Anderson v. Cranmer (In Re Cranmer)
697 F.3d 1314
10th Cir.2012Background
- Cranmer filed a Chapter 13 petition and proposed a plan excluding SSI from projected disposable income.
- On Form 22C, SSI was not included in current monthly income; Schedule I included SSI and Schedule J treated part of SSI as exempt funds.
- The Trustee objected to confirmation, arguing SSI should be included in projected disposable income.
- The bankruptcy court denied confirmation, holding SSI must be included in projected disposable income and that exclusion showed bad faith.
- The district court reversed, ruling SSI need not be included in projected disposable income; Cranmer amended the plan to include SSI and the plan was confirmed.
- Cranmer’s plan payments ultimately failed, leading to dismissal for noncompliance; on appeal, the district court’s ruling was upheld on the SSI issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SSI must be included in projected disposable income | Cranmer’s SSI is excluded by the Code from disposable income; therefore not included. | Trustee argues SSI should be included in projected disposable income despite exclusion from disposable income. | SSI need not be included in projected disposable income. |
| Whether excluding SSI from projected disposable income shows lack of good faith | Excluding SSI aligns with the statute and does not demonstrate bad faith. | Excluding SSI could reflect improper calculation affecting good faith. | Exclusion of SSI, as allowed by the Code, does not prove bad faith. |
| What governs the good faith analysis in light of SSI treatment | Good faith should be assessed considering the overall plan and statutory allowances. | Good faith is a separate inquiry, potentially affected by income calculations. | Good faith determined by totality of circumstances; SSI exclusion does not defeat good faith. |
Key Cases Cited
- Lanning, Hamilton v. Lanning, 130 S. Ct. 2464 (2010) (establishes projected disposable income framework and handling unusual income changes)
- In re Welsh, 465 B.R. 843 (9th Cir. 2012) ( SSI exclusion does not by itself show lack of good faith)
- In re Thompson, 439 B.R. 140 (8th Cir. 2010) (SSI retention not presumptively bad faith)
- Barfknecht v. Carroll (In re Barfknecht), 378 B.R. 154 (Bankr. W.D. Tex. 2007) (rejects treating ‘projected’ to override disposable income definitions)
- Carpenter v. Ries (In re Carpenter), 614 F.3d 930 (8th Cir. 2010) (statutory protection of SSI from bankruptcy estate)