveama, the Ninth Circuit went exactly opposite to the Eighth—disallowing the Transportation Ownership Costs that the Eighth Circuit allowed in Washburn. In Ransom v. MBNA America Bank, N.A. (In re Ransom),114 the debtor deducted from CMI $471 a month—the amount of Transportation Ownership Costs specified by the IRS at the time.115 Without mention of its own decision in Kagenveama, the Ninth Circuit held in Ransom that the Ownership Costs component of the Local Standards for Transportation was not allowable because “an ‘ownership cost’ is not an ‘expense’—either actual or applicable—if it does not exist, period. Ironic it would be indeed to diminish payments to unsecured creditors in this context on the basis of a fictitious expense not incurred by a debtor.”116

[45]

There is, indeed, “irony” here. The Eighth Circuit, a “forward-looking” circuit, allowed a Transportation Ownership Costs expense for a debtor who owned a car free of debt, and a “mechanical approach” circuit—the Ninth Circuit after Kagenveama—disallowed the very same “fictitious expense.” One of these courts is undoubtedly on the wrong track. Detailed below,117 the Supreme Court accepted certiorari in Ransom118 just before it decided Lanning.

[46]

Ransom can be read to allow expense deductions to Chapter 13 debtors with CMI greater than applicable median family income only when an expense “exists.” This makes nonsense of the use of the words “applicable” and “actual” in § 707(b)(2)(A)(ii)(I) and promotes the indigestible peppercorn theory of construction: if any dollar amount of expense “exists” within a category of expense, then the debtor gets the entire amount specified by the IRS in a National Standard119 or Local Standard.120 In other words, a debtor with one $50 payment left on a used car gets an expense deduction of $29,760 (60 x $496),121 and a debtor unlucky enough to have paid off the car note gets no Ownership Costs deduction at all. After Ransom, it is malpractice in the Ninth Circuit to bring a debtor into Chapter 13 with an unencumbered car.

[47]

And what do we make of this confusing confession by the Ransom panel:

        The “correct” answer to the question before us, which the courts have been struggling with for years–at the unnecessary cost of thousands of hours of valuable judicial time–depends ultimately not upon our interpretation of the statute, but upon what Congress wants the answer to be. We would hope, in this regard, that we the judiciary would be relieved of this Sisyphean adventure by legislation clearly answering a straightforward policy question: shall an above-median income debtor in chapter 13 be allowed to shelter from unsecured creditors a standardized vehicle ownership cost for a vehicle owned free and clear, or not? Because resolution of this issue rests with Congress, we have taken the unusual step of directing the Clerk of the Court to forward a copy of this opinion to the Senate and House Judiciary Committees.122
[48]

In the course of two pages in Ransom, “‘statutory language, plainly read’” is revealed to be a “Sisyphean adventure,” the resolution of which “rests with Congress.” Perhaps the real irony here is that the Ransom panel made the policy choice that it says rests with Congress. If the statutory language is plain—as the Ransom panel insists—then why the plea for clarity from Congress? If the language is not plain—because the policy choice is obscure—then the Ransom panel used plain meaning as a metaphor for judicial legislation.

[49]

If Ransom indicates that the Ninth Circuit itself was not at peace with the mechanical approach in Kagenveama, after Ransom the Bankruptcy Appellate Panel for the Ninth Circuit simply trashed Kagenveama altogether and replaced it with an unfamiliar test for projected disposable income. In two cases decided the same day by the same split panel, the BAP for the Ninth Circuit considered whether a Chapter 13 debtor with CMI greater than applicable median family income could deduct secured debt expenses for a wholly unsecured mortgage that will be stripped off during the case or for a mortgage secured by property that will be surrendered during the case. In American Express Bank v. Smith (In re Smith),123 the BAP held the debt on surrendered collateral could not be deducted as an expense. Yarnall v. Martinez (In re Martinez)124 held the same with respect to a wholly unsecured lien that will be stripped off.125

[50]

The startling basis for Smith and Martinez was the BAP’s conclusion that the Ninth Circuit’s interpretation of projected disposable income in Kagenveama was dicta with respect to the determination of expenses deductible under § 707(b)(2)(A) and (B) for a debtor with CMI greater than applicable median family income. This was odd given that the Ninth Circuit in Kagenveama quite specifically rejected the “forward-looking” and “presumptive” schools with respect to the meaning of “projected” in § 1325(b)(1) and instead held that the statutory formula in § 1322(b)(2)–(3) determined projected disposable income. In Smith and Martinez, the BAP found the absence of “analysis or discussion” in Kagenveama to be license for the BAP to formulate its own rules for determining the allowance of expenses under the very Code sections addressed by the Ninth Circuit in Kagenveama.

[51]

Citing Ransom, the BAP in Smith and Martinez constructed a twisted version of the “forward-looking” analysis rejected in Kagenveama. According to the BAP, expenses for projected disposable income test purposes are determined using a forward-looking two-step process. First, bankruptcy courts must determine whether an expense is “reasonably necessary” for the maintenance and support of the debtor or a dependent of the debtor. Then the bankruptcy court must determine the amount of that expense in accordance with § 707(b)(2).

[52]

In the run-up to the Supreme Court’s decision in Lanning, the combination of Kagenveama, Ransom, Smith and Martinez created quite a jumble in Chapter 13 confirmation jurisprudence in the Ninth Circuit. A few months after the BAP reported Smith and Martinez, a bankruptcy court in Montana incisively explained why Smith and Martinez were inconsistent with Kagenveama:

The Trustee asks this Court to substitute Smith’s two-part analysis, first to consider under § 1325(b)(2) whether expenses are reasonably necessary for the maintenance and support of debtors and their dependents on a real time basis, and only then looking backwards under § 1325(b)(3) to determine “amounts reasonably necessary.” But the phrase “amounts reasonably necessary” is exactly the same in § 1325(b)(2) and (b)(3), and the plain language of § 1325(b)(3) states that “[a]mounts reasonably necessary” under [(b)](2) “shall be determined” in accordance with the means test of § 707(b)(2). In this Court’s view § 1325[(b)](3) must control. . . . This Court applies a mechanical test in which its discretion to determine the reasonableness of a debtor’s expenses in calculating disposable income has been curtailed by BAPCPA. . . . In Kagenveama the Ninth Circuit rejected case authority which held that “projected disposable income” is not related to “disposable income” . . . . The Ninth Circuit wrote that the line of authority set forth In re Pak, 378 B.R. 257, 263, 268 (9th Cir. BAP 2007), and In re Jass, 340 B.R. 411, 415 (Bankr. D. Utah 2006), “‘is unpersuasive . . . . The revised “disposable income” test uses a formula to determine what expenses are reasonably necessary.’ . . . ‘If Debtor is an above median income Debtor then the mechanical or formula test applies and this Court does not examine separately the reasonableness of the expenses, but rather pursuant to § 1325(b)(3) the Debtor’s expenses must be determined under the “Means Test” of § 707(b)(2)(A) and (B).’”126
[53]

Things were just as muddled in the Sixth Circuit. Without controlling authority from the circuit court itself, the BAP for the Sixth Circuit rejected Kagenveama, sided with the “forward-looking” courts but then agreed with Ransom—a fundamentally confusing set of outcomes.

[54]

In Petro v. Hildebrand (In re Petro),127 the BAP for the Sixth Circuit concluded that “projected disposable income” for Chapter 13 debtors with CMI greater than applicable median family income was not constrained by the statutory definition of “disposable income” but included “forward-looking” changes in income or expenses not accounted for in § 707(b)(2)(A) and (B). The debtor in Petro suffered unemployment during the six-month calculation period for CMI in § 101(10A), and the BAP allowed consideration of the debtor’s actual ability to pay unsecured creditors.

[55]

On the heels of Petro, a different panel of the same Sixth Circuit BAP in Hildebrand v. Thomas (In re Thomas)128 considered a debtor who claimed the deduction for scheduled and contractually due payments on debt secured by collateral to be surrendered through the plan. The BAP in Thomas first held that “disposable income” included the statutory deduction in § 707(b)(2)(A)(iii) for amounts scheduled as contractually due to secured creditors at the petition notwithstanding that the plan surrendered collateral. But the BAP then cited Petro for the proposition that projected disposable income required consideration of future changes in income and expenses—including that collateral will be surrendered through the plan. The result in Thomas was a boomerang: disposable income was reduced by amounts scheduled as contractually due to the secured creditor to whom collateral would be surrendered after confirmation, but “projecting” that disposable income forfeited the secured debt deduction because of surrender through the plan.

[56]

The combination of holdings in Petro and Thomas ascribed to Congress the odd intent that upon objection to confirmation every Chapter 13 debtor with CMI greater than applicable median family income must undertake the minutely detailed and complicated “disposable income” calculation in accordance with § 707(b)(2)(A) and (B) based on the facts at the petition, but that calculation is then trumped by unspecified, nonstatutory “future” changes in income or expenses.

[57]

Prior to the Supreme Court’s decision in Lanning, there were countless variations of the “forward-looking” approach from the bankruptcy courts and district courts for obvious good reason: once the statutory props were out of the way, the creativity of judges formed the only limit on projected disposable income. The stated goal of BAPCPA to reduce the discretion of bankruptcy judges in consumer bankruptcy cases129 was turned on its head—discretion ruled the projected disposable income test in the majority line of cases.

[58]

Courts rejecting the mechanical approach offered an undisciplined collection of alternative methodologies for calculating projected disposable income. Some courts described the CMI calculation based on § 101(10A) and the disposable income formula based on § 1325(b)(3) as a “rebuttable presumption” of the debtor’s projected disposable income.130 Others called the statutory calculations a “starting point.”131 A few seemed to use both phrases interchangeably.132 Still others said the CMI and disposable income calculations were “important,”133 “initial”134 or a “first look”135 at projected disposable income. Practitioners were left to divine whether the same evidence that might overcome a “starting point” would also burst a “presumption.”136 Burdens of proof became important—one court applying Lanning before it went to the Supreme Court held that the debtor bears the burden to prove that a “substantial change in circumstances” has not occurred when plan funding is based on less income than that shown on Official Form B22C.137

[59]

Bankruptcy courts writing their own versions of the projected disposable income test did not agree on what had to happen before it was appropriate to abandon the statutory formula. As quoted above, the Tenth Circuit in Lanning allowed a “substantial change in circumstances” to undo the statutory calculation of CMI.138 In re Phillips139 allowed “a change or reasonably anticipated change” to do the trick—nothing there about “substantial.” When “changes in circumstances are discrete and easily calculable by simple arithmetic,” the court in In re Davis140 would adjust Official Form B22C to determine projected disposable income. When the statutory calculation leads to a result that is “seriously distorted” based on “weighty considerations,” the statutory calculation can be disregarded to determine projected disposable income in the Eastern District of Virginia.141 Under In re Romero,142 a debtor’s “actual circumstances” are properly accounted for to project disposable income—without regard to changes in circumstances. In In re Lisenko,143 when disposable income “differs markedly” from Schedule I and J, further analysis is required. In In re Warren,144 it was an “expectancy of the future” that altered the statutory calculation of disposable income.145 One court honestly stated that the statutory formula controls unless it won’t work: if the payment to unsecured creditors required by the statute renders the plan not feasible, then “the result mandated by § 1325(b) will not be followed.”146

[60]

Some of the forward-looking courts started the income side of the projected disposable income test with Schedule I from Official Form 6.147 Others started with “actual” income—sometimes adjusted and sometimes without the specific exclusions from CMI mentioned in § 101(10A).148 Many of the majority decisions cite each other but then made adjustments that significantly changed outcomes for litigants.149 In the name of preventing “absurd” outcomes, the forward-looking courts cultivated a minefield of uncertainty.

[61]

Some of the majority decisions are truly a little bit pregnant by picking and choosing parts of the statute to apply. In re Kibbe,150 In re Upton151 and others152 rejected the statutory definition of CMI in § 101(10A) as the platform for the income side of the disposable income test in § 1325(b)(2)153 but then applied exclusions from CMI in § 101(10A) as exclusions from “actual” income in the tests substituted for the statutory version. The result is disconcerting. Congress didn’t just exclude Social Security income from the income side of disposable income in § 101(10A)(B); Congress comprehensively redefined the income side of disposable income as CMI. For most debtors, CMI is rooted in income history during the six months before the filing of the petition with specific statutory exclusions.154 Cherry-picking the text is a shaky form of statutory construction.

[62]

The mathematical calculations required by the forward-looking decisions are difficult to explain and difficult to apply. For example, some decisions in the majority school abandoned the statutory calculation of CMI and disposable income in favor of the pre-BAPCPA use of Schedules I and J to Official Form 6.155 Of course, these older forms were not designed for that purpose and do not contain the requisite information.156 Some of the majority decisions cut across forms to use Schedule I to determine the income side of the projected disposable income test but then, for a debtor with CMI greater than applicable median family income, these courts used the expense deductions allowed by § 707(b)(2)(A) and (B).157 One court purporting to apply the “forward-looking” methodology concluded that the income side of the disposable income test uses CMI from § 101(10A) but the expense side uses Schedule J with adjustments.158 Some majority courts switched back and forth between and among the statutory provisions and forms depending on circumstances.159 And then there are forward-looking courts that seemed to reject reliance on any specific forms or statutory formula.160

[63]

These conceptual differences affected whether courts considered the content of the plan and other postpetition events to determine projected disposable income. For example, some “forward-looking” courts required debtors to “step up” payments to unsecured creditors when car loans, car leases, pension loans or a domestic support obligation would be paid off in fewer months than the applicable commitment period.161 Other courts read the statute to adjust the entitlement of unsecured creditors within the § 1325(b)(2) and (3) formula for the payoff of some debts but not all debts; thus it was not appropriate to look outside the statute to account for financial events during the life of the case.162

[64]

This issue comes into particular focus with respect to secured debt and collateral that the debtor proposes to surrender or lien-strip through the plan. For a Chapter 13 debtor with CMI greater than applicable median family income, § 707(b)(2)(A)(iii) permits a deduction from CMI for average monthly payments on account of secured debts scheduled as contractually due during the 60 months of the plan.163 There is much disagreement whether this expense deduction is available when the plan proposes to surrender or strip off the lien on the collateral securing the claim.164 Courts following the statute generally concluded that the deduction for contractually scheduled secured debt was available without regard to surrender or lien stripping because there is no statutory link between the deduction in § 707(b)(2)(A)(iii) and events that might occur at or after confirmation.165 “Forward-looking” courts reached the contrary conclusion that a contemplated future event such as surrender or lien stripping through the plan traveled backwards to change the calculation of projected disposable income.166

[65]

As you can see, prior to the Supreme Court’s decision in Lanning, the “forward-looking” courts read “projected” disposable income in § 1325(b)(1) as fundamentally different from “disposable income” in § 1325(b)(2). Of course, there is an extra word here, and ordinary canons of statutory construction require courts to find meaning for “projected.” But the issue—before and after Lanning—is not whether projected disposable income means something different than disposable income; rather, what does the word “projected” mean in this context?

[66]

This is not a study in isolation. The word “projected” has been part of the phrase “projected disposable income” in § 1325(b) since 1984. Under prior law, the same three-word phrase was the subject of relevant judicial interpretation. Under prior law, disposable income was determined by facts and circumstances at or about the effective date of the plan. There was no competing backward-looking provision such as CMI in new § 101(10A). The word “projected” in § 1325(b) of prior law was litigated in many courts because trustees were uncertain whether the determination of “disposable income” at confirmation was “projected” for the life of the plan or whether “projected” was an invitation to recalculate disposable income as circumstances changed after confirmation.

[67]

In the leading reported decision on the subject, Anderson v. Satterlee (In re Anderson),167 the United States Court of Appeals for the Ninth Circuit concluded that “projected” meant calculating disposable income at the time of confirmation and applying that amount for the duration of the plan. In Anderson, the Ninth Circuit rejected the notion that disposable income would be recalculated periodically after confirmation to “project” disposable income anew as income or expenses changed. The Ninth Circuit observed in Anderson that modification after confirmation under § 1329168 was the mechanism Congress intended when income or expenses changed after confirmation in a pre-BAPCPA Chapter 13 case.

[68]

The vast majority of reported cases prior to BAPCPA reached the same conclusion as Anderson—that “projected” in projected disposable income meant calculating disposable income and then applying that amount over the life of the plan.169 “Projected,” in this methodology, did not change the meaning of “disposable income,” it simply multiplied disposable income by the number of months of the plan.

[69]

Under pre-BAPCPA law, courts did not redefine “income” when projecting disposable income over the life of a plan. But this is exactly what a majority of courts have done to new § 1325(b). The forward-looking courts have found in the word “projected” Congressional intent to change the meaning of “disposable income.” The majority courts substituted “actual” income at the petition, at the effective date of the plan or at some other moment for CMI in § 1325(b)(2). Cases like Slusher and Kibbe missed the critical statutory interpretation point: projected was not changed; the amount that is projected was changed, especially with respect to debtors with CMI greater than applicable median family income.

[70]

There were other, perhaps less compelling, reasons to question the forward-looking interpretation of § 1325(b)(1). Reading into “projected” that bankruptcy courts can depart from the statutory definitions of CMI and disposable income is inconsistent with other parts of § 1325(b) as amended by BAPCPA. Departures from CMI and from the expenses allowed by § 1325(b)(2)(A) and (B) or § 707(b)(2)(A) are explicitly allowed by the statute itself when a debtor with CMI greater than applicable median family income proves “special circumstances” consistent with § 707(b)(2)(B).170 Why would Congress write this escape hatch into the statute with respect to Chapter 13 debtors with CMI greater than applicable median family income if the word “projected” conveyed that bankruptcy courts are not bound by § 101(10A) or by § 1325(b)(2) with respect to the disposable income calculation for all debtors?

[71]

Disposable income appears in § 1322(b)(10) and in § 1129(a)(15)(B) in contexts that do not suggest “projected” defines a new concept. In § 1322(b)(10), the word “projected” is missing altogether, and the reference to “disposable income” seems intended to capture all of the amounts available to pay unsecured claims in a Chapter 13 case. The word “projected” does appear in connection with disposable income in an individual Chapter 11 case in § 1129(a)(15)(B) with the parenthetical reference, “as defined in section 1325(b)(2)”—again suggesting that “projected” does not signal a recalculation of income or expenses for purposes of determining disposable income for an individual Chapter 11 debtor.171

[72]

In the run-up to the Supreme Court’s decision in Lanning, the debate about the meaning of “projected” deteriorated into an unnecessary “choice” between Official Form B22C and Schedules I and J to Official Form 6. There is no Official Form that accurately implements the projected disposable income test.172 In part, this is because it is impossible to coherently reduce to a form a statute as convoluted as § 1325(b). Official Form B22C is flawed in some fundamental ways and in many technical respects.173 Schedules I and J to Official Form 6174 were never accurate of the disposable income calculation before BAPCPA and cannot serve the more difficult role of implementing the new statute. There is no Official Form that permits Chapter 13 debtors to consistently perform the projected disposable income calculation after BAPCPA, and the courts have been forced in case after case to work around the forms, to hybridize the forms and in some cases, to torture the statute in an unproductive effort to make the statute and the forms work together. But the real issue is not which form to use; the real issue is whether to follow the statute or fix it. The Supreme Court answered that question in Lanning.

[73]

On June 7, 2010, an eight-to-one majority of the U.S. Supreme Court endorsed the “forward-looking” approach to determine projected disposable income at confirmation in Chapter 13 cases in Hamilton v. Lanning.175 Perhaps more importantly, the Supreme Court answered the fundamental question framed by Tom Waldron and Neil Berman:176 will the Supreme Court fix the mess that BAPCPA made of the projected disposable income test; or will it tell us to follow the crooked path set by Congress? Now we know. Eight Justices have signed on to be fixers.

[74]

Lanning was about the income side of the projected disposable income test in § 1325(b). Narrowly drawn, the issue was, how do you determine projected disposable income for a Chapter 13 debtor whose income fell between the six-month calculation period for CMI in § 101(10A) and confirmation. Ms. Lanning received a one-time buyout from her employer during the six months before her Chapter 13 petition, then got a new job at lower pay. The trustee objected to confirmation when the plan was based on Ms. Lanning’s reduced income and did not account for CMI as required by the statute.

[75]

Although it was clear that the expense side of the projected disposable income calculation was not at issue before the Tenth Circuit in Lanning, the Supreme Court granted certiorari more broadly, “to decide how a bankruptcy court should calculate a debtor’s ‘projected disposable income.’”177 Describing this question as a tension between the “mechanical approach” and the “forward-looking” approach, Justice Alito stated for the majority, “We hold that the ‘forward-looking approach’ is correct.”178 The meat on those bones lies in these statements from the majority opinion:

Congress did not amend the term “projected disposable income” in 2005, and pre-BAPCPA bankruptcy practice reflected a widely acknowledged and well-documented view that courts may take into account known or virtually certain changes to debtors’ income or expenses when projecting disposable income.
        . . . .
        . . . As the Tenth Circuit recognized in this case, a court taking the forward-looking approach should begin by calculating disposable income, and in most cases, nothing more is required. It is only in unusual cases that a court may go further and take into account other known or virtually certain information about the debtor’s future income or expenses.
        . . . .
        . . . We decline to infer from § 1325’s incorporation of § 707 that Congress intended to eliminate, sub silentio, the discretion that courts previously exercised when projecting disposable income to account for known or virtually certain changes.
        . . . .
        . . . [W]e hold that when a bankruptcy court calculates a debtor’s projected disposable income, the court may account for changes in the debtor’s income or expenses that are known or virtually certain at the time of confirmation.179
[76]

Justice Alito recites that the Tenth Circuit began the determination of projected disposable income by “calculating disposable income.” A quick look at the Tenth Circuit’s opinion reveals that this was the “mechanical” calculation found in §§ 1325(b)(2), (b)(3) and 707(b)(2) for a debtor with CMI greater than applicable median family income. The Tenth Circuit then held that the “presumption” in favor of the amount yielded by the mechanical calculation of disposable income could be rebutted by evidence of “a substantial change in the debtor’s circumstances.”180

[77]

But the Supreme Court opinion in Lanning conspicuously did not adopt the Tenth Circuit’s formulation. Within Justice Alito’s decision, the test is twice described in different terms. As just quoted, at one place Justice Alito states: “[i]t is only in unusual cases” that the court may account for “known or virtually certain information” about future income or expenses.181 There is no equation of an “unusual case” with “substantial change.” Elsewhere, Justice Alito states, “[W]e hold that when a bankruptcy court calculates a debtor’s projected disposable income, the court may account for changes in the debtor’s income or expenses that are known or virtually certain at the time of confirmation”—no mention of even “unusual” cases here.182

[78]

Justice Alito’s use of the word “unusual” is enigmatic. “Unusual” could signal that Justice Alito believed that there will be few cases in which known or virtually certain information about a debtor’s future income or expenses will lead away from the “mechanical” calculation of disposable income in §§ 1325(b), 101(10A) and 707(b). Or “unusual” could signal that not just any “change” triggers departure from the statutory calculation of disposable income. This latter interpretation—a narrowing notion of “change”—would avoid creating too many “unusual” cases. This was certainly the Tenth Circuit’s view of the forward-looking approach to projecting disposable income, but the modifier—“substantial”—was not adopted anywhere in Justice Alito’s opinion.

[79]

And there is no clue from Justice Alito whether the threshold “change” need only be quantitative—a known amount of dollars, for example—or whether something more or different is required—a change in employment status, ownership or the existence or validity of a lien, for example. This distinction will be critical when the “change” involves a difference between the numbers that appear on Form B22C and the numbers on Schedules I and J to Form 6—a difference that may or may not reflect any fundamental “change” in the debtor’s circumstance—or when the “change” involves a secured debt deduction allowed debtors with CMI greater than applicable median family income by § 707(b)(2)(A)(iii) that will disappear at or after confirmation because of surrender or lien avoidance.183

[80]

Bankruptcy practitioners know that there is variance in virtually every case between the statutory calculation of disposable income in §§ 1325(b)(2), (b)(3), 101(10A) and 707(b)(2) and the actual income and expenses of Chapter 13 debtors. It seems unlikely that Justice Alito intended that every variance would produce an unusual case. Based on a RAND study, the Executive Office of the U.S. Trustee reported that, on average, Chapter 13 debtors with CMI greater than applicable median family income were allowed under § 707(b)(2)(A) $490 per month in expenses in excess of actual expenses reported by those same debtors.184 Is $490 per month enough to make the average case “unusual”? If not just any known or virtually certain change in income or expenses is sufficient to trigger departure from the mechanical calculation of disposable income, then what metrics determine which changes count?

[81]

The “discretion . . . previously exercised” by courts before BAPCPA to consider known or virtually certain changes in a debtor’s income or expenses was not confined to “unusual” cases or changes of any particular kind or magnitude. In the footnotes in Lanning, there is some discussion about pre-BAPCPA cases that made or refused to make adjustments to disposable income based on possible changes in future income or expenses. These footnotes convey that in the pre-BAPCPA world, “speculative” or “hypothetical” changes in income or expenses were not included in the projected disposable income calculation. The problem ahead for bankruptcy courts and practitioners is too many known and virtually certain “changes” in income or expenses.

[82]

Adoption of the forward-looking approach in Lanning may quickly haunt the eight justices who joined the majority opinion. At this writing, already on deck is Ransom v. MBNA, America Bank, N.A. (In re Ransom).185 As mentioned above, in Ransom, the Ninth Circuit concluded that a debtor with CMI greater than applicable median family income cannot deduct the statutory allowance for Local Standards Transportation Ownership Costs when a car is owned free of debt or lease. Ransom is about what Lanning was not: the expense side of the projected disposable income calculation.

[83]

What will the Supreme Court do with Ransom in light of Lanning? Ransom should begin with the allowance for Local Standards Transportation Ownership Costs in § 707(b)(2)(A)(ii)(I). Is it “known or virtually certain” that the debtor will not have transportation ownership expense when the debtor’s car is owned free of debt or lease? Is an unencumbered car the “unusual” case that permits a bankruptcy court to exercise discretion and take into account that an expense allowed by the statute in calculating disposable income is not actually incurred by the debtor at or after confirmation?

[84]

If “change” in Lanning means a difference in status or ownership between the calculation of disposable income and confirmation, then there is no change for Lanning purposes in Ransom: the debtor owned a car for disposable income purposes at the petition and still owns the car at and after confirmation. But if “change” means that the expenses allowed by §§ 1325(b)(3) and 707(b)(2)(A) to determine disposable income are “different” from the actual expenses the debtor will experience after confirmation, then there is a change for Lanning purposes: the expense for ownership of an unencumbered car is known or virtually certain to be different than the Local Standards Transportation Ownership Costs allowance.

[85]

This second notion of “change” is very slippery: §§ 1325(b) and 707(b)(2) allow many expenses in the calculation of disposable income that may not be present or that may be present in different amounts at confirmation and thereafter. At this writing, the Local Standards Transportation Ownership Costs allowance for one car is $496 per month.186 It will be sheer coincidence for a Chapter 13 debtor’s actual monthly car note to be exactly $496. The actual “difference” will be “known” from an easy look at Form B22C and Schedule J to Form 6. Is that difference a change for Lanning purposes? To take a silly example, at least according to the IRS, the National Standards for Food, Clothing and Other Items include personal care products such as feminine hygiene products. Does Lanning require/permit examination of the expenses claimed by male debtors to eliminate the “change” between the National Standards allowance and actual expenses?

[86]

There is also the possibility that the Supreme Court in Ransom will interpret “applicable” in § 707(b)(2)(A)(ii)(I) to preclude a Local Standards Transportation Ownership Costs allowance to a debtor with an unencumbered car187 as part of the preliminary “mechanical” disposable income calculation—before “projecting” becomes an issue. Resort to the Internal Revenue Manual might produce this result.188 This approach would affirm the Ninth Circuit’s outcome in Ransom without providing further insight into the unanswered questions in Lanning. This approach will challenge the Congressional choice to use both “applicable” and “actual” to describe allowable expenses in § 707(b)(2)(A)(ii)(I).189

[87]

One thing is clear about Lanning: Pandora’s box is open. The Supreme Court has unhinged the projected disposable income test from the statutory definition of disposable income in §§ 101(10A), 707(b)(2)(A) and 1325(b). Lanning substitutes the discretion of bankruptcy judges for the policy choices Congress made in BAPCPA in 2005. Support for this claim arrived immediately in the early decisions applying the Supreme Court’s decision in Lanning.

[88]

First out of the box from the courts of appeals was Darrohn v. Hildebrand (In re Darrohn).190 Darrohn was under advisement while the Sixth Circuit waited for the Supreme Court to decide Lanning. The debtor in Darrohn had both a reduction in income between the six months before the petition and confirmation and a plan that proposed to surrender mortgaged real estate. Applying Lanning, the Sixth Circuit had no trouble concluding there were known and virtually certain “changes” in income and expenses:

[B]ecause David Darrohn was unemployed for 90 days during the six-month look-back period, the figure used by the bankruptcy court was substantially less than the Darrohns’ actual income at the time of confirmation. David Darrohn’s new job . . . was a “known or virtually certain” event at the time of confirmation. Therefore, the bankruptcy court had the authority to account for this change in calculating the Darrohns’ projected disposable income. . . . While much of the Court’s analysis in Lanning focused on the income side of the projected disposable income formulation, the holding clearly applied to “changes in the debtor’s income or expenses. . . .” . . . Lanning also governs the bankruptcy court’s determination on the deduction for mortgage payments. Because it is undisputed that the Darrohns intended to surrender these properties, this represents a change in the Darrohns’ “expenses that [was] known or virtually certain at the time of confirmation.” . . . The bankruptcy court therefore should have accounted for this changed circumstance.191
[89]

Perhaps even more revealing of where Lanning will lead is the bankruptcy court decision in In re Cranmer.192 In Cranmer, the debtor and his nonfiling spouse received $1,940 a month of Social Security income (SSI). Consistent with § 101(10A)(B) and the instructions on Official Form B22C, the debtor excluded Social Security benefits from income to determine CMI.193 The Chapter 13 trustee objected.

[90]

The bankruptcy court looked at the statute and conceded that “SSI is statutorily excluded from both the calculation of CMI under § 101(10A) and the calculation of [disposable income] under § 1325(b)(2).”194 But the bankruptcy court then cited Lanning for the proposition that both the Tenth Circuit and the Supreme Court determined that “projected disposable income” in § 1325(b)(1)(B) has a different meaning than “disposable income” and that “forward-looking analysis” requires bankruptcy courts in “unusual cases” to “take into account other known or virtually certain information about the debtor’s future income.”195 Applying Lanning, the bankruptcy court concluded that SSI is dragged back into the grasp of unsecured creditors through the “projected” disposable income test because SSI is a known change in income:

Here, the Debtor’s CMI from the 6-month look back period is significantly lower than the Debtor’s [projected disposable income] as the CMI does not include the SSI. Therefore, the mechanical approach does not make sense because it allows the Debtor to retain excess [projected disposable income] that should be included in plan payments. The CMI from the Form [B]22C does not reflect all sources of income available to the Debtor. This Court determines that this is the “unusual” case the Supreme Court meant in Hamilton v. Lanning where there are other known sources of income that should be included in the calculation of [projected disposable income].196
[91]

Cranmer illustrates that if “change” in Lanning means “difference,” there will almost always be a “change” that is known or virtually certain between the numbers on Official Form B22C and the numbers on Schedules I and J to Official Form 6.197 Many of these “changes” are quite clearly statutory choices that Congress made in the construction of §§ 101(10A), 1325(b) and 707(b)(2).

[92]

For example, as in Cranmer, it will always be true that a Chapter 13 debtor excludes SSI from income in Part I of Official Form B22C. This is true because § 101(10A)(B) explicitly excludes SSI from CMI, and that statutory exclusion is respected in Official Form B22C. There is no such exclusion in Schedule I to Official Form 6, and debtors will, true to the form, reveal SSI on Schedule I.

[93]

There is then a “difference” between Form B22C and Schedule I in every Chapter 13 case in which a debtor receives SSI. That difference is known and if that known difference is a “change” for Lanning purposes, then the apparent intent of Congress to insulate SSI from the rights of unsecured creditors in Chapter 13 cases collapses under the exercise of discretion by bankruptcy judges. Is Cranmer the look of the future after Lanning?

[94]

Prior to BAPCPA, there was controversy in Chapter 13 cases with respect to the treatment of SSI. This disagreement sometimes centered on whether the bankruptcy courts could issue income deduction orders to the Social Security Administration.198 There is a broad exemption for SSI from “the operation of any bankruptcy or insolvency law” in 42 U.S.C. § 407.199 But this did not stop many bankruptcy courts from including SSI in “income” for purposes of calculating projected disposable income before 2005.200

[95]

BAPCPA went 42 U.S.C. § 407 one better or, perhaps, one clearer. Section 101(10A)(B) could not be more explicit: SSI is excluded from the basic building block of the projected disposable income test—CMI.201 SSI then does not become an element of disposable income because it never became part of the income that is included in CMI.

[96]

What purpose does the exclusion of SSI from CMI in § 101(10A)(B) serve if Congress intended bankruptcy judges to have discretion to include SSI in CMI whenever there is a “change” between the numbers on two bankruptcy forms? Why would Congress go to the trouble of carefully excluding SSI from CMI for all debtors if the exclusion was supposed to be discretionary?

[97]

On the other hand, the outcome in Cranmer is hardly a surprise after what eight justices of the Supreme Court did in Lanning. In Lanning itself, the Supreme Court threw out the six-month calculation period for CMI in § 101(10A)(A) in the name of “looking forward” to project disposable income. The statutory exclusion of SSI from CMI follows in the very next sentence of § 101(10A)(B). If bankruptcy courts have discretion to ignore (A), why not ignore (B)?

[98]

It is already clear that Cranmer is not alone in its reading of Lanning. Decided on the same day as Cranmer, In re Collier202 presents a variation of the same application of Lanning. The debtors in Collier owned a four-wheeler used for “recreational purposes.” There was approximately $4,000 of debt secured by the four-wheeler, and consistent with § 707(b)(2)(A)(iii), the debtors divided by 60 and deducted an expense of $68 per month to calculate disposable income.203

[99]

The bankruptcy court cited Lanning and held that this $68-per-month deduction was subject to a “reasonableness” and “necessity” review as part of the bankruptcy court’s exercise of discretion:

[Lanning] instruct[s] that the means test is the starting point, but that test may be varied under the circumstances of a particular case. It follows that a per se rule in which all payments to secured creditors are reasonable [sic] necessary deductions under Section 707(b) is not in keeping with the holding in Lanning. . . . [A] deduction of a secured debt payment under Section 707(b)(2)[(A)](iii) is subject to the reasonably necessary test of Section 1325(b).204
[100]

Of course, there was no “change” in income or expenses in Collier between the petition and confirmation. The debtors owned the four-wheeler throughout and were obligated for the debt before and after confirmation. But the bankruptcy court in Collier found discretion in Lanning to determine the reasonableness and necessity of any expense, including the secured debt that Congress allowed as an expense in § 707(b)(2)(A)(iii).

[101]

You won’t find “reasonableness” or “necessary” anywhere in § 707(b)(2)(A)(iii)(I).205 A strict statutory constructionist might conclude that the secured lender lobbyists were influential enough in the drafting of BAPCPA206 to keep reasonableness and necessity out of the allowance of expenses for secured debt payments for debtors with CMI greater than applicable median family income. Did the Supreme Court intend to upend that policy decision in Lanning? Collier says it did.

[102]

The four-wheeler debt passed reasonableness review in Collier. The bankruptcy court found a “de minimis $68.13 per month” payment was not unreasonable for family recreation. The next bankruptcy judge will multiply $68 times 60 and find that $4,000 belongs to unsecured creditors.

[103]

If Darrohn, Collier and Cranmer are reading Lanning correctly, nothing concrete remains of the 2005 amendments to the projected disposable income test. Collier and Cranmer are evidence that Lanning has launched the bankruptcy community into the Never Land of fixing BAPCPA. Many in that community will rejoice to know that discretion is back and the statutory handcuffs of BAPCPA have been loosened. Others will lament that fixing a statute one section and one fact pattern at a time is a ruleless enterprise that will quite consume a generation or two of bankruptcy practitioners.

 


 

1  See § 168.1 [ Payment-in-Full Option ] § 91.7  Payment-in-Full Option.

 

2  11 U.S.C. § 1325(b)(1)(B). Applicable commitment period is discussed in § 493.1 [ Applicable Commitment Period Calculation ] § 100.1  Applicable Commitment Period Calculation.

 

3  Pub. L. No. 109-8, 119 Stat. 23 (2005).

 

4  See  discussion of projected disposable income test before BAPCPA beginning at § 91.1  In General.

 

5  See 11 U.S.C. § 1325(b)(4), discussed in § 493.1 [ Applicable Commitment Period Calculation ] § 100.1  Applicable Commitment Period Calculation.

 

6  See § 493.1 [ Applicable Commitment Period Calculation ] § 100.1  Applicable Commitment Period Calculation.

 

7  See §§ 163.1 [ In General ] § 91.1  In General and 165.1 [ Reasonably Necessary for Maintenance or Support ] § 91.3  Reasonably Necessary for Maintenance or Support.

 

8  11 U.S.C. § 1325(b)(2) (prior to BAPCPA), discussed in § 164.1 [ Projected (Disposable) Income ] § 91.2  Projected (Disposable) Income.

 

9  Pub. L. No. 109-439, 120 Stat. 3285 (Dec. 20, 2006). Between October 17, 2005, and December 20, 2006, the italicized portion of the first sentence of § 1325(b)(3) was not part of the statute. See §§ 477.1 [ Other [Necessary] Expenses—In General; All Categories ] § 95.4  Other [Necessary] Expenses—In General; All Categories and 487.2 [ Charitable Contributions ] § 99.6  § 1325(b)(2)(A)(ii): Charitable Contributions (Again?).

 

10  11 U.S.C. § 1325(b)(2), (3) (emphasis added).

 

11  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.

 

12  See below in this section, and see § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

13  See Hamilton v. Lanning, 130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010), discussed below in this section and in § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

14  See below in this section, and see § 488.1 [ In General ] § 99.1  In General.

 

15  See 11 U.S.C. § 1322(f), discussed below in this section and in § 491.1 [ Pension Loan Repayments ] § 99.4  Pension Loan Repayments; 11 U.S.C. § 541(b)(7), discussed below in this section and in §§ 403.1 [ Property of the Chapter 13 Estate—New Ins and Outs ] § 46.2  Property of the Chapter 13 Estate—Changes by BAPCPA and 492.1 [ Employee Benefit Plan Contributions ] § 99.5  Employee Benefit Plan Contributions.

 

16  11 U.S.C. § 1325(b)(2), discussed in § 93.1  Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Median Family Income and beginning at § 94.1  Big Picture: Too Many Issues

 

17  11 U.S.C. § 1325(b)(2), discussed in § 489.1 [ Amounts Paid by Others under § 101(10A)(B) ] § 99.2  Amounts Paid by Others under § 101(10A)(B).

 

18  11 U.S.C. § 1325(b)(2), discussed in § 490.1 [ Child Support, Foster Care and Disability Payments ] § 99.3  Child Support, Foster Care and Disability Payments.

 

19  11 U.S.C. §§ 1322(f) and 362(b)(19), discussed in §§ 433.1 [ When Does § 362(c)(4) Apply? ] § 61.1  When Does § 362(c)(4) Apply? and 491.1 [ Pension Loan Repayments ] § 99.4  Pension Loan Repayments.

 

20  11 U.S.C. § 541(b)(7), discussed in § 492.1 [ Employee Benefit Plan Contributions ] § 99.5  Employee Benefit Plan Contributions.

 

21  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). Median family income is defined in 11 U.S.C. § 101(39A):

(39A) The term “median family income” means for any year—
(A) the median family income both calculated and reported by the Bureau of the Census in the then most recent year; and
(B) if not so calculated and reported in the then current year, adjusted annually after such most recent year until the next year in which median family income is both calculated and reported by the Bureau of the Census, to reflect the percentage change in the Consumer Price Index for All Urban Consumers during the period of years occurring after such most recent year and before such current year.

 

22  See www.census.gov.

 

23  See Glossary at http://factfinder.census.gov/home/saff/main.html?_lang=en.

 

24  11 U.S.C. § 1325(b)(3)(A).

 

25  11 U.S.C. § 1325(b)(3)(B).

 

26  This amount was $575 prior to adjustment on April 1, 2010, and $525 prior to April 1, 2007.

 

27  11 U.S.C. § 1325(b)(3)(C).

 

28  See § 406.1 [ New Domicile Rules ] § 48.6  Domicile Rules after BAPCPA.

 

29  11 U.S.C. § 1325(b)(3)(B).

 

30  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).

 

31  An appropriate consumer price index adjustment factor can be found at www.westegg.com/inflation.

 

32  11 U.S.C. § 1325(b)(3). See discussion beginning at § 94.1  Big Picture: Too Many Issues.

 

33  See 11 U.S.C. § 1325(b)(2)(A)(i), discussed in § 470.1 [ Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Applicable Median Family Income ] § 93.1  Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Median Family Income.

 

34  See 11 U.S.C. § 1325(b)(3), discussed beginning at § 94.1  Big Picture: Too Many Issues.

 

35  11 U.S.C. § 1325(b)(2)(A)(i), discussed in § 470.1 [ Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Applicable Median Family Income ] § 93.1  Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Median Family Income.

 

36  11 U.S.C. § 1325(b)(3), incorporating 11 U.S.C. § 707(b)(2)(A)(ii)(I), discussed in § 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation.

 

37  11 U.S.C. § 707(b)(2)(A)(iii)(I), discussed in § 485.1 [ Average Monthly Payments on Account of Secured Debts ] § 96.1  Average Monthly Payments on Account of Secured Debts.

 

38  See § 470.1 [ Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Applicable Median Family Income ] § 93.1  Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Median Family Income.

 

39  See Hamilton v. Lanning, 130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010), discussed below in this section. See also §§ 471.1 [ Big Picture: Too Many Issues ] § 94.1  Big Picture: Too Many Issues, 475.1 [ National Standards ] § 95.2  National Standards and 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation.

 

40  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.

 

41  See § 470.1 [ Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Applicable Median Family Income ] § 93.1  Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Median Family Income.

 

42  See discussion beginning at § 94.1  Big Picture: Too Many Issues.

 

43  See Religious Liberty and Charitable Donation Clarification Act of 2006, Pub. L. No. 109-439, 120 Stat. 3285 (Dec. 20, 2006), discussed in § 487.2 [ Charitable Contributions ] § 99.6  § 1325(b)(2)(A)(ii): Charitable Contributions (Again?).

 

44  See § 488.1 [ In General ] § 99.1  In General.

 

45  See § 489.1 [ Amounts Paid by Others under § 101(10A)(B) ] § 99.2  Amounts Paid by Others under § 101(10A)(B).

 

46  See 11 U.S.C. § 1325(b)(2), discussed in § 490.1 [ Child Support, Foster Care and Disability Payments ] § 99.3  Child Support, Foster Care and Disability Payments.

 

47  See 11 U.S.C. § 362(b)(19), discussed in §§ 433.1 [ When Does § 362(c)(4) Apply? ] § 61.1  When Does § 362(c)(4) Apply? and 491.1 [ Pension Loan Repayments ] § 99.4  Pension Loan Repayments; 11 U.S.C. § 1322(f), discussed in § 491.1 [ Pension Loan Repayments ] § 99.4  Pension Loan Repayments.

 

48  See 11 U.S.C. § 541(b)(7), discussed in §§ 403.1 [ Property of the Chapter 13 Estate—New Ins and Outs ] § 46.2  Property of the Chapter 13 Estate—Changes by BAPCPA and 492.1 [ Employee Benefit Plan Contributions ] § 99.5  Employee Benefit Plan Contributions.

 

49  11 U.S.C. § 1325(b)(4) is discussed in § 493.1 [ Applicable Commitment Period Calculation ] § 100.1  Applicable Commitment Period Calculation.

 

50  See § 494.1 [ Projected Disposable Income ] § 101.1  What Do Unsecured Creditors Get?.

 

51  See Hamilton v. Lanning, 130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010), discussed below in this section.

 

52  See John F. Manning, What Divides Textualists from Purposivists?, 106 Columbia L. Rev. 70 (2006), usefully discussed by Judge Markell in In re Trejos, 352 B.R. 249 (Bankr. D. Nev. 2006).

 

53  Thomas F. Waldron & Neil M. Berman, Principled Principles of Statutory Interpretation: A Judicial Perspective After Two Years of BAPCPA, 81 Am. Bankr. L.J. 195 (2007).

 

54  Thomas F. Waldron & Neil M. Berman, Principled Principles of Statutory Interpretation: A Judicial Perspective After Two Years of BAPCPA, 81 Am. Bankr. L.J. 195 (2007).

 

55  130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010).

 

56  See § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

57  See § 470.1 [ Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Applicable Median Family Income ] § 93.1  Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Median Family Income.

 

58  See discussion beginning at § 94.1  Big Picture: Too Many Issues.

 

59  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).

 

60  See § 493.1 [ Applicable Commitment Period Calculation ] § 100.1  Applicable Commitment Period Calculation.

 

61  See below in this section, and see § 363.4 [ Three: Don’t Trust Judges ] § 3.4  Three: Don’t Trust Judges.

 

62  See § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline. But see the time-shifting potential in 11 U.S.C. § 101(10A)(A)(ii), discussed below in this section and in § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

63  344 B.R. 742 (Bankr. E.D.N.C. 2006).

 

64  366 B.R. 802 (Bankr. S.D. Ohio 2007).

 

65  344 B.R. at 747–50.

 

66  366 B.R. at 806–18.

 

67  See §§ 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.

 

68  See § 36.21  Form 122C-2: Disposable Income Calculation, § 93.1  Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Median Family Income and discussion beginning at § 95.1  In General

 

69  See §§ 35.10 [ Schedules I and J—Income and Expenditures ] § 36.16  Schedules I and J—Income and Expenditures and 470.1 [ Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Applicable Median Family Income ] § 93.1  Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Median Family Income.

 

70  See Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008) (Pregerson, Siler, Bea) (Applying Anderson v. Satterlee (In re Anderson), 21 F.3d 355 (9th Cir. 1994), approving of In re Alexander, 344 B.R. 742 (Bankr. E.D.N.C. 2006), and rejecting In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006), and In re Jass, 340 B.R. 411 (Bankr. D. Utah 2006), “projected disposable income” is “disposable income” calculated consistent with § 1325(b)(2) and then projected over the applicable commitment period; when projected disposable income is a negative number, there is no applicable commitment period.); Garcia v. Dockery (In re Garcia), No. 07-55078, 2008 WL 2402538 (9th Cir. June 11, 2008) (unpublished) (Pregerson, Bea, Siler) (applying Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008)); In re Lasowski, 375 B.R. 526, 531 (Bankr. E.D. Ark. 2007) (“The ‘disposable income’ calculation is based on exacting historical data juxtaposed with equally exacting deductions. BAPCPA’s removal of discretion in determining an above-median debtor’s disposable income sacrificed sensible judicial examination in favor of formulaic uniformity. . . . [T]he above-median debtor’s expense deductions are governed by Form B22C, not by Schedule J.”), rev’d, 575 F.3d 815 (8th Cir. Aug. 12, 2009) (Bye, Colloton, Gruender); In re Featherston, Nos. 07-60296-13, 07-60441-13, 2007 WL 2898705, at *8–*10 (Bankr. D. Mont. Sept. 28, 2007) (unpublished) (“This Court announced in [In re Tuss, 360 B.R. 684 (Bankr. D. Mont. 2007), and In re Tranmer, 355 B.R. 234 (Bankr. D. Mont. 2006),] that it will apply a mechanical test in which its discretion to determine the reasonableness of a debtor’s expenses in calculating disposable income was curtailed by BAPCPA. . . . This Court sees no sufficient reason to depart from its mechanical test established in Tuss and Tranmer.”), aff’d, No. CV 08-16-GF-SEH, 2008 WL 5217936, at *1–*2 (D. Mont. Dec. 11, 2008) (Haddon) (published as Featherson) (Citing Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), because “disposable income” is not merely starting point in § 1325(b) calculation, one-time income from sale of livestock is included in projected disposable income. “Kagenveama . . . rejected the argument that ‘disposable income’ is merely a starting point for bankruptcy plan calculation and specifically refused to endorse the [Pak v. eCast Settlement Corp. (In re Pak), 378 B.R. 257 (B.A.P. 9th Cir. 2007),] holding . . . . The definition of ‘disposable income’ provided in 11 U.S.C. § 1325 is valid and the initial calculation should be used. Subsequent adjustments to the calculation are not permitted.”); In re Musselman, 379 B.R. 583 (Bankr. E.D.N.C. 2007) (Doub) (Projected disposable income in § 1325(b)(1)(B) is disposable income as defined in § 1325(b)(2) projected over the applicable commitment period; disposable income for debtor with CMI greater than applicable median family income is not determined by subtracting Schedule J expenses from Schedule I income but is instead the rigid definition now found in § 1325(b)(2) and (3).), aff’d in part, rev’d in part, 394 B.R. 801 (E.D.N.C. 2008) (Flanagan) (Citing In re Alexander, 344 B.R. 742 (Bankr. E.D.N.C. 2006), and Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), to determine projected disposable income, disposable income is calculated pursuant to § 1325(b)(2) and then multiplied by length of plan.); Mancl v. Chatterton (In re Mancl), 381 B.R. 537, 541–42 (W.D. Wis. 2008) (Crabb) (BAPCPA substituted rigid, mechanical test for projected disposable income that does not allow discretion for bankruptcy courts to use Schedules I and J rather than B22C calculation for debtors with CMI greater than applicable median family income. “To adopt the majority view, one must assume that Congress created the precise and objective current monthly income definition of § 101(10A), mandated that bankruptcy courts apply it to the § 1325(b) test, and then added the term ‘projected’ to empower bankruptcy courts to ignore the § 101(10A) definition, substituting their own sense of fairness by applying the former process of analyzing and comparing schedules I and J. Given the precision and detail of the statute, such an interpretation is untenable. Moreover, requiring strict adherence to the statute is entirely consistent with congressional objectives in changing the law. Replacing the previous nuanced and discretionary computation of disposable income with the uncompromising six-month average income determination deprived bankruptcy courts of discretion and made a certain number of harsh results inevitable for both debtors and creditors. It also enhanced consistency and predictability and limited the opportunities for manipulation of the process. There is no reason to believe that Congress did not anticipate and intend both of these effects. To the contrary, it is very likely that Congress anticipated the precise circumstances of this case, in which a pre-petition decline in income precipitates a bankruptcy filing, leaving debtors in a position of having to pay less than under the former regime. . . . Although it is understandable that bankruptcy courts might resist adherence to the code’s new requirements in favor of retaining their former discretionary powers, it is apparent from the language and history of the BAPCPA that adherence to objectively defined standards and reduced judicial discretion is what Congress intended. The clear meaning and intent of § 1325(b) is to establish objective and defined methods for calculating both income and expenses to be used in setting minimum payments to unsecured Chapter 13 creditors.”); In re Dement, No. 09-61582-13, 2010 WL 231750 (Bankr. D. Mont. Jan. 14, 2010) (Kirscher) (Two-step analysis by Ninth Circuit BAP in American Express Bank v. Smith (In re Smith), 418 B.R. 359 (B.A.P. 9th Cir. Oct. 5, 2009) (Montali, Jury, Hollowell), is inconsistent with Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. June 23, 2008) (Pregerson, Siler, Bea); debtors with CMI greater than applicable median family income can deduct debt secured by recreational trailer without first proving that debt is reasonable or necessary.); In re Boyd, 414 B.R. 223, 232 (Bankr. N.D. Ohio Aug. 26, 2009) (Harris) (Following Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), and declining to follow Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. 2008), cert. denied, 129 S. Ct. 1630 (2009), Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), Nowlin v. Peake (In re Nowlin), 576 F.3d 258 (5th Cir. 2009), and In re Turner, 574 F.3d 349 (7th Cir. 2009), “this Court agrees with Judge Siler’s conclusion in Kagenveama that the mechanical approach provides a better fit with the text of the Bankruptcy Code.”); In re York, 415 B.R. 377, 379 (Bankr. W.D. Wis. July 20, 2009) (Martin) (Citing Mancl v. Chatterton (In re Mancl), 381 B.R. 537 (W.D. Wis. 2008) (and decided on same day as In re Turner, 574 F.3d 349 (7th Cir. 2009)), debtor with no disposable income on Form B22C can confirm a plan that pays $750 per month for 60 months when Schedules I and J show income in excess of expenses of $1,564. “[T]he Yorks are required to commit nothing to their unsecured creditors because the means test indicates that they have no disposable income. . . . [T]his district adheres to a straight forward approach to the disposable income analysis and holds that ‘projected disposable income’ means ‘properly calculated current monthly income projected forward for each month during the plan commitment period.’”); In re McElroy, 410 B.R. 845 (Bankr. N.D. Iowa Dec. 3, 2008) (Edmonds) (Citing Anderson v. Satterlee (In re Anderson), 21 F.3d 355 (9th Cir. 1994), to satisfy § 1325(b), debtors must commit disposable income as calculated at confirmation and need not agree to payment of whatever disposable income appears in future.); In re Smith, 401 B.R. 469, 474 (Bankr. W.D. Wash. Nov. 14, 2008) (Snyder) (“After [Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008),] it would . . . be inconsistent to apply a backward-looking approach to income, yet adopt a forward-looking approach in determining expenses. . . . Congress has made the conscious choice to remove judicial discretion from the calculation of disposable income. . . . [U]nder § 1325(b)(3), for an above median debtor, amounts reasonably necessary to be expended are determined solely by reference to § 707(b)(2).”); In re Spruch, 410 B.R. 839, 841–42 (Bankr. S.D. Ind. Nov. 12, 2008) (Lorch) (Citing Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), as “better reasoned” than Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. 2008), “this Court continues to hold that ‘projected disposable income’ must be calculated using the debtor’s ‘disposable income,’ as defined in § 1325(b)(2) and subtracting the standard expenses of § 707(b)(2)(A) and (B), projected over the applicable commitment period.”); FIA Card Servs. v. Wenning (In re Wenning), No. 1:08-bk-00111MDF, 2008 WL 5158284, at *3–*4 (Bankr. M.D. Pa. Oct. 8, 2008) (unpublished) (France) (Citing Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), “Congress determined that a formula based upon historical income data and standard deductions provided a more reliable method of calculating projected disposable income than the pre-BAPCPA approach, which used Schedules I and J as a base with adjustments for changes in circumstances up to the confirmation date. . . . Congress opted for a predictable, if flawed, formula . . . . If it had intended to provide for an adjustment to projected disposable income when earnings increased after filing, they easily could have included such a provision.”); In re Hedge, 394 B.R. 463 (Bankr. S.D. Ind. 2008) (Lorch) (Citing Maney 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 Neclerio, 393 B.R. 784, 790 (Bankr. S.D. Fla. 2008) (Olson) (Citing Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), and disagreeing with several other Florida decisions, projected disposable income test unambiguously and mechanically generates an amount and then “projects” that number over the applicable commitment period to fix the amount that must be paid to unsecured creditors through a Chapter 13 plan. That the result will sometimes lead to “peculiar results” must be “accepted as the will of Congress.”); In re Cox, 393 B.R. 681, 689–94 (Bankr. W.D. Mo. 2008) (Dow) (“[I]n many respects BAPCPA was designed to limit the discretion of bankruptcy judges. Nowhere is this more apparent than in the means test embodied in § 707(b)(2) as incorporated into Chapter 13 for above-median debtors by § 1325(b)(3). . . . The formulas adopted in BAPCPA for determining both income and expenses for above-median debtors result in a far from perfect fit in assessing their actual ability to pay. However, . . . perfect fits are not required.”); In re Greer, 388 B.R. 889, 893–95 (Bankr. C.D. Ill. 2008) (Perkins) (Citing Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), and Mancl v. Chatterton (In re Mancl), 381 B.R. 537 (W.D. Wis. 2008), six-month income history in § 101(10A) is not a presumption or starting point but is the actual math that determines projected disposable income; that debtor lost job soon after petition does not change CMI or projected disposable income, and plan based on reduced income cannot be confirmed over objection of trustee. “Notwithstanding the seemingly moderate terms ‘starting point’ and ‘rebuttable presumption,’ Section 1325(b)(2) does not contemplate any blending or averaging of CMI with actual or anticipated income and does not reflect an intent that CMI should be applied as a presumption. . . . [I]t is inconceivable that Congress created the new term CMI and redefined ‘disposable income’ by reference to it, but left the modifier ‘projected’ in place so as to enable courts to ignore the CMI calculation whenever they didn’t like the result.”); In re Rush, 387 B.R. 26 (Bankr. W.D. Mo. 2008) (Dow) (Applying Coop v. Frederickson (In re Frederickson), 375 B.R. 829 (B.A.P. 8th Cir. 2007), debtor with CMI less than applicable median family income calculates disposable income using CMI as income component and Schedule J with adjustments as expense component.); In re Turner, 384 B.R. 537, 543–44 (Bankr. S.D. Ind. 2008) (Coachys) (“Congress deliberately and emphatically chose—after years of debate—a formulaic test over a more flexible, judicially governed standard to determine a debtor’s ability to pay. Congress clearly sought to create a bright line test, and while the test itself may be flawed, the Court rejects the argument that a mechanical application of it . . . is somehow inconsistent with Congressional intent or leads to an absurd result.”), rev’d, 574 F.3d 349 (7th Cir. July 20, 2009) (Posner, Sykes, Van Bokkelen); In re Waters, 384 B.R. 432, 440–42 (Bankr. N.D. W. Va. 2008) (Flatley) (“The changes wrought by BAPCPA to the disposable income test of § 1325(b) are not stylistic whereby prior practice may still be resorted to . . . the changes are substantive and extensive. . . . Congress added a completely new definition to the Bankruptcy Code for the term ‘current monthly income’ . . . . [A]n essential purpose of BAPCPA was to eliminate the type of judicial discretion that allowed ‘too many people’ who were perceived abusers of the bankruptcy system to ‘walk away from their debts even when they had the ability to repay them.’ . . . Judicial discretion was thereby intended to be largely eliminated in favor of more uniform standards. . . . [T]he result of uniform standards to individual cases often produces unwise results.”); In re Anderson, 383 B.R. 699, 705 (Bankr. S.D. Ohio 2008) (Humphrey) (“CMI is not a ‘guide’ or ‘presumption’, but instead represents Congress’ determination concerning how income should be defined for all Chapter 13 debtors in cases governed by BAPCPA’s changes to § 1325(b). . . . [T]here is no statutory basis for using CMI as a mere guide or presumption in determining what is ‘projected disposable income.’ CMI will almost never coincide exactly with a debtor’s actual income at confirmation.”); In re Colclasure, 383 B.R. 463, 468 (Bankr. E.D. Ark. 2008) (Mixon) (“Congress chose the phrase ‘projected disposable income’ and it also statutorily defined the data [current monthly income] the courts must use in making the projection . . . . The fact that, as in this case, this interpretation results in a head-scratching outcome is not grounds to deviate from the unambiguous language of the statute. . . . To do otherwise is to rewrite the statute to make it resemble the code before it was amended by BAPCPA. As a practical matter, Congress removed the discretion the Bankruptcy Court had when dealing with facts similar to those in this case and placed it in the hands of the Chapter 13 Trustee.”); In re Miller, 381 B.R. 736 (Bankr. W.D. Ark. 2008) (Barry) (Projected disposable income for debtor with CMI greater than applicable median family income is historically based CMI less expenses determined in accordance with § 707(b)(2)(A) and (B) as shown on Form B22C.); In re Simms, No. 06-1206, 2008 WL 217174, at *4–*5 (Bankr. N.D. W. Va. Jan. 23, 2008) (unpublished) (Flatley) (“‘Calculating “disposable income” for above-median-income debtors under the new section 1325(b) is now separated from a review of Schedules I and J and no longer turns on the court’s determination of what expenses are reasonably necessary for the debtor’s support.’ . . . Based on the evolution of the disposable income test—from the 1978 good faith auspices of § 1325(a)(3), to the 1984 statutory definition of disposable income in § 1325(b), to the ‘fill-in-the-blank’ mechanical means test of 2005—this court sees a clear trend to benumb the facts of individual cases in favor of uniform standards.”); In re Buck, No. 07-31513-KRH, 2007 WL 4418145, at *3 (Bankr. E.D. Va. Dec. 14, 2007) (unpublished) (Huennekens) (“Prior to the adoption of BAPCPA, the United States Court of Appeals for the Fourth Circuit held that ‘[p]rojected disposable income typically is calculated by multiplying a debtor’s monthly income at the time of confirmation by 36 months, the [at that time] normal duration of a Chapter 13 plan, then determining the portion of that income which is “disposable” according to the statutory definition.’ In re Solomon, 67 F.3d 1128, 1132 (4th Cir. 1995). The modifier ‘projected’ has always been tied to the statutory definition of disposable income. It simply means that the disposable income, calculated by the method mandated by statute, must be multiplied out (or, in other words, projected out) over the number of months covered by the plan. Projected in this context does not mean predicted. The Fourth Circuit cautioned against ‘engaging in hopeless speculation about the future[.]’”); In re Dalton, No. 07-50402 ERG, 2007 WL 4554024, at *5 (Bankr. S.D. Miss. Dec. 19, 2007) (unpublished) (Gaines) (“This court agrees with those decisions that have held that the plain meaning of § 1325(b) requires a calculation for determining projected disposable income by utilization of Form [B]22C.”); In re Brunner, No. 06-12237, 2007 WL 4373119, at *3 (Bankr. N.D.N.Y. Dec. 7, 2007) (unpublished) (Littlefield) (“[F]inancial events occurring during the life of the case have no relevance to the plan payment necessary for confirmation, and future events simply do not mesh with the backward glance required by § 1325(b)(1)(B) at confirmation.”); In re Bardo, 379 B.R. 524 (Bankr. M.D. Pa. 2007) (Thomas) (Projected disposable income is based on historical calculation required by § 101(10A) and § 1325(b).); In re Green, 378 B.R. 30, 38–39 (Bankr. N.D.N.Y. 2007) (Littlefield) (Adopting In re Alexander, 344 B.R. 742 (Bankr. E.D.N.C. 2006), and rejecting In re Kibbe, 361 B.R. 302 (B.A.P. 1st Cir. 2007): “Whether it was to set a basic price of admission to Title 11, to limit judicial discretion, or to remedy perceived abuse, § 1325(b) provides specific direction for the financial snapshot that is to be developed at confirmation. . . . ‘[D]isposable income’ and ‘projected disposable income’ are interrelated and are based on historical numbers as mandated in § 1325(b).”); In re McLain, 378 B.R. 39 (Bankr. N.D.N.Y. 2007) (Plan need not step up payments to unsecured creditors to reflect that car loans will be paid off during life of plan; projected disposable income is based on historical numbers not affected by financial events during Chapter 13 case.); In re Riding, 377 B.R. 239, 243 (Bankr. W.D. Mo. 2007) (Federman) (Applying Coop v. Frederickson (In re Frederickson), 375 B.R. 829 (B.A.P. 8th Cir. 2007), when debtor’s income was higher during six months before petition, debtor must pay unsecured creditors at higher amount based on CMI and Form B22C; plan is not confirmable that is based on lower actual income available to debtor. “For the reasons stated in my dissent in Frederickson, this result should not be mandated by the language in § 1325(b). . . . [S]ince Frederickson instead requires us to rely solely on the artificial measure contained in the Form [B]22C, the Debtor’s Plan is not confirmable.”); In re Berger, 376 B.R. 42, 47–48 (Bankr. M.D. Ga. 2007) (“[T]he majority’s interpretation renders not just one word superfluous, but the entirety of subsection 1325(b)(2) . . . . Section 1129(a)(15) . . . expressly states the definition of ‘projected disposable income’ is controlled by the definition of ‘disposable income.’ . . . Prior to the amendments, courts extrapolated projected disposable income from information in Schedules I and J. Under the amendments, Congress has directed the Court to extrapolate from a different source—disposable income as calculated in accordance with the means test and reported on Form B22C. . . . [T]he formula ‘represents, by the definition’s plain language, the policy judgment of Congress . . .’ . . . . While the results of applying the formula may be troubling in some cases, they are not absurd and do not justify deviating from the plain language of the statute.”); In re Ross, 375 B.R. 437 (Bankr. N.D. Ill. 2007) (Citing three conflicting views, debtor with CMI greater than applicable median family income calculates projected disposable income using Form B22C only.); In re Austin, 372 B.R. 668, 677 (Bankr. D. Vt. 2007) (“[T]his Court joins the numerous bankruptcy courts that have held that plain language of the statute compels the conclusion that ‘projected disposable income’ means ‘disposable income’—calculated using the formula set forth in § 1325(b)(2) and (3)—‘projected’ over the debtor’s applicable commitment period, without exceptions, presumptions, or caveats of any kind.”); In re Nance, 371 B.R. 358, 364–67 (Bankr. S.D. Ill. 2007) (Rejecting In re Fuller, 346 B.R. 472 (Bankr. S.D. Ill. 2006), and In re Jass, 340 B.R. 411 (Bankr. D. Utah 2006), “this Court finds the strict, plain meaning approach adopted by [In re Alexander, 344 B.R. 742 (Bankr. E.D.N.C. 2006),] to be the most persuasive on the question of how to calculate ‘projected disposable income’ . . . . [A] major goal of Congress was to replace judicial discretion with specific statutory standards and formulas. . . . [T]he strict, mechanical approach may lead to impractical results when a debtor’s ‘disposable income’ calculated on Form B22C does not accurately reflect the debtor’s actual income. However, the Court does not believe that such impractical results amount to being ‘absurd[.]’”); In re Winokur, 364 B.R. 204, 206 (Bankr. E.D. Va. 2007) (Siding with In re Alexander, 344 B.R. 742 (Bankr. E.D.N.C. 2006), BAPCPA substituted mechanical formula to determine amount payable to unsecured claim holders, and actual net income does not control; good faith is not backdoor access to income not captured by formula. “There are two approaches to setting plan payments: case-by-case determinations and standardized determinations. The Chandler Act of 1938 and the Bankruptcy Reform Act of 1978 both opted for individualized treatment of each chapter 13 case. In each bankruptcy case, the chapter 13 trustee examined the facts and circumstances of the debtor’s financial affairs to determine on an individual basis what the debtor could afford to pay to his or her creditors. . . . The other approach is a formula applicable to all debtors. The debtor, the trustee and the court only need the input, mainly the debtor’s income. The formula mechanically determines the result, the amount of the plan payment. . . . Congress was undoubtedly aware of the tradeoffs between the two approaches. In 1938 and 1978, it chose the first; in 2005, the second. The statutory language is clear. The court has no discretion to substitute its judgment for that of Congress. Alexander properly analyzes the issues.”); In re Hanks, 362 B.R. 494, 498–500 (Bankr. D. Utah 2007) (“Projected” in § 1325(b)(1) does not require abandonment of statutory definition of disposable income for debtor with CMI greater than applicable median family income. “[T]his Court is compelled to adopt the reasoning of [In re Alexander, 344 B.R. 742 (Bankr. E.D.N.C. 2006),] and reject the majority position in all its variations. . . . Starting with the number on line 58 of Form B22C as the ‘present date’—which relies on the underlying concepts of ‘disposable income’ and ‘current monthly income’—the statute then requires courts to ‘calculate, estimate, or predict’ how much must be returned to general unsecured creditors over the applicable commitment period. In fact, this process is no different than what courts used to do in pre-BAPCPA practice except that courts previously calculated the plan return using the average, estimated, and fluid numbers in Schedules I and J rather than the average, estimated, and partially standardized numbers in Form B22C. . . . In ‘projecting’ a return to general unsecured creditors under the BAPCPA for above-median debtors, this Court’s view is that its new function is solely to multiply the net ‘disposable income’ figure as calculated on Form B22C by the applicable commitment period. No more, no less.”); In re Brady, 361 B.R. 765, 772–73 (Bankr. D.N.J. 2007) (“For above median income debtors, BAPCPA has supplanted the pre-BAPCPA practice of assessing the reasonableness of the debtors’ actual expenses, as they are reflected in Schedule J. There is no discretion woven into the statute to substitute the debtors’ Schedule J expenses for the section 707(b) standardized formula for the calculation for applicable and actual expenses. . . . Pursuant to section 1325(b)(1)(B), the resulting calculation of ‘disposable income’ is then ‘projected’ over the debtors’ applicable commitment period. . . . The simple and direct meaning of [projected disposable income] . . . is that the debtor’s disposable income, as calculated under the statute, which is projected to be received over the course of the applicable commitment period, must be dedicated to the payment of the unsecured creditors. In this regard, the phrase ‘projected disposable income,’ did not change as a result of the BAPCPA amendments. . . . The surplus income shown on the debtors’ Schedule I and J, while providing support for the feasibility of the debtors’ plan, does not serve to modify the calculation of the debtors’ projected disposable income according to the statute. . . . Schedule J does not contain certain deductions authorized under section 707(b) . . . . [W]e have unambiguous statutory language. While the legislative history does contain ‘clearly expressed legislative intent’ to identify debtors who can afford to repay their debts, and to compel them to do so, Congress established very clearly the fixed formulas for identifying the debtors who can afford to repay their unsecured debts. Congress’ chosen method of determining the debtors’ disposable income must be respected.”); In re Miller, 361 B.R. 224, 234–35 (Bankr. N.D. Ala. 2007) (“The Court adopts the line of cases finding that Form B22C is dispositive with respect to an above-median income debtor’s ‘projected disposable income.’ Section 1325(b)(3) clearly states that the amounts reasonably necessary to be expended for purposes of determining disposable income ‘shall’ be determined under § 707(b)(2)(A) and (B). The disposable income calculations made on Form B22C are drawn, not from the debtor’s Schedule J, but from the Internal Revenue Service standards and additional deductions allowed under § 707(b)(2). Those courts that argue Congress intended something more when it referred to ‘projected disposable income’ in § 1325(b)(1)(B) fail to address the fact that Congress defined ‘disposable income’ subsequently in § 1325(b)(2).”); In re Tuss, 360 B.R. 684, 692 (Bankr. D. Mont. 2007) (Citing In re Tranmer, 355 B.R. 234 (Bankr. D. Mont. 2006), “‘disposable income’ is defined at § 1325(b)(2) for purposes of determining ‘projected disposable income’ under § 1325(b)(1)(B) . . . . This Court did not agree with [In re Jass, 340 B.R. 411 (Bankr. D. Utah 2006),] that the Form B22C disposable income may be adjusted for a substantial change of circumstances. . . . [T]his Court will apply a mechanical test in which its discretion to determine the reasonableness of a debtor’s expenses in calculating disposable income has been curtailed by BAPCPA.”); In re Rotunda, 349 B.R. 324, 329–33 (Bankr. N.D.N.Y. 2006) (“[A]s noted by the court in [In re Alexander, 344 B.R. 742 (Bankr. E.D.N.C. 2006)], it is not for the Court to second guess Congress despite the fact that the statute, as written, may result in a confirmed plan that is contrary to the view expressed by President Bush that the new law would ensure that ‘Americans who have the ability to pay will be required to pay back at least a portion of their debts.’ . . . The argument that Congress intended something more when it referred to ‘projected’ in Code § 1325(b)(1)(B) fails to address the fact that Congress defined ‘disposable income’ after that provision, in Code § 1325(b)(2). . . . [P]rojecting disposable income based on an average of six months’ income after certain standard deductions and payment on secured and priority debt is no less realistic than the figures used in Schedules I and J for purposes of proposing a feasible plan. . . . [W]ith the enactment of BAPCPA, the court’s discretion to review the totality of circumstances and determine the reasonableness of a debtor’s expenses in calculating disposable income has been curtailed[.]”); In re Quarterman, 342 B.R. 647, 650–51 (Bankr. M.D. Fla. 2006) (Disposable income is current monthly income less five statutory deductions. “BAPCPA changes do not obviate the explicit requirement that a debtor use all of his or her disposable income to fund the plan. . . . In calculating a debtor’s disposable income, it is necessary to start with the debtor’s current monthly income, which is the debtor’s average (gross) monthly income for the previous six months, plus amounts others, i.e., the debtor’s nonfiling spouse in a single case, regularly contributed to household expenses of the debtor or the debtor’s dependents, less other (non-applicable) exclusions, and reduce from it the following amounts: (1) income that is included in current monthly income that was not ‘received’ by the debtor; (2) ‘amounts reasonably necessary to be expended’ by the debtor, whether under § 1325(b)(2)(A) and (B) or section 707(b); (3) ‘child support payments, foster care payments, or disability payments for a dependent child . . . to the extent reasonably necessary to be expended for such child’; (4) amounts required to repay a loan described in section 362(b)(19) (loans from qualified plan); and (5) amounts withheld from wages or received by employers as contributions to employee retirement plans.”); In re Barr, 341 B.R. 181, 184–85 (Bankr. M.D.N.C. 2006) (“There are new definitions of the income and expenses to be used for determining disposable income that are much different than under the former statute. These definitions are detailed and inflexible, particularly as to expenses and deductions for above-median-income debtors. As to such debtors, it appears that Congress intended to adopt a specific test to be rigidly applied rather than a standard to be applied according to the facts and circumstances of the case. Calculating ‘disposable income’ for above-median-income debtors under new section 1325(b) is now separated from a review of Schedules I and J and no longer turns on the court’s determination of what expenses are reasonably necessary for the debtor’s support. . . . The use of ‘shall’ in section 1325(b)(3) is mandatory and leaves no discretion with respect to the expenses and deductions that are to be deducted in arriving at disposable income. . . . Depending upon whether a debtor’s actual expenses and deductions are greater or less than those specified in section 707(b)(2), an above-median-income debtor may have “excess” income that such debtor is not required to commit to the payment of unsecured creditors.”).

 

71  See 11 U.S.C. § 101(10A)(A), 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.

 

72  359 B.R. 290 (Bankr. D. Nev. 2007) (probably overruled by Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008)).

 

73  359 B.R. at 297–300.

 

74  361 B.R. 302 (B.A.P. 1st Cir. 2007).

 

75  361 B.R. at 312–15. Accord Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008) (Murphy, Brorby, Tymkovich) (Rejecting Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), and embracing Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. 2008), projected disposable income is forward-looking calculation in which the starting point for the income side is presumed to be current monthly income as defined in § 101(10A)(A)(i) but subject to a showing of substantial change in circumstances.), aff’d, 130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010); McCarty v. Lasowski (In re Lasowski), 575 F.3d 815, 819 (8th Cir. Aug. 12, 2009) (Bye, Colloton, Gruender) (Citing Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. Oct. 27, 2008) (Wollman, Beam, Riley), and Nowlin v. Peake (In re Nowlin), 576 F.3d 258 (5th Cir. July 17, 2009) (King, Dennis, Elrod), because “projected” disposable income includes changes in financial circumstances that are “reasonably certain to occur during the term of the debtor’s proposed plan,” the completion of pension loan repayments must be accounted for in the calculation of projected disposable income.), aff’g 384 B.R. 205 (B.A.P. 8th Cir. Mar. 31, 2008) (Schermer, Federman, McDonald), rev’g 375 B.R. 526 (Bankr. E.D. Ark. Sept. 14, 2007) (Taylor); In re Turner, 574 F.3d 349 (7th Cir. July 20, 2009) (Posner, Sykes, Van Bokkelen) (Citing Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. 2008), and Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), when plan states that debtor intends to abandon house to mortgagee, monthly mortgage payment cannot be subtracted to determine projected disposable income.), rev’g 384 B.R. 537 (Bankr. S.D. Ind. Mar. 27, 2008) (Coachys); Nowlin v. Peake (In re Nowlin), 576 F.3d 258 (5th Cir. July 17, 2009) (King, Dennis, Elrod) (Embracing Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. 2008), and Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), and rejecting Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), “forward-looking” view of projecting disposable income permits consideration of present or reasonably certain future events that substantially change debtor’s financial situation.), aff’g Nos. H-07-2446, 06-34785, 2007 WL 4623043 (S.D. Tex. Dec. 28, 2007) (unpublished) (Hughes), aff’g 366 B.R. 670 (Bankr. S.D. Tex. Apr. 11, 2007); Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. 2008) (Wollman, Beam, Riley) (Rejecting Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), for debtor with CMI greater than applicable median family income, disposable income calculated on Form B22C is only starting point for projected disposable income test.); American Express Bank v. Smith (In re Smith), 418 B.R. 359 (B.A.P. 9th Cir. Oct. 5, 2009) (Montali, Jury, Hollowell) (Citing Ransom v. MBMA America Bank (In re Ransom), 577 F.3d 1026 (9th Cir. Aug. 14, 2009), and distinguishing Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. June 23, 2008), for debtors with CMI greater than applicable median family income, § 1325(b)(2) and (b)(3) are applied sequentially in a two-step process: an expense must first be reasonably necessary for the maintenance and support of the debtor or the debtor’s dependents and only then is the amount determined in accordance with § 707(b)(2).), rev’g 401 B.R. 469 (Bankr. W.D. Wash. Nov. 14, 2008) (Snyder); Yarnall v. Martinez (In re Martinez), 418 B.R. 347 (B.A.P. 9th Cir. Oct. 5, 2009) (Montali, Jury, Hollowell) (Citing Ransom v. MBMA America Bank (In re Ransom), 577 F.3d 1026 (9th Cir. Aug. 14, 2009), and distinguishing Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. June 23, 2008), because expenses for projected disposable income test purposes are determined using a forward-looking two-step process, mortgage payments on a wholly unsecured mortgage that will be stripped off through the plan are not “reasonably necessary” for the maintenance and support of the debtor and are not an allowable expense.); Hildebrand v. Thomas (In re Thomas), 395 B.R. 914, 922–23 (B.A.P. 6th Cir. 2008) (Gregg, McIvor, Shea-Stonum) (Citing Hildebrand v. Petro (In re Petro), 395 B.R. 369 (B.A.P. 6th Cir. 2008), although debtor with CMI greater than applicable median family income is entitled by § 707(b)(2)(A)(iii)(I) to deduct scheduled and contractually due payment on account of secured debt notwithstanding surrender through plan, because projected disposable income is unhinged from statutory definition of disposable income, bankruptcy court must consider changes in income and expenses—including surrender of collateral through plan—to determine entitlement of unsecured creditors at confirmation.); Hildebrand v. Petro (In re Petro), 395 B.R. 369, 376 (B.A.P. 6th Cir. 2008) (Fulton, McIvor, Shea-Stonum) (Rejecting Maney v. Kagenveama (In re Kagenveama), 541 B.R. 868 (9th Cir. 2008), when debtor with CMI greater than applicable median family income suffers unemployment during six-month calculation period for CMI, projected disposable income is not “mechanical” application of § 1325(b)(1) and (2) but instead requires consideration of debtor’s actual ability to pay unsecured creditors. “The mechanical approach ignores the policy behind the amendments to this section of the Bankruptcy Code and the remedial nature of the code, generally.”); Spears v. Reding (In re Spears), 415 B.R. 855 (M.D. Ala. Sept. 24, 2009) (Thompson) (Citing Nowlin v. Peake (In re Nowlin), 576 F.3d 258 (5th Cir. 2009), disposable income is presumption or starting point in projected disposable income calculation that can be rebutted by evidence of present or reasonably certain future events that will affect income or expenses; although debtors are entitled by § 707(b)(2)(A)(iii)(I) to Local Standards Transportation Ownership Costs amount to determine disposable income, that amount is then a presumption that can be overcome by totality of circumstances, including that actual car ownership expense is less than Local Standards amount.); In re Baud, 415 B.R. 291 (E.D. Mich. Sept. 3, 2009) (Edmunds) (Borrowing from both “mechanical” and “forward-looking” schools, disposable income is starting point and is presumptively the amount “projected” for § 1325(b) purposes absent rebutting evidence of “changed circumstances”; when disposable income is negative on Form B22C and trustee does not present evidence of changed circumstances, debtors have no projected disposable income, applicable commitment period calculation in § 1325(b)(4) “does not apply” and debtors are not required to propose a 60-month plan.); Spalding v. Truman, No. 4:08-CV-064-Y, 2008 WL 4566459, at *4 (N.D. Tex. Oct. 14, 2008) (unpublished) (Means) (Criticizing Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), “the reading of ‘disposable income’ that most comports with the purposes and language of the code recognizes disposable income under § 1325(b)(2)(A) as the starting point in determining projected disposable income. . . . Even in the complex and often confusing world of bankruptcy, a court need not ignore the reality of the facts presented to it.”), aff’g in part In re Zinser, Nos. 07-41304-RFN-13, 07-41863-DML-13, 2007 WL 3479604 (Bankr. N.D. Tex. Nov. 15, 2007) (unpublished) (Nelms); In re Romero, No. 09-20980, 2010 WL 572702, at *1 (Bankr. D. Wyo. Feb. 17, 2010) (McNiff) (Citing Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. Nov. 13, 2008) (Murphy, Brorby, Tymkovich), “[a] debtor’s actual circumstances at the time of plan confirmation are properly taken into account in order to project, or forecast, how much income the debtor would actually receive during the plan commitment period.”); In re Davis, 425 B.R. 317, 320 (Bankr. S.D. Tex. Jan. 6, 2010) (Isgur) (Interpreting Nowlin v. Peake (In re Nowlin), 576 F.3d 258 (5th Cir. July 17, 2009) (King, Dennis, Elrod), one-time $10,000 bonus during six months before petition and anticipated completion of payments on a pension loan are changed circumstances that are “discrete and easily calculable by simple arithmetic”—justifying departure from Form B22C calculation of disposable income.); In re Odom, 406 B.R. 911 (Bankr. D. Colo. June 23, 2009) (Campbell) (When actual income at confirmation is greater than CMI on Form B22C, debtors are required to pay what they can afford to pay even when the difference in income is not “substantial.”); In re Padilla, No. 07-07495 ESL, 2009 WL 2898837, at *3 (Bankr. D.P.R. June 23, 2009) (Lamoutte) (Rejecting Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), and applying Kibbe v. Sumski (In re Kibbe), 361 B.R. 302 (B.A.P. 1st Cir. 2007), “[p]rojected disposable income is a forward looking concept based on reality and not controlled by Form B22C. On the other hand, the expense component is controlled by Form B22C, in part by the National Local Standards, and in part by actual expenses.”); In re White, 409 B.R. 330, 336 (Bankr. D. Md. June 23, 2009) (Schneider) (Disposable income calculated on Form B22C is presumptively projected disposable income absent “a substantial change in circumstances such that the numbers contained in Form B22C are not commensurate with a fair projection of the debtor’s budget in the future.”); In re Ponce, 406 B.R. 490 (Bankr. M.D. Pa. June 22, 2009) (Opel) (Crafting variation of “forward looking” approach to projected disposable income: changed circumstances within six months of filing or shortly thereafter will be considered when change increases or decreases disposable income by 20% or more; when 20% change is present, presumption that means test calculates projected disposable income is rebutted and nonexclusive list of seven factors will determine projected disposable income.); In re Kruse, 406 B.R. 833 (Bankr. N.D. Iowa June 11, 2009) (Kilburg) (Applying Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. 2008), projected disposable income for debtor with CMI greater than applicable median family income is determined from Schedules I and J and debtor’s testimony. $2,812 tax refund is included, but debtor is allowed to keep $1,875 to pay for prescription eyeglasses and vehicle repair expenses.); In re Reeves, 405 B.R. 135 (Bankr. D. Del. May 18, 2009) (Shannon) (Rejecting Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), and approving Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. 2008), and Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), “disposable income should be used as a starting point for the calculation of projected disposable income on the terms espoused by the forward-looking view.” When “actual gross income” is higher than amount shown on Form B22C and debtors deducted $800 per month for debt on real property they have surrendered, plan fails projected disposable income test.); In re Timothy, No. 08-28332, 2009 WL 1349741 (Bankr. D. Utah May 12, 2009) (unpublished) (Mosier) (Applying Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), negative disposable income on Form B22C is “special circumstance” that permits use of Schedules I and J to establish positive projected disposable income.); In re Juarez, No. 13-08-11174 SA, 2009 WL 2922802 (Bankr. D.N.M. Apr. 15, 2009) (Starzynski) (Citing Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), debtors presented no evidence of any substantial change in circumstances to overcome projected disposable income presumption based on adjusted Form B22C calculation.); In re Dotson, No. 08-62364, 2009 WL 1586554 (Bankr. N.D. Ohio Mar. 31, 2009) (unpublished) (Kendig) (Citing Hildebrand v. Thomas (In re Thomas), 395 B.R. 914 (B.A.P. 6th Cir. 2008), debtors with CMI greater than applicable median family income and negative disposable income at Line 59 on Form B22C must pay “monthly net income” from Schedule J for 60 months to satisfy projected disposable income test and applicable commitment period calculation.); In re Brown, No. 08-31279, 2009 WL 2873076, at *4 (Bankr. N.D.N.Y. Mar. 30, 2009) (Cangilos-Ruiz) (Because disposable income on Form B22C is only “first look” at projected disposable income, evidence that seasonal overtime distorted B22C calculation lowers projected disposable income and supports confirmation of plan based on Schedules I and J. “This court has followed a majority of courts in holding that monthly disposable income on Form [B]22C is a ‘first look’ at a debtor’s projected disposable income for the purposes of satisfying Code section 1325(b)(1). . . . Schedules I and J can inform that look.”); In re Greaves, No. 08-82965-TJM, 2009 WL 750285 (Bankr. D. Neb. Mar. 17, 2009) (Saladino) (Applying Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. 2008), debtor who will graduate from nursing school in three months and begin three-year graduate program fails projected disposable income test because debtor has ability to earn some income during graduate school, student loans may be deferred during graduate school and debtor will certainly have an increased income three years into the plan when graduate school is completed.); In re Mendelson, 412 B.R. 75 (Bankr. E.D.N.Y. Mar. 12, 2009) (Grossman) (Applying “forward-looking” notion of projected disposable income, debtor cannot deduct contractually due payments with respect to car in possession of ex-husband when debtor has no intent to make future payments.); In re Kelly, 416 B.R. 232, 237 (Bankr. E.D. Va. Mar. 2, 2009) (Mitchell) (“[T]he court is inclined to walk a middle path between those courts that strictly adhere to the means test calculation, however far it may be removed from reality, and those that use it as a mere ‘starting point.’ When the disposable income calculation leads to a result that is seriously distorted, this court believes it is proper to take the distortion into account in determining projected disposable income.”); In re Marti, No. BK07-41827-TLS, 2009 WL 269991 (Bankr. D. Neb. Feb. 2, 2009) (Saladino) (Applying Coop v. Frederickson (In re Frederickson), 545 F.3d 652 (8th Cir. 2008), disposable income for debtor with CMI less than applicable median family income is determined from Schedules I and J and is not based on Form B22C; debtor with sufficient income to pay unsecured creditors in full in regular monthly installments cannot confirm plan that would pay unsecured creditors in lump sum at indeterminate time in the future.); In re Johnson, 400 B.R. 639 (Bankr. N.D. Ill. Jan. 23, 2009) (Wedoff) (Attempting to “harmonize” §§ 101(10A) and 1325(b), when Schedule I shows less net income than is available as disposable income on Official Form B22C, projecting disposable income requires adjusting CMI to include income that will be received during the applicable commitment period.); In re Rahman, 400 B.R. 362 (Bankr. E.D.N.Y. Jan. 23, 2009) (Grossman) (Adopting “forward-looking” approach to both income and expense sides of projected disposable income test, debtor with CMI greater than applicable median family income cannot deduct secured debt payments with respect to house and car that plan proposes to surrender.); In re Becquer, 407 B.R. 435 (Bankr. S.D. Fla. Jan. 14, 2009) (Mark) (Modified version of “forward looking” approach determines income side of projected disposable income; in contrast, expense side is fixed “means test” deductions allowed by § 707(b)(2)(A) and (B) with “adjustments” when circumstances change between petition and confirmation.); In re Dixon, No. 08-09389, 2009 WL 36769 (Bankr. M.D. Tenn. Jan. 5, 2009) (Paine) (applying Hildebrand v. Petro (In re Petro), 395 B.R. 369 (B.A.P. 6th Cir. 2008), “in the name of uniformity”); In re Tholl, No. 07-22677, 2008 WL 5539800 (Bankr. D. Kan. Dec. 31, 2008) (unpublished) (Somers) (Applying Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), when Schedule I shows more income than Official Form B22C, debtor must present evidence that “substantial change in circumstances” has not occurred if plan funding is based on lower amount from Form B22C.); In re Miller, No. 07-22927, 2008 WL 5539804 (Bankr. D. Kan. Dec. 31, 2008) (unpublished) (Somers) (“Forward looking” approach in Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), applies to both income and expense components of projected disposable income test; surrender of property through plan is substantial change in circumstances that precludes secured debt deduction with respect to surrendered property.); In re Melvin, 411 B.R. 715 (Bankr. D. Kan. Dec. 22, 2008) (Somers) (Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), applies to both income and expense sides of projected disposable income test; debtor has burden to prove substantial change in circumstances when either income or expenses deviate from Form B22C.); In re Kenney, 399 B.R. 516 (Bankr. N.D. Okla. 2008) (Michael) (Citing Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), when debtors modify plan before confirmation to surrender home and reduce plan payment, higher amounts paid to trustee consistent with original plan are disposable income that must be paid to unsecured creditors notwithstanding that Form B22C reveals no disposable income.); In re Arrigo, 399 B.R. 700 (Bankr. D. Colo. 2008) (Romero) (Applying Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), loss of overtime and slight reduction in annual income are not “substantial” changes in circumstances; even if they were, changes favor confirmation of debtors’ plan when trustee proposes increasing payments in the face of decreasing income.); In re Almonte, 397 B.R. 659 (Bankr. E.D.N.Y. 2008) (Grossman) (Adopting Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), “crystal ball” approach to projected disposable income would exclude cash advances during six months before petition because it is not reasonable to expect debtor to take cash advances to fund plan.); In re Royal, 397 B.R. 88 (Bankr. N.D. Ill. 2008) (Hollis) (Rejecting Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), projected disposable income is forward-looking concept, and current monthly income is only a starting point—a rebuttable presumption—which is overcome by evidence from trustee that debtor with annualized income of $10,776 and two dependent children omitted from CMI a $2,400 earned income tax credit.); In re Niehoff, No. 08-21211, 2008 WL 4712820 (Bankr. E.D. Ky. Oct. 21, 2008) (unpublished) (Howard) (Citing In re Riggs, 359 B.R. 649 (E.D. Ky. 2007), and Hildebrand v. Petro (In re Petro), 395 B.R. 369 (B.A.P. 6th Cir. 2008), disposable income is determined from Schedules I and J.); In re Hilton, 395 B.R. 433 (Bankr. E.D. Wis. 2008) (McGarity) (Rejecting Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), when debtor’s income goes down during six months before petition, “least flawed” use of mechanical disposable income calculation is as a presumption that can be overcome by proof that income side is unreasonable.); In re Raulerson, 395 B.R. 157, 161 (Bankr. M.D. Fla. 2008) (Funk) (“[T]he Court agrees with those courts which hold that the term ‘projected’ was meant to require a re-examination of income over the life of a Chapter 13 plan giving ‘projected disposable income’ and ‘disposable income’ different meanings. . . . [T]he Court agrees that an above median debtor’s expenses are to be determined by reference to a debtor’s B22C instead of Schedule J . . . . To the extent that an above median debtor asserts that his or her expenses exceed those permitted by B22C, the Court will look to § 707(b)(2)(B)(i) to determine whether such expenses are permissible.”); In re Sanchez, 394 B.R. 574 (Bankr. D. Colo. 2008) (Brooks) (Rejecting Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), Chapter 13 debtors must propose three-year or five-year plan without regard to whether there is any disposable income; projected disposable income is forward-looking concept that is inconsistent with “snapshot” adopted by Ninth Circuit in Kagenveama.); In re Minahan, 394 B.R. 116 (Bankr. W.D. Va. 2008) (Stone) (Following In re Jass, 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.); In re DeThample, 390 B.R. 716, 722–23 (Bankr. D. Kan. 2008) (Nugent) (Adopting In re Lanning, 380 B.R. 17 (B.A.P. 10th Cir. 2007), and rejecting Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), projected disposable income requires consideration of future income and expenses, not just Form B22C. “If all income-driven decisions to be made in chapter 7 and 13 cases were to be made using only CMI and not actual current income and expense, there would be no purpose to requiring both schedules to be filed. . . . Projecting disposable income forward, or estimating it for the future requires not only consideration of the debtor’s past performance, but also of his current income and expenditures.”); In re Louviere, 389 B.R. 502, 506–09 (Bankr. E.D. Tex. 2008) (Parker) (“[T]he projected disposable income of the debtor may vary from the statutory disposable income calculation if ‘the debtor can show that there has been a substantial change in circumstances such that the numbers contained in Form [B]22C are not commensurate with a fair projection of the debtor’s budget in the future.’ . . . [T]he CMI calculation remains meaningful to the determination of projected disposable income under § 1325(b)(1)(B) only to the extent that the income stream upon which it is based remains constant. Once a substantial change in circumstances occurs which significantly alters the income stream once enjoyed in the pre-petition period by a Chapter 13 debtor, the utility of that [B]22C computation for the purpose of determining projected disposable income under § 1325(b)(1)(B) is undermined and it must be discarded under the statute in favor of a more contemporaneous net income calculation derived from Schedules I and J which recognizes and incorporates the changes occurring in the debtor’s real-life circumstances.”); In re Bentley, 387 B.R. 423 (Bankr. W.D.N.Y. 2008) (Ninfo) (Disposable income is determined using different formulas depending on whether the debtor’s income and expenses have increased or decreased between the petition and the effective date of the plan.); In re Liverman, 383 B.R. 604, 609–10 (Bankr. D.N.J. 2008) (Wizmur) (“If the debtors had no significant changes in their income or expenses at the time of confirmation of the Chapter 13 plan, the formulaic calculation required under § 1325(b)(2) to determine ‘disposable income’ would represent the debtors’ ‘projected disposable income.’ . . . [W]here substantial change in the debtors’ actual ability to fund a plan is shown, the formulaic calculation of disposable income may be modified to ‘project’ the reality of the debtors’ income and expenses going forward.”); In re French, 383 B.R. 402, 405 (Bankr. W.D. Ky. 2008) (Lloyd) (Declining to reconsider In re Risher, 344 B.R. 833 (Bankr. W.D. Ky. 2006), “projected disposable income is a forward looking concept requiring the Court to consider both future and historical finances of the Debtor. . . . Form B22C sets up a presumption that may be rebutted by the objecting party and the projected disposable income may be adjusted by the court accordingly.”); In re Phillips, 382 B.R. 153, 172, 166 (Bankr. D. Mass. 2008) (Feeney) (“[In re Briscoe, 374 B.R. 1 (Bankr. D.D.C. 2007),] strikes the right balance between interpreting the statute as written, while carving out an exception for those instances where a party in interest can demonstrate a change in circumstances giving rise to the applicable expense.” “Where an above-median income debtor is concerned, the debtor (or other party-in-interest) must demonstrate either a change or reasonably anticipated change in the debtor’s income using the methodology set forth in § 1325(b)(2) or a change in the circumstances giving rise to the applicable expense figures dictated by the Local and National Standards . . .  if he wishes to prove that his future income is any different from his current income.”); In re Lisenko, No. 07-32774, 2008 WL 780703, at *2 (Bankr. N.D.N.Y. Mar. 24, 2008) (unpublished) (Cangilos-Ruiz) (“This court finds persuasive the reasoning behind the . . . line of cases . . . [that] view Form [B]22C as a ‘first look’ and permit further inquiry when a debtor’s monthly disposable income differs markedly from monthly net income after accounting for the exempt income excluded on Form [B]22C. . . . [T]his court finds that a review of Debtor’s monthly disposable income, calculated on Form [B]22C historically at $438.00, may and should, at the time of confirmation, be followed by inquiry into the monthly net income stated on Schedule J of $866.49, when such disparity presents itself.”); In re Linn, No. 07-1593, 2008 WL 687448 (Bankr. N.D. W. Va. Mar. 10, 2008) (unpublished) (Flatley) (The calculation of projected disposable income required by BAPCPA will be followed except when a reduction in income renders the plan not feasible at confirmation.); In re Wilson, 397 B.R. 299, 317–20 (Bankr. M.D.N.C. 2008) (Waldrep) (Collecting cases and arguments, “this Court will join over forty other courts that conclude that Form B22C is simply the starting point for determining the debtor’s income for purposes of Section 1325(b)(1)(B). . . . Although the Court will presume that Form B22C correctly states the income of an above median income debtor, this presumption may be rebutted by consideration of the income shown on the debtor’s schedule I or other relevant evidence. On the other hand, expenses for the above median income debtor must be determined by Section 707(b)(2)(A) and (B), and may be adjusted by a showing of special circumstances.”); In re May, 381 B.R. 498 (Bankr. W.D. Pa. 2008) (Deller) (Because projected disposable income is forward-looking, Form B22C erects a rebuttable presumption that is the starting point in the hunt for projected disposable income.); In re Strickland, No. 07-10913-DHW, 2008 WL 205577 (Bankr. M.D. Ala. Jan. 24, 2008) (unpublished) (Williams) (For debtor with CMI greater than applicable median family income, projected disposable income calculated using means test creates presumption which is rebutted by evidence that actual expected income and expenses are different.); In re Mulally, No. 07-14699-BKC-PGH, 2007 WL 4556680 (Bankr. S.D. Fla. Dec. 19, 2007) (unpublished) (Hyman) (When income for debtors with CMI greater than applicable median family income increased after petition, income side of projected disposable income test is an adjusted form of Schedule I, but expenses are determined by the means test through § 1325(b)(3) and § 707(b)(2)(A).); In re Hughey, 380 B.R. 102, 105–06 (Bankr. S.D. Fla. 2007) (Hyman) (“The [Kibbe v. Sumski (In re Kibbe), 361 B.R. 302 (B.A.P. 1st Cir. 2007),] court determined that Form B22C is the starting point for determining projected disposable income. This Court agrees. To the extent that a debtor’s actual anticipated future income is different than a debtor’s historical current monthly income, actual anticipated future income should be used to determine a debtor’s payments in order to ensure that a debtor’s Chapter 13 plan is feasible and capable of completion by the debtor. . . . However, § 1325(b)(3) instructs that expenses for an above median income debtor are fixed and ‘shall be determined in accordance with subparagraphs (A) and (B) of section 707(b)(2).’); In re Lacny, No. 07-50184, 2007 WL 3216627, at *1 (Bankr. E.D. Ky. Oct. 25, 2007) (unpublished) (Scott) (Applying In re Riggs, 359 B.R. 649 (Bankr. E.D. Ky. 2007), projected disposable income is determined “only by reference to Schedules I and J” and “[r]egardless of the label attached to the expenses on Schedule J, the expenses must be ‘reasonably necessary.’”); In re Rains, No. 07-40472 EDJ, 2007 WL 2900534, at *2 (Bankr. N.D. Cal. Oct. 2, 2007) (unpublished) (“[T]he calculation of the debtors’ projected disposable income is governed by the information the debtors provided in their Schedules I (Income) and J (Expenses), and . . . the debtors are not entitled to a fixed allowance of any expense that is in excess of their actual expenses that are reasonably necessary for their maintenance and support, even if such a fixed allowance might be included in the ‘means test’ under § 707(b).”); In re Ries, 377 B.R. 777 (Bankr. D.N.H. 2007) (Citing Kibbe v. Sumski (In re Kibbe), 361 B.R. 302 (B.A.P. 1st Cir. 2007), and In re Teixeira, 358 B.R. 484 (Bankr. D.N.H. 2006), projected disposable income is forward-looking concept that produces a rebuttable presumption.); In re McCarty, 376 B.R. 819, 824–25 (Bankr. N.D. Ohio 2007) (“This Court agrees with the finding of the second ‘camp’ that the word projected cannot be ignored and must be given some independent meaning. . . . [T]his Court will not adopt debtors’ purely mechanical approach . . . . The trustee’s approach . . . is also not well taken to the extent that it relies solely on information listed on Schedules I and J to determine whether debtors have additional funds available to pay into a chapter 13 plan. . . . [T]his approach . . . ignores the fact that Congress has re-defined ‘disposable income’ to now specifically exclude certain items which may be reflected on a debtor’s Schedule[s]. . . . In order to give meaning to (1) the word ‘projected’ and (2) the new definition of ‘disposable income,’ this Court finds that ‘projected disposable income’ under § 1325(b)(1)(B) must reflect all of the income that debtors anticipate receiving over the applicable commitment period minus any Disposable Income Exclusions.”); In re Chriss-Price, 376 B.R. 648, 652 (Bankr. M.D. Tenn. 2006) (“‘[D]isposable income,’ as defined by 11 U.S.C. § 1325(b)(2), is not necessarily a debtor’s ‘projected disposable income’ for purposes of 11 U.S.C. § 1325(b)(1)(B). . . . [U]nder 11 U.S.C. § 1325(b), a debtor must propose to pay unsecured creditors the number resulting from Official Form B22C, unless the proof shows that this number does not adequately represent the debtor’s budget projected into the future.”); In re Warren, No. 07-30721-DHW, 2007 WL 2683837, at *3 (Bankr. M.D. Ala. Sept.  6, 2007) (unpublished) (Citing In re Arsenault, 370 B.R. 845 (Bankr. M.D. Fla. 2007), “[T]he Form [B]22C determination of disposable income creates a presumption that the debtor must pay that amount to unsecured creditors over the term of the plan. That presumption may, however, be rebutted with evidence that the debtor’s expectancy of the future alters that result.”); In re Briscoe, 374 B.R. 1, 18–20 (Bankr. D.D.C. 2007) (“I agree with the [In re Jass, 340 B.R. 411 (Bankr. D. Utah 2006),] and [In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006),] line of cases that the phrase ‘projected disposable income’ in § 1325(b)(1) refers to income that it is reasonable to project that the debtor will receive. . . . Where an above-median income debtor is concerned, the debtor (or other party-in-interest) must demonstrate either a change or reasonably anticipated change in the debtor’s income using the methodology set forth in § 1325(b)(2) or a change in the circumstances giving rise to the applicable expense figures dictated by the Local and National Standards . . . if he wishes to prove that his future income is any different from his current income.”); In re Plumb, 373 B.R. 429, 436 (Bankr. W.D.N.C. 2007) (Citing In re Edmunds, 350 B.R. 636 (Bankr. D.S.C. 2006), “although debtors must use Form B22C as the starting point for determining projected disposable income, they must also take into consideration Schedules I and J when making that calculation. Because projected disposable income is a forward-looking concept, calculating it in this way will best determine debtors’ actual ability to pay their creditors.”); In re Purdy, 373 B.R. 142, 152 (Bankr. N.D. Fla. 2007) (“‘Projected disposable income,’ as used in 11 U.S.C. § 1325(b)(1)(B), is a forward-looking term that is calculated based on a Debtor’s current projected income, not the historical average income for the six months prior to filing the petition. A Chapter 13 debtor’s ‘projected disposable income,’ as calculated by Form B22C, will be presumed accurate unless the debtor or trustee can show that the numbers contained in Form B22C do not reflect a fair projection of the debtor’s budget into the future because the debtor has experienced a substantial change in circumstances.”); In re Arsenault, 370 B.R. 845, 850–52 (Bankr. M.D. Fla. 2007) (“[R]igid adherence to a debtor’s pre-petition income history would produce results at odds with both Congressional intent and common sense. . . . Form B22C is the presumptive starting point for making that determination and . . . reasonably anticipated additional income should be included in calculating the debtor’s projected disposable income. . . . Contrary to the trend of the cases . . . it is the view of this Court that the reasons for looking beyond the calculations set forth in Form B22C for calculating income have no applicability to the calculation of expenses. In determining expenses for above-median debtors, courts must deal with a different subsection: section 1325(b)(3). Thus, the calculations for above-median-income debtors must be done under Form B22C without resort to Schedule J. . . . [T]here is no ambiguity . . . that Congress, on the deduction side, meant to take away all judicial discretion in the specific deduction areas set forth in section 707(b)(2)(A) and (B) and in those areas in which the Internal Revenue Service (“IRS”) standards apply. . . . ‘The use of “shall” in section 1325(b)(3) is mandatory and leaves no decisions with respect to the expenses and deductions that are to be deducted in arriving at disposable income.’”); In re Puetz, 370 B.R. 386, 388–89 (Bankr. D. Kan. 2007) (“The monthly disposable income reported on Form B22C is presumptively the debtor’s ‘projected disposable income’ under § 1325(b)(1)(B) unless the debtor can show special circumstances warranting an adjustment to either the debtor’s current monthly income or expenses. . . . The Court finds Form B22C presumptively determines Debtors’ monthly disposable income, not the comparison of Schedules I and J, because Debtors have above-median income.”); In re Meek, 370 B.R. 294 (Bankr. D. Idaho 2007) (Projected disposable income for debtor with CMI greater than applicable median family income is bound neither by CMI nor by expense amounts in § 707(b)(2)(A) and (B); rather, both income and expense must be “projected” by consideration of actual income and expenses and content of the plan.); In re Mullen, 369 B.R. 25 (Bankr. D. Or. 2007) (Disposable income calculated consistent with Form B22C creates presumption of projected disposable income that is rebutted by evidence in Schedules I and J or elsewhere that actual disposable income is different.); In re Knippers, No. 06-34841-H3-13, 2007 WL 1239297, at *4 (Bankr. S.D. Tex. Apr. 26, 2007) (unpublished) (Citing In re Slusher, 359 B.R. 290 (Bankr. D. Nev. 2007), “the definition of ‘disposable income,’ as calculated pursuant to Form B22C, is not a definition for the term ‘projected disposable income’ within Section 1325(b)(1)(B), but creates a presumption regarding the meaning of that term.”); In re Watson, 366 B.R. 523, 531–32 (Bankr. D. Md. 2007) (Projected disposable income does not mean disposable income projected over life of plan; calculation in Form B22C is a starting point for projected disposable income inquiry. “The Court believes that the language of § 1325(b)(1)(B) is clear and unambiguous—section 1325(b)(1)(B)’s requirement that a plan propose to pay ‘projected disposable income’ means that the number resulting from Form B22C is a starting point for the Court’s inquiry only. . . . ‘[D]isposable income’ as calculated on Form B22C is the presumptive ‘projected disposable income’ for application of Section 1325(b)(1)(B). However, by evidence a party may demonstrate ‘a substantial change in circumstance such that the numbers contained in Form B22C are not commensurate with a fair projection of the debtor’s budget in the future.’ . . . If the presumption is rebutted, a projected budget based upon the evidence, reflecting projected earnings and projected reasonable necessary expenses, will govern the determination of ‘projected disposable income’ for purposes of confirmation of the plan.”); In re Grant, 364 B.R. 656, 666–67 (Bankr. E.D. Tenn. 2007) (“Based upon the reasons articulated by the [In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006),] court, . . . the court agrees with the majority view and finds that ‘projected disposable income’ under § 1325(b)(1)(B) is not synonymous with ‘disposable income’ under § 1325(b)(2). . . . A debtor’s monthly disposable income as reflected on Form B22C is the starting point by which a court determines the debtor’s projected disposable income, but this figure can be rebutted by evidence that the debtor’s actual net disposable income as of the filing date, reflected on Schedules I and J, as well as other evidence that the debtor’s circumstances have changed as of the effective date of the plan.”); In re Upton, 363 B.R. 528, 532–35 (Bankr. S.D. Ohio 2007) (Adopting“hybrid” approach, projected disposable income is not bound by Form B22C but includes consideration of income and expenses at effective date of plan using Schedules I and J even for debtor with CMI greater than applicable median family income. “This Court agrees with the Trustee that reference to Schedules I and J is the appropriate method for analyzing and computing ‘projected disposable income’ under 11 U.S.C. § 1325(b)(1)(B). However, it is limited by the directive that certain income is specifically excluded from the calculation of ‘current monthly income.’ 11 U.S.C. § 101(10A). . . . [C]onsideration of benefits received under the Social Security Act is inappropriate for determining ‘projected disposable income.’”); In re Edmondson, 363 B.R. 212, 214–18 (Bankr. D.N.M. 2007) (“[A]bove-median income debtors are restricted to the expenses proscribed [sic] by the IRS Standards as reported on Form B22C, but . . . in computing the income side of the ‘projected disposable income’ calculus, it is appropriate to consider a debtor’s actual income as reported on Schedule I. . . . ‘[P]rojected disposable income’ must take into account the debtor’s actual current income as reported on Schedule I, projected to include the actual income the debtor expects to receive over the life of the plan. . . . [S]trict adherence to Form B22C will result in absurd and illogical results, i.e., denial of confirmation as de facto infeasible because a debtor’s actual income is significantly lower than that reflected on Form B22C, or, conversely, confirmation of a plan that pays little or nothing to unsecured creditors based on the figures contained in Form B22C despite a debtor’s ability to pay more as reflected on Schedule I. . . . On the expense side of the ‘projected disposable income’ equation, above-median income debtors are specifically restricted by 11 U.S.C. § 1325(b)(3), which limits a debtor’s reasonable expenses to the standardized expenses under the IRS Guidelines as reported on Form B22C.”); In re Carlton, 362 B.R. 402, 406–11 (Bankr. C.D. Ill. 2007) (Projected disposable income is not bound by Form B22C and is not based only on CMI. “[A] court must consider, at a minimum, a debtor’s actual income expected to be earned or available during the applicable commitment period in order to project disposable income available for plan payments. . . . The first step in calculating projected disposable income is to determine the actual income of the Debtors which is expected to be earned or be available to fund plan payments. That income is disclosed in Schedule I. . . . The second step . . . is to determine the reasonable and necessary expenses of the Debtors which may be deducted from their gross income. . . . For pre-BAPCPA cases and for current cases involving under-the-median-income debtors, expenses used in computing projected disposable income are set forth on Schedule J and are reviewed under the subjective ‘reasonably necessary’ standard. For BAPCPA cases with over-the-median-income debtors, however, reasonably necessary is specifically defined as those expenses set forth in § 707(b)(2). Section 707(b)(2) allows expenses based on charts, formulae, and some proven actual expenditures. . . . The Court does not use its own judgment on reasonableness or necessity but, rather, must determine whether a particular expense is allowed by § 707(b)(2). If an expense is allowed under § 707(b)(2), it meets the new definition of ‘reasonably necessary’ and no subjective review of the expense by the Court is permitted. This Court cannot disallow an expense otherwise allowable under § 707(b)(2) simply because it thinks the expense is unreasonable or unnecessary any more than this Court can allow expenses not set forth in § 707(b)(2) simply because it deems the expenses reasonable and necessary.”); In re Riggs, 359 B.R. 649, 652–53 (Bankr. E.D. Ky. 2007) (“This court agrees with the line of reasoning articulated so well by the [In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006),] court, and finds that the Debtors’ projected disposable income must be determined by reference to their Schedules I and J.”); In re Hall, No. 06-71296, 2007 WL 445517, at *2 (Bankr. C.D. Ill. Feb. 12, 2007) (unpublished) (Citing In re Foster, No. 05-50448-HCD, 2006 WL 2621080 (Bankr. N.D. Ind. Sept. 11, 2006) (unpublished), because projected disposable income is different from disposable income, the “CMI analysis” in Form B22C is the “initial but not the ultimate measure of the debtor’s financial condition and ability to fund their plan.”); In re LaPlana, 363 B.R. 259, 265–66 (Bankr. M.D. Fla. 2007) (Because projected disposable income is not bound by mathematical formula in § 1325(b), it is appropriate for plan to capture future income tax refunds. “[T]he Court adopts the rationale articulated in [In re Devilliers, 358 B.R. 849 (Bankr. E.D. La. 2007)], [In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006)], and other similar cases. The means test is a useful tool to initially calculate an above median income debtor’s disposable income, at a static point in time. However, the test does not calculate the debtor’s projected disposable income, which the debtor then must contribute to his Chapter 13 plan. . . . Rather, courts must consider changes in circumstances, both increases and decreases to income and expenses, to a debtor’s financial situation, being always guided by the allowed methodology set forth in the means test. . . . The key date for determining projected disposable income is the date the court confirms the debtor’s Chapter 13 plan . . . . [S]ince the word ‘projected’ modifies the term ‘disposable income’ in Section 1325(b)(1)(B), the Court shall consider ‘not only a debtor’s historical income and expenses, but also his or her anticipated income and expenses when confirming a plan.’”); In re Zimmerman, No. 06-31086, 2007 WL 295452, at *6–*8 (Bankr. N.D. Ohio Jan. 29, 2007) (unpublished) (Income side of projected disposable income begins with CMI, but departure from CMI is appropriate whenever financial circumstances have changed. “This court declines to follow the reasoning in [In re Alexander, 344 B.R. 742 (Bankr. E.D.N.C. 2006)], finding such reasoning unpersuasive in that it fails to give any meaning or effect at all to the terms ‘projected’ and ‘to be received in the applicable commitment period’ found in § 1325(b)(1)(B). Instead, the court finds the reasoning in [In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006),] and its progeny persuasive and concludes that ‘projected disposable income’ is a forward-looking concept that is not synonymous with ‘disposable income’ as defined in § 1325(b)(2). . . . ‘[P]rojected disposable income’ is not determined simply by subtracting applicable expenses from ‘current monthly income,’ . . . . [I]n determining a debtor’s projected disposable income to be received during the term of the Chapter 13 plan, the court will first look at debtor’s ‘current monthly income’ as defined in § 101(10A) and as limited in § 1325(b)(2). The court will presume that figure is the income projected to be received by the debtor during the term of the Chapter 13 plan unless the debtor, the trustee, or an unsecured creditor who has objected to confirmation of the plan can show that a substantial change in circumstances exists such that the court may conclude that the presumed figure does not reasonably project debtor’s income in the future. . . . Congress chose to incorporate into the Chapter 13 process an average over time rather than just a snapshot view of debtor’s income . . . . [T]he court will not simply rely on Schedule I, which constitutes such a snapshot view.”); In re Gordon, 360 B.R. 679, 683 (Bankr. S.D. Cal. 2007) (“This Court has stated its view that the B22C calculation is important, but not controlling on plan confirmation because § 1325(b)(1)(B) requires commitment of ‘projected disposable income’ on a going-forward basis, not historical CMI or ‘disposable income’ without regard to intervening changes in employment or other circumstances.”); In re Devilliers, 358 B.R. 849, 858–63 (Bankr. E.D. La. 2007) (To give meaning to “projected” in § 1325(b)(1)(B), court will consider not only historical income and expenses but also anticipated income and expenses; IRS standard deductions substitute for actual expenses, providing a ceiling and also, initially, a floor that trustee can challenge after confirmation. Citing In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006), “since ‘projected’ modifies ‘disposable income’ in § 1325(b)(1)(B), the Court is required to consider not only a debtor’s historical income and expenses, but also his or her anticipated income and expenses when confirming a plan. . . . By modifying all deductions by the general requirements of applicability, reasonableness, and necessity, Congress avoided a rigid application of the IRS guidelines. . . . As a historical record, Form B22C only reflects expenses incurred pre-petition. . . . [D]ebtor’s historical payments cannot be the sole basis for calculating future disposable income. Rather, the type of expenses allowed as deductions on Form B22C may be considered in the calculation of projected disposable income. . . . Instead of schedule J, Congress has directed the utilization of IRS standard deductions. . . . [T]he IRS standard deductions are the initial basis for calculating disposable income. If Trustee determines that, for a sustained period of time, a debtor’s actual post confirmation expenditures differ substantially from the IRS standard deductions, then Trustee may elect to challenge the calculation of disposable income under § 1329 as inclusive of unnecessary or unreasonable expenses.”); In re Teixeira, 358 B.R. 484, 486–87, 487 n.6 (Bankr. D.N.H. 2006) (Citing In re Kibbe, 342 B.R. 411 (Bankr. D.N.H. 2006), In re Jass, 340 B.R. 411 (Bankr. D. Utah 2006), and In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006), because “projected disposable income” in § 1325(b)(1)(B) means something different than “disposable income” in § 1325(b)(2), debtor with CMI greater than applicable median family income who experiences a change in income between B22C and Schedule I may rebut presumption that disposable income and projected disposable income are the same. “[T]he Court substantially adopts the model set forth in In re Jass. There shall be a presumption that there has been no substantial change in the debtor’s income and, therefore, that ‘disposable income’ is the same as ‘projected disposable income.’ . . . [I]n ordinary cases, below-median and above-median debtors will determine their ‘disposable income’ pursuant to section 1325(b)(2) by subtracting expenses from ‘current monthly income.’ In this calculation, below-median debtors shall refer to Schedule J for expenses, and above-median debtors shall proceed to section 1325(b)(3) and deduct standard expenses pursuant to section 707(b). . . . The resulting ‘disposable income’ will also be the ‘projected disposable income’ for purposes of section 1325(b)(1)(B). A moving party may rebut the presumption of no change by ‘show[ing] that there has been a substantial change in circumstances such that the numbers contained in Form B22C are not commensurate with a fair projection of the debtor’s budget in the future.’ . . . If the presumption is rebutted, below-median debtors will use Schedule I to determine income and Schedule J to determine expenses, as set forth in Kibbe. Above-median debtors will use income from Schedule I to determine income, but will continue to deduct the standard expenses permitted under sections 1325(b)(3) and 707(b).” In a footnote: “On this last point—how to calculate the expenses of an above-median debtor whose circumstances have changed—the Court parts ways with In re Jass, which instructs such debtors to use ‘Schedules I and J to determine the debtor’s “projected disposable income.”’ . . . The plain language of section 1325(b)(3) instructs that an above-median debtor’s expenses ‘shall be determined in accordance with subparagraphs (A) and (B) of section 707(b)(2).’ . . . The Court sees no reason to deviate from this when a debtor has experienced a change in circumstances.”); In re Pak, 357 B.R. 549, 552 (Bankr. N.D. Cal. Dec. 14, 2006) (Tchaikovsky) (“The Court agrees with the [In re Jass, 340 B.R. 411 (Bankr. D. Utah 2006),] court and its progeny that the more reasonable construction of [the word] ‘projected’ is ‘estimated’ or ‘predicted.’ . . . In determining whether a plan provides all of the debtor’s ‘projected disposable income,’ a court should attempt to predict what the debtor’s disposable income during the term of plan will be, using the definition of ‘current monthly income’ set forth in 11 U.S.C. § 101(10A).”), aff’d, 378 B.R. 257 (B.A.P. 9th Cir. 2007), overruled by Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008); In re Bossie, No. A06-00432-DMD, 2006 WL 3703203, at *2 (Bankr. D. Alaska Dec. 12, 2006) (unpublished) (“The court in [In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006),] concluded that projected disposable income ‘must be based upon the debtor’s anticipated income during the term of the plan, not merely an average of her prepetition income.’ A majority of bankruptcy courts facing this issue have reached a similar conclusion. I concur with the majority view. Here, the debtors’ plan can be based on their anticipated, or projected, income during the term of the plan.”); In re Casey, 356 B.R. 519, 523–24 (Bankr. E.D. Wash. 2006) (“This Court is in agreement with . . . In re Jass, 340 B.R. 411 (Bankr. D. Utah 2006). . . . 1325(b)(1)(B)’s requirement that a plan propose to pay ‘projected disposable income’ means that the number resulting from Form B22C is a starting point for the Court’s inquiry only. . . . It finds that the historical ‘disposable income’ calculation newly created under § 1325(b)(2) is not dispositive of the ‘projected disposable income’ amount needed to fund a chapter 13 plan. . . . [F]or above-median income debtors, the disposable income calculated on Form B22C, as modified by any anticipated change in financial circumstances known at the time of confirmation, constitutes ‘projected disposable income’ for purposes of § 1325(b)(1).”); In re Fuller, 346 B.R. 472 (Bankr. S.D. Ill. 2006) (Income side of projected disposable income test is not confined to CMI as determined in Official Form B22C; Schedule I must be consulted to determine actual income at the petition; for debtors with CMI less than applicable median family income, expenses are actual expenses from Schedule J; for debtors with CMI greater than applicable median family income, expenses are fixed by § 1325(b)(3) and are determined using Form B22C.); In re Gress, 344 B.R. 919, 922–23 (Bankr. W.D. Mo. 2006) (“Congress intended to take away discretion from the courts as to higher income debtors, who were seen as abusers of the system. Arguably, for that reason, a mechanical test . . . should be applied . . . . [H]owever, the use of the means test in this fashion allows debtors to propose plan payments based on a sort of parallel universe, which sometimes has little or nothing to do with their actual situation. For that reason, the courts in this district have previously found that Congress could not have intended a purely mechanical application of the means test to determine the amount above-median debtors are required to pay to unsecured creditors. Instead, the Form B22C serves merely as a starting point in determining the amount of projected disposable income available to unsecured creditors.”); In re Risher, 344 B.R. 833, 836–37 (Bankr. W.D. Ky. 2006) (“The ‘projected disposable income’ for 11 U.S.C. § 1325(b)(1)(B) plan payments is based on the debtor’s actual anticipated income over the term of the plan and not just by a strict application of the statutory definition of ‘current monthly income.’ . . . Had Congress intend ‘projected disposable income’ to be synonymous with section 1325(b)(2)’s ‘disposable income’ Congress could have deleted the word ‘projected’ from section 1325(b)(1)(B) or defined ‘projected gross income,’ rather than only ‘disposable income,’ in section 1325(b)(2). . . . [T]he court agrees with the conclusion of [In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006),] that ‘“projected disposable income” must be based upon the debtor’s anticipated income during the term of the plan, not merely an average of her pre-petition income.’ . . . The numbers resulting from the calculations on Form B22C represent a starting point for the Court’s inquiry. It represents a floor, not a ceiling. Such a construction gives the Court the ability to evaluate the debtor’s past and current financial status to determine a debtor’s disposable income when a debtor’s circumstances change from the six months preceding the filing of the petition.”); In re Dew, 344 B.R. 655, 660–61 (Bankr. N.D. Ala. 2006) (Debtors with CMI less than applicable median family income calculate projected disposable income using Schedules I and J, not Form B22C. “[D]isposable income in section 1325(b)(2) is not necessarily the same as projected disposable income in section 1325(b)(1)(B). See In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006). . . . [I]f a debtor’s income and expenses have been relatively constant and there is no reasonable expectation of substantial changes or fluctuations . . . then projected disposable income and disposable income will in virtually all, if not all, cases be the same. . . . [I]n determining whether a below median income debtor is offering all of his projected disposable income under a plan, the first step, and in most cases the last step, is to look at the debtor’s Schedules I and J. If the Schedules are accurately completed in good faith and plan payments are substantially the same as the debtor’s monthly net income shown on Schedule J, then the Court will conclude that the debtor is offering his projected disposable income under his plan as required by Section 1325(b)(1)(B).”); In re Grady, 343 B.R. 747, 750–53 (Bankr. N.D. Ga. 2006) (“The plain language of section 1325(b)(1)(B) provides that the term ‘projected disposable income[ ]’ is different from the term ‘disposable income’ . . . . [D]isposable income on the CMI form is not the ultimate measure of the Debtors’ financial condition and ability to fund plan payments. . . . If a debtor’s circumstances change from the six months preceding bankruptcy to the petition date, then the Court should evaluate the debtor’s past and current financial status to determine disposable income. . . . It is not logical for BAPCPA to limit a debtor to a plan based upon disposable income averaged over the six months preceding the petition date, when the debtor’s financial condition is dramatically different at the time of confirmation. . . . Debtors are authorized to pay the projected disposable income under Schedule J as opposed to the disposable income on the CMI form.”); In re Jass, 340 B.R. 411, 415–18 (Bankr. D. Utah 2006) (“Projected disposable income” and “disposable income” are not the same thing when Form B22C shows substantially more income than the debtors actually have at confirmation. “The Court believes that the language of § 1325(b)(1)(B) is clear and unambiguous—section 1325(b)(1)(B)’s requirement that a plan propose to pay ‘projected disposable income’ means that the number resulting from Form B22C is a starting point for the Court’s inquiry only. . . . [T]he word ‘projected’ is future-oriented. . . . The Court will presume that the number resulting from Form B22C is the debtor’s ‘projected disposable income’ unless the debtor can show that there has been a substantial change in circumstances such that the numbers contained in Form B22C are not commensurate with a fair projection of the debtor’s budget in the future. . . . If the Court finds adequate evidence to rebut the presumption in favor of Form B22C, the Court will allow the debtor to use a projected budget in the form of Schedules I and J to determine the debtor’s ‘projected disposable income.’”); In re Hardacre, 338 B.R. 718, 722–23 (Bankr. N.D. Tex. 2006) (“Projected disposable income” is based on future anticipated income, not on the six months of prepetition income that determines CMI. “[T]he phrase ‘projected disposable income’ is subject to conflicting interpretations. Section 1325(b)(2) defines ‘disposable income’ as ‘current monthly income’ less various categories of expenses. However, ‘current monthly income’ is defined as the debtor’s average income for the six months prior to her petition in bankruptcy. . . . [A] strict application of section 101(10A)’s definition of ‘current monthly income’ can have serious consequences . . . . The court believes that the term ‘projected disposable income’ must be based upon the debtor’s anticipated income during the term of the plan, not merely an average of her prepetition income. This conclusion is buttressed not only by the anomalous results that could occur by strictly adhering to section 101(10A)’s definition of ‘current monthly income,’ but because, taken as a whole, section 1325(b)(1) commands such a construction. . . . [U]se of the phrase ‘projected disposable income’ rather than ‘disposable income’ is instructive. . . . [S]ection 1325(b)(1)(B) refers to the projected disposable income ‘to be received in the applicable commitment period.’ If Congress had intended that projected disposable income for plan purposes be based solely on prepetition average income, this language would be superfluous. This suggests that Congress intended to refer to the income actually to be received by the debtor during the commitment period, rather than prepetition average income. . . . [S]ection 1325(b)(1) requires the court to determine whether a debtor is committing all of her projected disposable income ‘as of the effective date of the plan[,]’ . . . not her income prior to filing. . . . Section 101(10A) continues to apply inasmuch as it describes the sources of revenue that constitute income, as well as those that do not.”).

 

76  527 F.3d 990 (9th Cir.), amended and superseded by 541 F.3d 868 (9th Cir. 2008) (Pregerson, Siler, Bea).

 

77  See § 493.1 [ Applicable Commitment Period Calculation ] § 100.1  Applicable Commitment Period Calculation for discussion of applicable commitment period.

 

78  21 F.3d 355 (9th Cir. 1994) (Browning, Norris, O’Scannlain).

 

79  541 F.3d at 872.

 

80  541 F.3d at 873.

 

81  541 F.3d at 873.

 

82  541 F.3d at 873–74.

 

83  340 B.R. 411 (Bankr. D. Utah 2006) (Thurman).

 

84  338 B.R. 718 (Bankr. N.D. Tex. 2006) (Nelms).

 

85  541 F.3d at 874.

 

86  541 F.3d at 875.

 

87  541 F.3d at 875.

 

88  545 F.3d 652 (8th Cir. 2008) (Wollman, Beam, Riley).

 

89  545 F.3d at 656.

 

90  545 F.3d at 659–60.

 

91  545 F.3d at 661.

 

92  545 F.3d 1269 (10th Cir. Nov. 13, 2008) (Murphy, Brorby, Tymkovich), aff’d, 130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010).

 

93  545 F.3d at 1281.

 

94  See below in this section.

 

95  576 F.3d 258 (5th Cir. July 17, 2009) (King, Dennis, Elrod).

 

96  576 F.3d at 266 (emphasis added).

 

97  576 F.3d at 266.

 

98  576 F.3d at 267.

 

99  574 F.3d 349 (7th Cir. July 20, 2009) (Posner, Sykes, Van Bokkelen).

 

100  574 F.3d at 355.

 

101  574 F.3d at 356.

 

102  See 11 U.S.C. § 707(b)(2)(B), discussed in § 487.1 [ Additional Expenses or Adjustments to CMI ] § 98.1  Additional Expenses or Adjustments to CMI.

 

103  See § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

104  11 U.S.C. § 101(10A)(A)(ii), discussed in § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

105  575 F.3d 815 (8th Cir. Aug. 12, 2009) (Bye, Colloton, Gruender).

 

106  See § 491.1 [ Pension Loan Repayments ] § 99.4  Pension Loan Repayments.

 

107  579 F.3d 934 (8th Cir. Aug. 28, 2009) (Melloy, Benton, Magnuson).

 

108  See § 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation.

 

109  See § 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation.

 

110  Tate v. Bolen (In re Tate), 571 F.3d 423 (5th Cir. June 10, 2009) (Reavley, Davis, Benavides).

 

111  Ross-Tousey v. Neary (In re Ross-Tousey), 549 F.3d 1148 (11th Cir. Dec. 17, 2008) (Flaum, Rovner, Williams).

 

112  579 F.3d at 942.

 

113  579 F.3d at 942.

 

114  577 F.3d 1026 (9th Cir. Aug. 14, 2009) (Trott, McKeown, Ikuta).

 

115  This amount changes whenever the IRS wants to change it. See § 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation.

 

116  577 F.3d at 1030.

 

117  See below in this section, and see § 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation.

 

118  130 S. Ct. 2097, 176 L. Ed. 2d 721 (Apr. 19, 2010).

 

119  See § 475.1 [ National Standards ] § 95.2  National Standards.

 

120  See § 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation.

 

121  The current Local Standards: Transportation Ownership Costs allowance for one car is $496 per month. See § 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation.

 

122  577 F.3d at 1031–32.

 

123  418 B.R. 359 (B.A.P. 9th Cir. Oct. 5, 2009) (Montali, Jury, Hollowell).

 

124  418 B.R. 347 (B.A.P. 9th Cir. Oct. 5, 2009) (Montali, Jury, Hollowell).

 

125  See also § 128.1 [ Modification of Unsecured Home Mortgage: Before and After BAPCPA ] § 80.13  Modification of Unsecured Home Mortgage: Before and After BAPCPA.

 

126  In re Dement, No. 09-61582-13, 2010 WL 231750, at *4–*5 (Bankr. D. Mont. Jan. 14, 2010) (Kirscher).

 

127  395 B.R. 369 (B.A.P. 6th Cir. 2008) (Fulton, McIvor, Shea-Stonum).

 

128  395 B.R. 914 (B.A.P. 6th Cir. 2008) (Gregg, McIvor, Shea-Stonum).

 

129  See § 363.4 [ Three: Don’t Trust Judges ] § 3.4  Three: Don’t Trust Judges.

 

130  See, e.g., In re Ponce, 406 B.R. 490, 498 (Bankr. M.D. Pa. June 22, 2009) (Opel) (When changes occur within six months of petition that increase or decrease monthly disposable income by 20% or greater, “the presumption in favor of use of the Means Test to calculate projected disposable income would be rebutted.”); In re Timothy, No. 08-28332, 2009 WL 1349741, at *4 (Bankr. D. Utah May 12, 2009) (unpublished) (Mosier) (“The forward-looking approach ‘permits the amount of presumed projected disposable income to be rebutted upon a showing of special circumstances at the time of plan confirmation.’”); In re Juarez, No. 13-08-11174 SA, 2009 WL 2922802 (Bankr. D.N.M. Apr. 15, 2009) (Starzynski) (Debtors presented no evidence of any substantial change in circumstances to overcome projected disposable income presumption based on adjusted Form B22C calculation.); In re Royal, 397 B.R. 88, 98 (Bankr. N.D. Ill. 2008) (Hollis) (“[T]his court begins with the presumption that ‘projected disposable income’ is calculated by using ‘disposable income’ as defined in § 1325(b)(2). . . . The ‘rebuttable presumption’ approach allows courts to impose their discretion where unwanted outcomes could result from a simple mathematical application of Section 1325(b)(1)(B).”); In re Hilton, 395 B.R. 433 (Bankr. E.D. Wis. 2008) (McGarity) (When debtor’s income goes down during six months before petition, “least flawed” use of mechanical disposable income calculation is as a presumption that can be overcome by proof that income side is unreasonable.); In re French, 383 B.R. 402, 405 (Bankr. W.D. Ky. 2008) (Lloyd) (“Form B22C sets up a presumption that may be rebutted by the objecting party and the projected disposable income may be adjusted by the court accordingly.”); In re Strickland, No. 07-10913-DHW, 2008 WL 205577, at *3 (Bankr. M.D. Ala. Jan. 24, 2008) (unpublished) (Williams) (“[D]isposable income, as calculated under the means test, creates a presumption of the amount that must be paid under a chapter 13 plan. That presumption, however, may be rebutted by evidence that the debtor’s expectancy of the future will alter that result.”); In re Ries, 377 B.R. 777, 787 (Bankr. D.N.H. 2007) (“[A]n above median debtor’s Disposable Income, as calculated in accordance with § 1325(b)(2) & (3), is presumed to equal Projected Disposable Income for purposes of chapter 13 plan confirmation. . . . However, this presumption may be rebutted through an objection by the chapter 13 trustee or another party in interest, and is equally subject to alteration by a debtor who believes that a calculation of Disposable Income does not represent an accurate portrait of actual Disposable Income over the plan commitment period.”); In re Warren, No. 07-30721-DHW, 2007 WL 2683837, at *3 (Bankr. M.D. Ala. Sept.  6, 2007) (unpublished) (“[T]he Form [B]22C determination of disposable income creates a presumption that the debtor must pay that amount to unsecured creditors over the term of the plan. That presumption may, however, be rebutted with evidence that the debtor’s expectancy of the future alters that result.”); In re Briscoe, 374 B.R. 1 (Bankr. D.D.C. 2007) (B22C calculation of disposable income is presumption that can be overcome with evidence that future income is different than CMI or expenses are not as listed.); In re Purdy, 373 B.R. 142, 152 (Bankr. N.D. Fla. 2007) (“A Chapter 13 debtor’s ‘projected disposable income,’ as calculated by Form B22C, will be presumed accurate unless the debtor or trustee can show that the numbers contained in Form B22C do not reflect a fair projection of the debtor’s budget into the future because the debtor has experienced a substantial change in circumstances.”); In re Puetz, 370 B.R. 386, 388–89 (Bankr. D. Kan. 2007) (“The monthly disposable income reported on Form B22C is presumptively the debtor’s ‘projected disposable income’ under § 1325(b)(1)(B) unless the debtor can show special circumstances warranting an adjustment to either the debtor’s current monthly income or expenses.”); In re Mullen, 369 B.R. 25 (Bankr. D. Or. 2007) (Disposable income calculated consistent with Form B22C creates presumption of projected disposable income that is rebutted by evidence in Schedules I and J or elsewhere that actual disposable income is different.); In re Knippers, No. 06-34841-H3-13, 2007 WL 1239297 (Bankr. S.D. Tex. Apr. 26, 2007) (unpublished); In re Watson, 366 B.R. 523 (Bankr. D. Md. 2007); In re Slusher, 359 B.R. 290 (Bankr. D. Nev. 2007); In re Teixeira, 358 B.R. 484 (Bankr. D.N.H. 2006).

 

131  See, e.g., Pak v. eCast Settlement Corp. (In re Pak), 378 B.R. 257, 268 (B.A.P. 9th Cir. 2007) (Dunn, Carroll, Klein) (“‘[D]isposable income,’ as defined in § 1325(b)(2), is the starting point for determining ‘projected disposable income,’ subject to adjustment, based on evidence, to reflect reality going forward.”), overruled by Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008) (Pregerson, Siler, Bea); Spalding v. Truman, No. 4:08-CV-064-Y, 2008 WL 4566459, at *4 (N.D. Tex. Oct. 14, 2008) (unpublished) (Means) (“[T]he reading of ‘disposable income’ that most comports with the purposes and language of the code recognizes disposable income under § 1325(b)(2)(A) as the starting point in determining projected disposable income.”); In re Reeves, 405 B.R. 135, 142 (Bankr. D. Del. May 18, 2009) (Shannon) (“[D]isposable income should be used as a starting point for the calculation of projected disposable income on the terms espoused by the forward-looking view.”); In re Almonte, 397 B.R. 659, 667 (Bankr. E.D.N.Y. 2008) (Grossman) (“[T]he calculation of ‘disposable income’ under Section 1325(b) and Form B22C is but a starting point in reaching the debtor’s ‘projected disposable income.’”); In re Plumb, 373 B.R. 429, 436 (Bankr. W.D.N.C. 2007) (“[A]lthough debtors must use Form B22C as the starting point for determining projected disposable income, they must also take into consideration Schedules I and J when making that calculation.”); In re Devilliers, 358 B.R. 849 (Bankr. E.D. La. 2007); In re Grant, 364 B.R. 656 (Bankr. E.D. Tenn. 2007); In re Casey, 356 B.R. 519 (Bankr. E.D. Wash. 2006); In re Gress, 344 B.R. 919 (Bankr. W.D. Mo. 2006).

 

132  See, e.g., Spears v. Reding (In re Spears), 415 B.R. 855 (M.D. Ala. Sept. 24, 2009) (Thompson) (Disposable income is presumption or starting point in projected disposable income calculation that can be rebutted by evidence of present or reasonably certain future events that will affect income or expenses.); In re Baud, 415 B.R. 291 (E.D. Mich. Sept. 3, 2009) (Edmunds) (Disposable income is starting point and is presumptively the amount “projected” for § 1325(b) purposes absent rebutting evidence of “changed circumstances.”); In re Becquer, 407 B.R. 435, 439 (Bankr. S.D. Fla. Jan. 14, 2009) (Mark) (“[T]he Court adopts the forward looking approach. The disposable income calculation derived from Form B22C is the starting point . . . . However, the presumptive use of the disposable income calculation may be rebutted if . . . the historic six month prepetition average is not a realistic basis for projecting the actual income the debtor will receive during the term of the plan.”); In re Wilson, 397 B.R. 299 (Bankr. M.D.N.C. 2008) (Waldrep); In re May, 381 B.R. 498 (Bankr. W.D. Pa. 2008) (Deller); In re Arsenault, 370 B.R. 845 (Bankr. M.D. Fla. 2007) (Williamson).

 

133  See, e.g., In re Gordon, 360 B.R. 679 (Bankr. S.D. Cal. 2007).

 

134  See, e.g., In re Hall, No. 06-71296, 2007 WL 445517 (Bankr. C.D. Ill. Feb. 12, 2007) (unpublished).

 

135  In re Brown, No. 08-31279, 2009 WL 2873076, at *4 (Bankr. N.D.N.Y. Mar. 30, 2009) (Cangilos-Ruiz) (“This court has followed a majority of courts in holding that monthly disposable income on Form [B]22C is a ‘first look’ at a debtor’s projected disposable income for the purposes of satisfying Code section 1325(b)(1).”); In re Lisenko, No. 07-32774, 2008 WL 780703 (Bankr. N.D.N.Y. Mar. 24, 2008) (unpublished) (Cangilos-Ruiz).

 

136  See, e.g., In re Watson, 366 B.R. 523 (Bankr. D. Md. 2007) (“Substantial change in circumstances” is required to rebut presumption that Form B22C shows projected disposable income.).

 

137  See In re Tholl, No. 07-22677, 2008 WL 5539800, at *2 (Bankr. D. Kan. Dec. 31, 2008) (unpublished) (Somers) “[T]he Debtors’ income reported on amended Schedule I has increased between the dates of filing and confirmation. Under [Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008),] if the Debtors’ income had decreased between the date of filing and the date of confirmation, a plan using amended Schedule I income could be confirmed over the objection of a creditor, if a substantial change in circumstances were shown. This Court finds that the same rule applies when amended Schedule I income is greater than Form B22C income. . . . Debtors have not shown that the plan satisfied the disposable income requirement, as the increase in income reported on Amended Schedule I may have resulted from a substantial change in circumstances requiring an increase in projected disposable income for purposes of § 1325(b)(1)(B).”). See also In re Melvin, 411 B.R. 715 (Bankr. D. Kan. Dec. 22, 2008) (Somers) (Debtor has burden to prove substantial change in circumstances when either income or expenses deviate from Form B22C.); In re Arrigo, 399 B.R. 700 (Bankr. D. Colo. 2008) (Romero) (Loss of overtime and slight reduction in annual income are not “substantial” changes in circumstances for purposes of Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008).).

 

138  See also In re White, 409 B.R. 330, 336 (Bankr. D. Md. June 23, 2009) (Schneider) (Disposable income calculated on Form B22C is presumptively projected disposable income absent “a substantial change in circumstances such that the numbers contained in Form B22C are not commensurate with a fair projection of the debtor’s budget in the future.”); In re Juarez, No. 13-08-11174 SA, 2009 WL 2922802 (Bankr. D.N.M. Apr. 15, 2009) (Starzynski) (Debtors presented no evidence of any substantial change in circumstances to overcome projected disposable income presumption based on Official Form B22C with adjustments.); In re Liverman, 383 B.R. 604, 610 (Bankr. D.N.J. 2008) (Wizmur) (“[W]here substantial change in the debtors’ actual ability to fund a plan is shown, the formulaic calculation of disposable income may be modified to ‘project’ the reality of the debtors’ income and expenses going forward.”); In re Purdy, 373 B.R. 142, 152 (Bankr. N.D. Fla. 2007) (“A Chapter 13 debtor’s ‘projected disposable income,’ as calculated by Form B22C, will be presumed accurate unless . . . the debtor has experienced a substantial change in circumstances.”).

 

139  382 B.R. 153 (Bankr. D. Mass. 2008) (Feeney).

 

140  425 B.R. 317 (Bankr. S.D. Tex. Jan. 6, 2010) (Isgur).

 

141  See In re Kelly, 416 B.R. 232 (Bankr. E.D. Va. Mar. 2, 2009) (Mitchell).

 

142  No. 09-20980, 2010 WL 572702 (Bankr. D. Wyo. Feb. 17, 2010) (McNiff).

 

143  No. 07-32774, 2008 WL 780703 (Bankr. N.D.N.Y. Mar. 24, 2008) (unpublished) (Cangilos-Ruiz).

 

144  No. 07-30721-DHW, 2007 WL 2683837 (Bankr. M.D. Ala. Sept.  6, 2007) (unpublished).

 

145  See also In re Strickland, No. 07-10913-DHW, 2008 WL 205577, at *3 (Bankr. M.D. Ala. Jan. 24, 2008) (unpublished) (Williams) (“[D]isposable income, as calculated under the means test, creates a presumption of the amount that must be paid under a chapter 13 plan. That presumption, however, may be rebutted by evidence that the debtor’s expectancy of the future will alter that result.”).

 

146  In re Linn, No. 07-1593, 2008 WL 687448, at *4 (Bankr. N.D. W. Va. Mar. 10, 2008) (unpublished) (Flatley).

 

147  See, e.g., In re Upton, 363 B.R. 528 (Bankr. S.D. Ohio 2007); In re Edmondson, 363 B.R. 212 (Bankr. D.N.M. 2007); In re Carlton, 362 B.R. 402 (Bankr. C.D. Ill. 2007); In re Riggs, 359 B.R. 649 (Bankr. E.D. Ky. 2007); In re Grady, 343 B.R. 747 (Bankr. N.D. Ga. 2006).

 

148  See, e.g., In re Kibbe, 342 B.R. 411 (Bankr. D.N.H. 2006), aff’d, 361 B.R. 302 (B.A.P. 1st Cir. 2007); In re Upton, 363 B.R. 528 (Bankr. S.D. Ohio 2007); In re Fuller, 346 B.R. 472 (Bankr. S.D. Ill. 2006).

 

149  See, e.g., In re Pak, 357 B.R. 549, 552 (Bankr. N.D. Cal. 2006) (citing Jass, 340 B.R. 411 (Bankr. D. Utah 2006), but using CMI), aff’d, 378 B.R. 257 (B.A.P. 9th Cir. 2007) (Dunn, Carroll, Klein), overruled by Maney v. Kagenveama (In re Kagenveama), 527 F.3d 990 (9th Cir.), amended and superseded, 541 F.3d 868 (9th Cir. 2008) (Pregerson, Siler, Bea); In re Teixeira, 358 B.R. 484, 486–87, 487 n.6 (Bankr. D.N.H. 2006) (citing In re Kibbe, 342 B.R. 411 (Bankr. D.N.H. 2006), and In re Jass, 340 B.R. 411 (Bankr. D. Utah 2006), but embracing § 707(b)(2)(A) and (B)).

 

150  342 B.R. 411 (Bankr. D.N.H. 2006), aff’d, 361 B.R. 302 (B.A.P. 1st Cir. 2007).

 

151  363 B.R. 528 (Bankr. S.D. Ohio 2007).

 

152  See also In re Ward, 359 B.R. 741 (Bankr. W.D. Mo. 2007); In re Devilliers, 358 B.R. 849 (Bankr. E.D. La. 2007); In re Rotunda, 349 B.R. 324 (Bankr. N.D.N.Y. 2006); In re Siegel, No. 06-02291-dd, 2006 WL 3483987 (Bankr. D.S.C. Nov. 20, 2006) (unpublished); In re Schanuth, 342 B.R. 601 (Bankr. W.D. Mo. 2006); In re Beasley, 342 B.R. 280 (Bankr. C.D. Ill. 2006).

 

153  See § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

154  See 11 U.S.C. § 101(10A), discussed in § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

155  See, e.g., In re Niehoff, No. 08-21211, 2008 WL 4712820 (Bankr. E.D. Ky. Oct. 21, 2008) (unpublished) (Howard) (Disposable income is determined from Schedules I and J; when Form B22C shows negative disposable income but Schedules I and J reveal net monthly income of $639, debtors cannot confirm a 36-month plan even though it calls for monthly payments of all net income from Schedule J.); In re Louviere, 389 B.R. 502 (Bankr. E.D. Tex. 2008) (Parker) (When actual income goes down soon after petition, CMI is abandoned in projected disposable income calculation in favor of actual income and expenses under Schedules I and J.); In re Liverman, 383 B.R. 604 (Bankr. D.N.J. 2008) (Wizmur) (When debtor obtained employment one week before petition, court accepts debtors’ argument that Schedules I and J control projected disposable income—requiring debtors to pay $350 per month notwithstanding that Form B22C shows negative disposable income.); In re Lacny, No. 07-50184, 2007 WL 3216627, at *1 (Bankr. E.D. Ky. Oct. 25, 2007) (unpublished) (Scott) (Applying In re Riggs, 359 B.R. 649 (Bankr. E.D. Ky. 2007), projected disposable income is determined “only by reference to Schedules I and J,” and “[r]egardless of the label attached to the expenses on Schedule J, the expenses must be ‘reasonably necessary.’”); In re Rains, No. 07-40472 EDJ, 2007 WL 2900534 (Bankr. N.D. Cal. Oct. 2, 2007) (unpublished) (For a debtor with CMI greater than applicable median family income, projected disposable income is determined from Schedules I and J based on actual expenses that are reasonably necessary.).

 

156  See below in this section, and see § 35.10 [ Schedules I and J—Income and Expenditures ] § 36.16  Schedules I and J—Income and Expenditures. For example, Schedule J to Official Form 6 does not fully account for the payment of secured debt, pension loans or retirement deductions.

 

157  See, e.g., In re Mulally, No. 07-14699-BKC-PGH, 2007 WL 4556680 (Bankr. S.D. Fla. Dec. 19, 2007) (unpublished) (Hyman) (When income for debtors with CMI greater than applicable median family income increased after petition, income side of projected disposable income test is an adjusted form of Schedule I, but expenses are determined by the means test through § 1325(b)(3) and § 707(b)(2)(A).). Accord In re Odom, 406 B.R. 911, 918 (Bankr. D. Colo. June 23, 2009) (Campbell) (“Here, the Odoms must pay the net of their Schedule I Income minus the standardized deductions as required by section 707(b)(2)(A).”); In re Hughey, 380 B.R. 102 (Bankr. S.D. Fla. 2007) (Hyman) (Projected disposable income for debtor with CMI greater than applicable median family income is Schedule I income adjusted to exclude income items excluded by § 101(10A) less formula expenses deductible under § 707(b)(2)(A) and (B) from Form B22C.); In re Arsenault, 370 B.R. 845 (Bankr. M.D. Fla. 2007) (Citing In re Foster, No. 05-50448 HCD, 2006 WL 2621080 (Bankr. N.D. Ind. Sept. 11, 2006) (unpublished), income side of disposable income test is not confined to current monthly income as defined in § 101(10A) but extends to capture a bonus that debtor did not receive during the six-month period before the petition; in contrast, expense side of disposable income test for debtor with CMI greater than applicable median family income is statutorily confined to specific deductions allowed by § 707(b)(2)(A) and (B).).

 

158  See In re Rush, 387 B.R. 26, 32–33 (Bankr. W.D. Mo. 2008) (Dow) (Applying Coop v. Frederickson (In re Frederickson), 375 B.R. 829 (B.A.P. 8th Cir. 2007), debtor with CMI less than applicable median family income calculates disposable income using CMI as income component and Schedule J with adjustments as expense component. “[T]his Court believes that the approach to the concept and to statutory construction reflected in Frederickson suggests that the Bankruptcy Appellate Panel would adhere to the straight-forward statutory language in determining disposable income for below-median debtors. . . . [T]he Court holds that the appropriate method for determining projected disposable income for below-median debtors is to begin with their current monthly income as reflected on Form [B]22C and deduct the recurring living expenses on Schedule J. . . . [I]t is necessary to make certain additional adjustments . . . . First, Schedule J makes no provision for taxes. . . . Second, Chapter 13 debtors are directed not to reflect on Schedule J payments on secured debts which they intend to satisfy pursuant to the plan. Accordingly, it is also necessary then to subtract amounts to be paid to secured creditors.”).

 

159  See, e.g., In re Bentley, 387 B.R. 423, 425 (Bankr. W.D.N.Y. 2008) (Ninfo) (Disposable income shall be determined as follows: (1) when there is no increase in debtor’s income between petition and effective date of plan, current monthly income and monthly expenses shall be determined from Form B22C; (2) when there is an increase in debtor’s income after petition and trustee or creditor files an objection to confirmation, projected disposable income must be determined as of effective date of plan; (3) when National Standards change between petition and effective date of plan, monthly expenses shall be those in effect on date of petition; (4) when there is an increase in debtor’s income after petition and trustee or creditor files an objection to confirmation, court will “expect the debtor to ultimately modify their Plan to contribute an appropriate portion of the increased income”; (5) effective date of plan or when court is required to determine projected disposable income shall be the hearing on confirmation.).

 

160  See, e.g., In re Padilla, No. 07-07495 ESL, 2009 WL 2898837, at *3 (Bankr. D.P.R. June 23, 2009) (Lamoutte) (“Projected disposable income is a forward looking concept based on reality and not controlled by Form B22C. On the other hand, the expense component is controlled by Form B22C, in part by the National Local Standards, and in part by actual expenses.”); In re Ponce, 406 B.R. 490, 498 (Bankr. M.D. Pa. June 22, 2009) (Opel) (When income or expenses increase or decrease by 20% or more within six months of the petition, court will consider a nonexclusive list of factors to determine a debtor’s projected disposable income. “These factors are similar to some of the pre-BAPCPA ‘good faith’ concerns courts had in determining a debtor’s ‘projected disposable income.’”); In re Johnson, 400 B.R. 639, 649–51 (Bankr. N.D. Ill. Jan. 23, 2009) (Wedoff) (The definition of current monthly income in § 101(10A) must “harmonize” with the definition of disposable income § 1325(b). “The end result is a synthesis of §§ 101(10A) and 1325(b) that measures the ‘current monthly income’ inclusions and exclusions of § 101(10A) projected to be received by the debtor during the applicable commitment period defined by § 1325(b), reduced by the necessary expenditures incurred by the debtor during that period. . . . None of the forms and schedules that debtors are currently required to file provide the information needed to calculate disposable income received during the applicable commitment period. . . .  [D]ebtor must supplement Official Form [B]22C with a statement of any changes in the ‘current monthly income’ as reported in the form, and any changes in the expenses allowed, anticipated to take place during the applicable commitment period.”); In re Briscoe, 374 B.R. 1, 18–19 (Bankr. D.D.C. 2007) (“I agree with the [In re Jass, 340 B.R. 411 (Bankr. D. Utah 2006),] and [In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006),] line of cases that the phrase ‘projected disposable income’ in § 1325(b)(1) refers to income that it is reasonable to project that the debtor will receive. I do not mean to suggest, however, that a debtor (or other party-in-interest) can simply substitute the figures set forth in the debtor’s schedules for those found in Official Form [B]22C. . . . Schedule I is only marginally relevant in determining a debtor’s projected disposable income . . . . Schedule J is similarly unhelpful . . . . Instead, ‘courts must consider changes in circumstances, both increases and decreases to income and expenses, to a debtor’s financial situation, being always guided by the allowed methodology set forth in the means test.’ . . . Where an above-median income debtor is concerned, the debtor (or other party-in-interest) must demonstrate either a change or reasonably anticipated change in the debtor’s income using the methodology set forth in § 1325(b)(2) or a change in the circumstances giving rise to the applicable expense figures dictated by the Local and National Standards (or a change in actual expenses for those types of expenses falling under the Other Applicable Expenses category in the Financial Analysis Handbook) if he wishes to prove that his future income is any different from his current income. . . . Official Form [B]22C will, in other words, have precisely the same function as the debtor’s schedules had pre-BAPCPA: the evidentiary source for a presumption of disposable income that can be rebutted through the submission of extrinsic evidence.”); In re Meek, 370 B.R. 294, 303–08 (Bankr. D. Idaho 2007) (“[T]he income side of the projected disposable income equation, currently monthly income as defined by § 101(10A) and as evidenced by the debtor’s properly completed Form [B]22C[,] will control unless trustees, creditors or debtors challenge that historically calculated income average as unrealistically high or low given the debtor’s actual factual circumstances and present evidence to support that claim and substantiate the magnitude of the variation. . . . While § 1325(b)(3) requires that ‘[a]mounts reasonably necessary to be expended under paragraph (2)’ be determined for above median income debtors, in accordance with § 707(b)(2)(A) and (B), this proviso does not alter either the need for ‘projection’ found in § 1325(b)(1) or the limitation of expenses in § 1325(b)(2) to only those amounts reasonably necessary to be expended. . . . [T]he expense side of disposable income is also subject to evaluation in light of the debtor’s postpetition plan proposals, even though that inquiry is circumscribed by the overlay of § 707(b)(2). . . . [I]n regard to the expense side of determining projected disposable income, . . . a below median income debtor’s expenses are initially asserted in schedule J, while an above median income debtor’s expenses must be claimed in accord with § 707(b)(2) standards as incorporated by § 1325(b)(3). Though expenses for above median income debtors are to be ‘determined in accordance with’ § 707(b)(2), other Code language (i.e., ‘projected,’ ‘reasonably necessary’ and ‘to be expended’) allows parties to contest and the Court to consider the provisions of the debtor’s proposed plan as well as events that will definitely occur during the pendency of the plan.”).

 

161  See, e.g., Coop v. Lasowski (In re Lasowski), 384 B.R. 205 (B.A.P. 8th Cir. 2008) (Schermer, Federman, McDonald) (The deduction for a pension loan is calculated based on total amount necessary to repay loan, not actual monthly payment required by pension loan contract; for confirmation purposes, debtor deducts only total amount of payments and when that amount is repaid, funds available for distribution to unsecured creditors increase.), aff’d sub. nom. McCarty v. Lasowski (In re Lasowski), 575 F.3d 815 (8th Cir. Aug. 12, 2009) (Bye, Colloton, Gruender); In re Nowlin, 366 B.R. 670, 674–75 (Bankr. S.D. Tex. 2007) (Disposable income includes amounts that become available when pension loan repayment will be completed in 24 months and the plan must last 60 months. “The phrase ‘projected,’ as it modifies ‘disposable income’ in § 1325(b), must be given greater meaning than merely instructing the Debtor to multiply her disposable income as of the petition date by the length of the Plan. Instead, this Court holds that ‘projected disposable income,’ as it is used in § 1325(b), requires the Debtor to account for any events which will definitely occur during the term of the Plan that would alter either the income or expense side of the disposable income calculation. . . . [A]fter the Debtor has repaid her 401(k) loan obligation in month 24, the funds that were previously used to make those payments must be included as part of the Debtor’s disposable income because . . . the satisfaction of the loan obligation is set to occur at a definite time during the term of the Plan . . . . [T]he Debtor is able to ‘project’ that at a specific point in time during the Plan, an event will assuredly occur that will significantly alter the amount of her disposable income, and thus under § 1325(b) her Plan must account for this change in circumstances.”), aff’d, Nos. H-07-2446, 06-34785, 2007 WL 4623043, at *1 (S.D. Tex. Dec. 28, 2007) (unpublished) (Hughes) (“The end of an allowed deduction for the debtor’s subsistence does not free that money for discretionary application to her current lifestyle. It goes to repay her past consumption on credit. Debtors must use projected disposable income that includes expected changes to the allowed expenses during the term of the plan.”), aff’d, 576 F.3d 258 (5th Cir. July 17, 2009) (King, Dennis, Elrod); In re Zinser, Nos. 07-41304-RFN-13, 07-41863-DML-13, 2007 WL 3479604, at *2 (Bankr. N.D. Tex. Nov. 15, 2007) (unpublished) (Nelms) (To project disposable income when child support and pension loans will be paid off before completion of other payments, plan must account for future changes in circumstances that are certain to occur. Projected disposable income was calculated based on monthly child support deductions for 60 months even though child support payments would be completed in 26 months after petition. Projected disposable income in a companion case was calculated using a monthly deduction for a 401(k) loan repayment over 60 months although loan would be repaid in approximately one year. “If the court confirms the Plans as proposed, the Plans will have to be modified at the time the child support payments cease . . . and upon full repayment of the 401[(k)] loan . . . . If, on the other hand, the court sustains the Trustee’s objections, the result will be that the Plans will be drafted to take into account the anticipated changes in the Debtors’ circumstances. . . . Given that the ultimate substantive result will be the same . . . the Trustee’s objections will be sustained to the extent that the Plans fail to take account of events—here the changes due to child support payments and 401(k) loan repayments—that are assuredly going to occur.”), aff’d sub nom. Spalding v. Truman, No. 4:08-CV-064-Y, 2008 WL 4566459 (N.D. Tex. Oct. 14, 2008) (unpublished) (Means).

 

162  See In re Brunner, No. 06-12237, 2007 WL 4373119, at *3 (Bankr. N.D.N.Y. Dec. 7, 2007) (unpublished) (Littlefield) (Disposable income and projected disposable income calculations are based on historical numbers, and the amount a debtor must pay into the plan does not “step up” when car loans, car leases or pension loans are repaid; repayment of debts during 60-month commitment period is mathematically reflected in disposable income calculation, and confirmation is not dependent on any change in plan payments based on events after confirmation. “[F]inancial events occurring during the life of the case have no relevance to the plan payment necessary for confirmation, and future events simply do not mesh with the backward glance required by § 1325(b)(1)(B) at confirmation. . . . [T]he fact that the monies being used to retire the Debtors’ car loan, automobile lease, and retirement loans will be freed up during the course of the plan is not an impediment to confirmation for purposes of § 1325(b)(1)(B).”); In re McLain, 378 B.R. 39, 43 (Bankr. N.D.N.Y. 2007) (Plan need not step up payments to unsecured creditors to reflect that car loans will be paid off during life of plan; projected disposable income is based on historical numbers not affected by financial events during Chapter 13 case. “[D]isposable income and projected disposable income are interrelated and are based on historical numbers as mandated by § 1325(b). . . . [F]inancial events occurring over the course of a debtor’s plan would have no relevance to a debtor’s plan payment necessary for confirmation purposes. . . . Future events simply do not mesh with the backward glance required by § 1325(b)(1)(B) at confirmation. . . . [T]he apparent liberation of debtor monies by the proposed retirement of automobile loans during the life of a plan is not an impediment to confirmation for purposes of § 1325(b)(1)(B).”); In re Berger, 376 B.R. 42, 47–48 (Bankr. M.D. Ga. 2007) (For debtors with CMI greater than applicable median family income, projected disposable income means disposable income projected over applicable commitment period pursuant to the formula in § 1325(b); that a 401(k) loan will be paid off during the plan does not change calculation on Form B22C. “[T]he majority’s interpretation renders not just one word superfluous, but the entirety of subsection 1325(b)(2) . . . . Section 1129(a)(15) provides that when an unsecured creditor objects to an individual debtor’s Chapter 11 plan, the debtor must pay all unsecured claims in full or make distributions valued at ‘not less than the projected disposable income of the debtor (as defined in section 1325(b)(2)) . . . . In this provision Congress expressly states the definition of ‘projected disposable income’ is controlled by the definition of ‘disposable income.’ . . . Prior to the amendments, courts extrapolated projected disposable income from information in Schedules I and J. Under the amendments, Congress has directed the Court to extrapolate from a different source—disposable income as calculated in accordance with the means test and reported on Form B22C. . . . [T]he formula ‘represents, by the definition’s plain language, the policy judgment of Congress . . .’ . . . . While the results of applying the formula may be troubling in some cases, they are not absurd and do not justify deviating from the plain language of the statute. . . . [T]he plain language of § 1325(b) requires an above-median-income debtor’s projected disposable income to be determined in accordance with current monthly income minus expenses set forth in the means test in § 707(b). . . . This applies regardless of any known changes in Debtors’ expenses, such as satisfaction of their two 401(k) loans.”).

 

163  See § 485.1 [ Average Monthly Payments on Account of Secured Debts ] § 96.1  Average Monthly Payments on Account of Secured Debts.

 

164  See below in this section, and see § 485.1 [ Average Monthly Payments on Account of Secured Debts ] § 96.1  Average Monthly Payments on Account of Secured Debts.

 

165  See § 485.1 [ Average Monthly Payments on Account of Secured Debts ] § 96.1  Average Monthly Payments on Account of Secured Debts. See, e.g., In re Smith, 401 B.R. 469, 474 (Bankr. W.D. Wash. Nov. 14, 2008) (Snyder) (Applying Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), debtor with CMI greater than applicable median family income is entitled to deduct secured debt payments contractually due at the petition notwithstanding that plan surrenders two houses and a car. “After Kagenveama, it would . . . be inconsistent to apply a backward-looking approach to income, yet adopt a forward-looking approach in determining expenses. . . . Congress has made the conscious choice to remove judicial discretion from the calculation of disposable income. . . . [U]nder § 1325(b)(3), for an above median debtor, amounts reasonably necessary to be expended are determined solely by reference to § 707(b)(2).”), rev’d, 418 B.R. 359 (B.A.P. 9th Cir. Oct. 5, 2009) (Montali, Jury, Hollowell).

 

166  See § 485.1 [ Average Monthly Payments on Account of Secured Debts ] § 96.1  Average Monthly Payments on Account of Secured Debts. See, e.g., In re Rahman, No. 808-73335-reg, 2009 WL 205013, at *7 (Bankr. E.D.N.Y. Jan. 23, 2009) (Grossman) (Adopting “forward-looking” approach to both income and expense sides of projected disposable income test, debtor with CMI greater than applicable median family income cannot deduct secured debt payments with respect to house and car that plan proposes to surrender. “[T]he Court finds that the expense side of the disposable income calculation is forward-looking. . . . [E]xpense calculations should not be a static evaluation of a debtor’s obligations as they existed on the petition date. . . . [T]he Court must look at a debtor’s stated intentions of record as they exist on the date of confirmation to determine what expenses are ‘reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor’ . . . . [T]he Chapter 13 plan states the Debtor’s intention to surrender[.]”); In re Miller, No. 07-22927, 2008 WL 5539804 (Bankr. D. Kan. Dec. 31, 2008) (unpublished) (Somers) (“Forward looking” approach in Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), applies to both income and expense components of projected disposable income test; surrender of property through plan is substantial change in circumstances that precludes secured debt deduction with respect to surrendered property.); In re Kenney, 399 B.R. 516 (Bankr. N.D. Okla. 2008) (Michael) (Citing Hamilton v. Lanning (In re Lanning), 545 F.3d 1269 (10th Cir. 2008), when debtors modify plan before confirmation to surrender home and reduce plan payment, higher amounts paid to trustee consistent with original plan are disposable income that must be paid to unsecured creditors notwithstanding that Form B22C reveals no disposable income.).

 

167  21 F.3d 355 (9th Cir. 1994). See § 164.1 [ Projected (Disposable) Income ] § 91.2  Projected (Disposable) Income.

 

168  See discussion of modification after confirmation beginning at § 126.1  Standing, Timing and Procedure.

 

169  See § 164.1 [ Projected (Disposable) Income ] § 91.2  Projected (Disposable) Income. But see Rowley v. Yarnall, 22 F.3d 190 (8th Cir. 1994).

 

170  See § 487.1 [ Additional Expenses or Adjustments to CMI ] § 98.1  Additional Expenses or Adjustments to CMI.

 

171  Randolph J. Haines, Chapter 11 May Resolve Some Chapter 13 Issues, 7 Norton Bankr. L. Adviser 1 (2007).

 

172  See In re Johnson, 400 B.R. 639, 650 (Bankr. N.D. Ill. Jan. 23, 2009) (Wedoff) (“None of the forms and schedules that debtors are currently required to file provide the information needed to calculate disposable income received during the applicable commitment period.”).

 

173  See § 36.19  Form 122C-1: Statement of Current Monthly Income§ 36.20  Form 122C-1: Commitment Period Calculation and § 36.21  Form 122C-2: Disposable Income Calculation.

 

174  See § 35.10 [ Schedules I and J—Income and Expenditures ] § 36.16  Schedules I and J—Income and Expenditures.

 

175  130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010).

 

176  Thomas F. Waldron & Neil M. Berman, Principled Principles of Statutory Interpretation: A Judicial Perspective After Two Years of BAPCPA, 81 Am. Bankr. L.J. 195 (2007).

 

177  130 S. Ct. at 2469.

 

178  130 S. Ct. at 2469.

 

179  130 S. Ct. at 2473–78.

 

180  130 S. Ct. at 2471.

 

181  130 S. Ct. at 2475.

 

182  130 S. Ct. at 2478.

 

183  See, e.g., American Express Bank, FSB v. Smith (In re Smith), 418 B.R. 359 (B.A.P. 9th Cir. Oct. 5, 2009) (Montali, Jury, Hollowell); Yarnall v. Martinez (In re Martinez), 418 B.R. 347 (B.A.P. 9th Cir. Oct. 5, 2009) (Montali, Jury, Hollowell); Thomas v. Hildebrand (In re Thomas), 395 B.R. 914 (B.A.P. 6th Cir. Oct. 31, 2008) (Gregg, McIvor, Shea-Stonum).

 

184  See Executive Office for U.S. Trustees, U.S. Dep’t of Justice, Report to Congress: Impact of the Utilization of Internal Revenue Service Standards for Determining Expenses on Debtors and the court (July 2007), available at www.justice.gov/ust/eo/public_affairs/reports_studies/docs/Rpt_to_Congress_on_IRS_Standards.pdf.

 

185  577 F.3d 1026 (9th Cir. Aug. 14, 2009) (Trott, McKeown, Ikuta), cert. granted, 130 S. Ct. 2097, 176 L. Ed. 2d 721 (Apr. 19, 2010).

 

186  See § 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation.

 

187  See § 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation.

 

188  See § 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation.

 

189  See discussion beginning at § 94.1  Big Picture: Too Many Issues.

 

190  No. 09-5499, 2010 WL 2852251 (6th Cir. July 22, 2010) (Suhrheinrich, McKeague, Griffin).

 

191  2010 WL 2852251, at *5.

 

192  No. 10-22994, 2010 WL 2680940 (Bankr. D. Utah June 29, 2010) (unpublished) (Thurman).

 

193  See § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

194  2010 WL 2680904, at *3.

 

195  Cranmer, 2010 WL 2680940, at *3 (footnote omitted.).

 

196  2010 WL 2680940, at *5.

 

197  See, e.g., In re White, 409 B.R. 330 (Bankr. D. Md. June 23, 2009) (Schneider) (A difference between Form B22C and Schedule I is not a substantial change in circumstances because there will almost always be a difference between the numbers on the two forms.).

 

198  See §§ 9.5 [ Social Security ] § 12.5  Social Security and 252.1 [ Special Deduction Order Problems: Entitlements, Pensions and Government Employers ] § 125.7  Special Deduction Order Problems: Entitlements, Pensions and Government Employers. See, e.g., Hildebrand v. Social Sec. Admin. (In re Buren), 725 F.2d 1080 (6th Cir. Jan. 23, 1984) (Keith, Martin Aldrich).

 

199  See §§ 9.5 [ Social Security ] § 12.5  Social Security and 252.1 [ Special Deduction Order Problems: Entitlements, Pensions and Government Employers ] § 125.7  Special Deduction Order Problems: Entitlements, Pensions and Government Employers. See, e.g., Carpenter v. Ries (In re Carpenter), No. 09-2897, 2010 WL 2977388 (8th Cir. July 30, 2010) (Riley, Gibson, Murphy).

 

200  See § 164.1 [ Projected (Disposable) Income ] § 91.2  Projected (Disposable) Income. See, e.g., In re Schnabel, 153 B.R. 809 (Bankr. N.D. Ill. Apr. 23, 1993) (Katz).

 

201  See § 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline.

 

202  No. 09-33187, 2010 WL 2643542 (Bankr. M.D. Ala. June 29, 2010) (Williams).

 

203  See § 485.1 [ Average Monthly Payments on Account of Secured Debts ] § 96.1  Average Monthly Payments on Account of Secured Debts.

 

204  2010 WL 2643542, at *3.

 

205  In contrast, see 11 U.S.C. § 707(b)(2)(A)(iii)(II), discussed in § 485.1 [ Average Monthly Payments on Account of Secured Debts ] § 96.1  Average Monthly Payments on Account of Secured Debts. See also § 471.1 [ Big Picture: Too Many Issues ] § 94.1  Big Picture: Too Many Issues.

 

206  See § 363.8 [ Seven: Unsecured Creditors Don’t Count ] § 3.8  Seven: Unsecured Creditors Don’t Count.