In Re Mattson
456 B.R. 75
Bankr. W.D. Wash.2011Background
- Debtors Robbyn and Renee Mattson filed Chapter 13 on December 21, 2010 in the Western District of Washington.
- They listed assets including a house, four vehicles, retirement funds, and over $83,000 in retirement, most exempted; unsecured debt ~$163,367.
- Original Plan (confirmed March 2, 2011) proposed $150 monthly for 60 months to unsecured creditors and attorney fees; secured debts paid outside plan.
- Income: Debtors originally showed combined monthly income about $4,267; net monthly income about $150 after expenses.
- Amended May 2011: Schedule I shows higher income (total ~$5,936) and Amended Schedule J shows higher expenses, netting a modest rise in disposable income.
- June 15, 2011: Debtors filed Amended Plan seeking to raise payments to $900/mo then $1,000/mo, shortening term to 36 months.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1329 modification may shorten the plan term. | Mattson: increase in income justifies shorter term under § 1329. | Trustee: fixed commitment period at confirmation governs; cannot shorten without paying in full or other allowances. | Modification to shorten term denied; commitment period fixed at confirmation. |
| Whether a change of circumstances is required for § 1329 modification sorrward correlation. | Mattson argues change in circumstances justifies modification. | Trustee contends no clear correlation required beyond good faith. | Court requires substantial change in circumstances correlated to plan modification. |
| Whether increasing payments while reducing term is permissible under § 1329(a)(2). | Debtors may increase payments due to higher income. | Trustee argues cannot shorten while increasing payments without correlating to changed circumstances. | Plan may increase payments; however, shortening term is not approved. |
| Impact of applicable commitment period under § 1325(b) on § 1329 modifications. | § 1325(b) not applicable to modifications. | Commitment period fixed at confirmation; cannot extend beyond five years. | Applicable commitment period remains fixed; modification may not extend beyond five years. |
Key Cases Cited
- Sunahara v. Burchard, 326 B.R. 768 (9th Cir. BAP 2005) (projected disposable income test not incorporated into § 1329)
- Fridley v. Forsythe (In re Fridley), 380 B.R. 538 (9th Cir. BAP 2007) (extends Sunahara to post-BAPCPA cases)
- In re Kagenveama, 541 F.3d 868 (9th Cir. 2008) (above-median debtors with positive disposable income; plan length relevance)
- In re Powers, 202 B.R. 618 (9th Cir. BAP 1996) (modification not limited to substantial, unanticipated changes)
- In re Anderson, 21 F.3d 355 (9th Cir. 1994) (trustee may modify; dicta on change in ability to pay)
- Ransom v. FIA Card Services, 131 S. Ct. 716 (2011) (vehicle ownership expense; modification potential when car payments cease)