In Re Mattson, 468 B.R. 361

Debtors, above-median, sought to modify Chapter 13 plan under §1329 due to post-confirmation income increase.
They proposed higher payments and shortening the plan from 60 to 36 months.
Trustee objected to shortened term, arguing plan should last 60 months for above-median debtors.
Bankruptcy court allowed increased payments but denied shortening term, applying a correlation/changed-circumstances test beyond Sunahara.
Board affirmed the decision, concluding the modification was not made in good faith under §1325(a)(3) and §1329(b)(1).
Court noted §1329(b)(1) does not import §1325(b) disposable-income/applicable-commitment-period requirements.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a debtor may shorten the plan term under §1329(a)(2) given increased income	Mattson argues §1329 allows shorter term with good faith.	Howe argues term cannot shorten; must satisfy 60-month commitment for above-median debtors.	No; modification denied for lack of good faith and improper correlation.
Whether substantial change in circumstances is required for §1329 modifications	Debtors claim substantial/unanticipated change occurred.	Trustee asserts not required to modify term.	Court treats change-in-circumstances as relevant but not controlling; still deny good faith.
Whether §1329(b)(1) incorporates the disposable-income test and the applicable commitment period from §1325(b)	Modification not bound by §1325(b) means-test.	§1329(b)(1) should not import §1325(b) limits.	Plain language does not incorporate §1325(b); modification may proceed without 1325(b) framework.
Whether the modification was proposed in good faith under §1325(a)(3)	Debtors acted to adjust plan to new income.	Modification lacks correlating purpose and equity to creditors.	Modification not in good faith; others factors do not support shortening term.

In re Sunahara, 326 B.R. 768 (9th Cir. BAP 2005) (good faith not tied to disposable income test; totality of circumstances)
In re Goeb, 675 F.2d 1386 (9th Cir. 1982) (generalized good faith factors for plan modification)
In re Ewers, 366 B.R. 139 (Bankr. D. Nev. 2007) (means to modify with consideration of commitment period; not rigid rule)
In re Mattson, 456 B.R. 75 (Bankr. WD Wash. 2011) (panel’s own facts; analysis of correlation and good faith in modification)
In re Leavitt, 171 F.3d 1219 (9th Cir. 1999) (totality of circumstances approach to good faith)
In re Powers, 202 B.R. 618 (9th Cir. BAP 1996) (good faith analysis under §1325(a)(3) in modifications)