In re Damron, 598 B.R. 350

Background

Debtor filed a Chapter 13 plan in July 2017 proposing $617 monthly payments and a 100% dividend to unsecured creditors; confirmation followed with payments later increased to $924 with 5.5% interest on unsecured claims.
An error in the original schedules overstated combined monthly income, creating apparent positive net income when the correct figures showed negative net income without the fiancée's SSI.
Debtor voluntarily included his fiancée’s Social Security Income (SSI) at confirmation and has consistently paid $924 monthly for over a year.
In August 2018 Debtor filed a Modification After Confirmation seeking to reduce payments to $600 and cut the unsecured dividend to 0%, omitting his fiancée’s SSI from amended Schedule I and adding her as a dependent on Schedule J.
Trustee objected, arguing (1) a post-confirmation modification requires a substantial, unanticipated change in circumstances and none exists, and (2) the proposed modification lacks good faith.
The court denied the modification, concluding (a) in this district a change in circumstances is required to overcome res judicata and none was shown, and (b) even if a change were not required, the circumstances do not justify modification (so the court did not reach the good-faith inquiry).

Issues

Issue	Debtor's Argument	Trustee's Argument	Held
Whether an unanticipated change in circumstances is required to modify a confirmed Chapter 13 plan under § 1329	§1329's plain text permits modification without requiring a change in circumstances; court precedents (e.g., In re Green) support excluding SSI post-confirmation	In this district controlling precedent requires a substantial, unanticipated change to avoid the res judicata effect of confirmation	Court: A change in circumstances is required in this district; Debtor did not show such a change, so modification denied
Whether a change in law (citing In re Green) permits modification to exclude SSI already voluntarily contributed at confirmation	Green shows SSI is excluded from CMI and omission alone is not bad faith; thus Debtor can now omit SSI and reduce payments	The Green decision is not a fundamental change that overcomes res judicata; Debtor voluntarily contributed the SSI at confirmation and cannot now retract that contribution	Court: Green is not an intervening change sufficient to overcome res judicata here; Debtor cannot rely on it to omit previously contributed SSI
Whether the proposed modification is permissible under §1329 and §1325(a)(6) feasibility requirements	Modification reduces payments and dividend based on amended schedules showing lower CMI/exclusions	Trustee contends feasibility and good faith problems; plan confirmation was final and modified proposal undermines prior determinations	Court: Because modification is barred for lack of changed circumstances, court did not reach good-faith feasibility analysis and denied modification

Key Cases Cited

In re Murphy, 474 F.3d 143 (4th Cir. 2007) (holds substantial, unanticipated change in circumstances required for §1329 modification in that circuit)
In re Meza, 467 F.3d 874 (5th Cir. 2006) (interprets §1329 as permitting post-confirmation modification without strict changed-circumstances prerequisite)
Barbosa v. Solomon, 235 F.3d 31 (1st Cir. 2000) (construes §1329 as allowing confirmed-plan modification under statutory text)
In re Witkowski, 16 F.3d 739 (7th Cir. 1994) (supports view that §1329 allows modification without requiring changed circumstances)
In re Hoggle, 12 F.3d 1008 (11th Cir. 1994) (views §1329 as intended to permit modification for changed circumstances unforeseen at confirmation)
Precision Air Parts, Inc. v. Avco Corp., 736 F.2d 1499 (11th Cir. 1984) (general rule that changes in law ordinarily do not defeat res judicata)
Ragos v. U.S. Trustee, 700 F.3d 220 (5th Cir. 2012) (SSI excluded from current monthly income under §101(10A))
Cranmer v. U.S. Trustee, 697 F.3d 1314 (10th Cir. 2012) (SSI not part of CMI for means-test calculations)
Baud v. Carroll, 634 F.3d 327 (6th Cir. 2011) (interprets exclusion of certain benefits from CMI)