485 B.R. 77
Bankr. M.D. Penn.2013Background
- Debtors Eckert filed a voluntary Chapter 13 petition on 11/29/2010; Amended Plan confirmed 4/28/2011.
- Trustee filed a Motion to Require Modification of Plan on 4/19/2012 to increase payments from $500 to $2,500 starting 5/1/2012.
- Debtors object, asserting finality of confirmation and lack of basis for modification.
- Post-confirmation, Eckert’s earnings rose approximately 36% due to a new job, while spouse’s earnings remained mostly unchanged.
- Court analyzes §1329 against §1327/§1325, feasibility, and finality to determine if modification is permitted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1329 modification can alter a confirmed plan after confirmation when a non-debtor seeks modification. | Trustee argues §1329 allows post-confirmation Plan modification. | Eckerts argue finality of confirmation bars modification. | Modification denied; finality and thresholds not met. |
| Whether post-confirmation, a substantial and unanticipated income increase justifies modification. | Trustee relies on post-confirmation income rise as grounds for modification. | Debtors contend no substantial, unanticipated change warranting modification. | No substantial/unanticipated change proven; modification not warranted. |
| Whether the modification complies with feasibility and §1325(a) requirements. | Trustee must show feasibility and §1325(a) compliance. | Debtors argue feasibility is unlikely given employment history. | Feasibility not shown; plan modification not feasible. |
| How §1327 finality interacts with §1329 modification authority. | §1329 provides flexibility, but finality should be respected. | Confirmation finality remains strong; modification requires substantial change. | Reconciliation favors finality; no §1327–§1329 tension warrants modification. |
Key Cases Cited
- Szostek v. Szostek, 886 F.2d 1405 (3d Cir. 1989) (binding effect of a confirmed plan; res judicata under §1327)
- United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010) (Supreme Court on confirming plan finality and attacks on confirmations)
- In re Mellors, 372 B.R. 763 (Bankr.W.D. Pa. 2007) (threshold showing of substantial/unanticipated change in §1329 context)
- In re Caruso, 433 B.R. 135 (Bankr.M.D. Pa. 2010) (reconciling 1327 and 1329; finality with modification)
- In re Lopatka, 400 B.R. 439 (Bankr.M.D. Pa. 2009) (modification standards compared to confirmation)