Baud v. Carroll
634 F.3d 327
| 5th Cir. | 2011Background
- BAPCPA redefined disposable income and altered applicable commitment periods in §1325(b)(1) and (4).
- Krispen Carroll, as Chapter 13 Trustee, challenged Baud and Baud’s plan for not fully paying unsecured creditors.
- Baud filings show above-median income, initial plan of 36 months paying unsecureds, later amended to 60 months.
- Form 22C indicated negative disposable income, yet Schedule I listed substantial current income including Social Security.
- Social Security benefits are excluded from current monthly income under §101(10A) and thus from disposable income under BAPCPA.
- Mortgage payments for above-median debtors are analyzed under §707(b)(2)(A)(iii) to determine deductibility.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1325(b) imposes a temporal minimum plan length for positive PDI when not paying in full | Appellant argues for a duration equal to the applicable commitment period. | Appellees contend it is a monetary requirement, not strictly a time-based one. | Temporal minimum plan length applies for confirmation. |
| How the amended definition of disposable income affects projected disposable income calculation | Appellant asserts broader inclusion of income components and narrower deductions. | Baud argues for exclusions and standardized deductions under means test rules. | Projected disposable income must follow the §1325(b)(2) and (3) framework with exclusions and above-median deductions. |
| Whether debtors with zero or negative PDI have an exception to the temporal requirement | Appellee argues no exception exists; temporal requirement should apply only to positive PDI. | Appellant argues there should be an exception for zero/negative PDI. | No exception; applicable commitment period applies to zero/negative PDI. |
| Whether Social Security benefits can be included in calculating projected disposable income | Appellant urges inclusion due to past practice and Lanning-based flexibility. | Baud contends benefits are excluded by §101(10A) and cannot be included. | Social Security benefits are excluded from projected disposable income. |
| Whether above-median debtors may deduct full ongoing mortgage payments under §707(b)(2)(A)(iii) | Appellant contends no such deduction should be allowed beyond actual needs. | Baud allows deduction per §707(b)(2)(A)(iii) to retain collateral, aligning with post-BAPCPA practice. | Above-median debtors may deduct mortgage payments under §707(b)(2)(A)(iii). |
Key Cases Cited
- Hamilton v. Lanning, 130 S. Ct. 2464 (Supreme Court 2010) (forward-looking approach to projected disposable income)
- Ransom v. FIA Card Servs., NA, 131 S. Ct. 716 (Supreme Court 2011) (means test purpose to maximize creditor repayment)
- Tennyson, 611 F.3d 873 (11th Cir. 2010) (applies applicable commitment period as temporal requirement for zero or positive PDI)
- Kagenveama, 541 F.3d 868 (9th Cir. 2008) (debtor with zero/negative PDI; dispute about applicable commitment period)
- Musselman v. eCast Settlement Corp., 394 B.R. 801 (E.D.N.C. 2008) (above-median deductions under §707(b)(2) for secured debt)