In re: Richard L. Black, 609 B.R. 518

Background

Richard L. Black filed bankruptcy, converted from Chapter 7 to Chapter 13, and listed a rental property (originally valued lower) that he claimed would be sold or refinanced. The confirmed Chapter 13 plan required $45,000 to be paid to unsecured creditors upon sale or refinance and set a 59‑month payment term (despite a 36‑month applicable commitment period).
The confirmed plan included a revesting clause: property scheduled under §521 would vest in the debtor on confirmation. Trustee did not object to confirmation of the amended plan.
About three years later Black sold the property for $107,000. He proposed paying the $45,000 specified in the plan and keeping the excess (~$50,689). The Trustee opposed his retaining the excess.
The bankruptcy court authorized the sale, ordered $49,000 paid to the Trustee, and then approved a Trustee‑filed Modified Plan that (among other limited amendments) committed additional sale proceeds to the plan and required turnover of sale proceeds to the Trustee.
Black objected, arguing the modification was untimely (he had effectively completed payments), the Modified Plan failed to meet statutory requirements, and prepetition property proceeds could not be compelled into the plan per In re Burgie. The bankruptcy court approved the Modified Plan; Black appealed.

Issues

Issue	Plaintiff's Argument (Black)	Defendant's Argument (Trustee)	Held
Timeliness of modification under §1329 (when do payments "complete")	Black: He completed plan payments early by paying off the remaining balance with sale proceeds, so modification period expired.	Trustee: "Completion" means completion of payments for the plan term as written (59 months); modification is allowed until plan payments are complete under original plan.	Court: Timely. Payments not "complete" because plan term remained in effect; trustee filed before end of 59‑month term.
Whether the Modified Plan complied with §§1329/1322/1325 (form and mandatory requirements)	Black: Modified Plan was defective—no new payment schedule, no date for turnover, no liquidation accounting, no proof debtor can make payments.	Trustee: Modified only limited sections and incorporated the confirmed plan; satisfied statutory requirements.	Court: Proper. Limited amendments incorporated the confirmed plan; statutory requirements met.
Whether proceeds from sale of prepetition property (postconfirmation appreciation) are estate property/disposable income and must be turned over	Black: Property revested at confirmation under §1327(b); proceeds from sale of prepetition asset are not disposable income and debtor may keep postconfirmation appreciation (citing Burgie).	Trustee: Sale proceeds are property of the estate under §1306/§541(a)(6); must be turned over to increase distributions.	Court: Reversed as to excess proceeds. Followed Burgie and Ninth Circuit BAP/Ninth Circuit precedent: revesting provision vests property in debtor at confirmation, so postconfirmation appreciation/proceeds (beyond the $45,000 pledged in plan) did not have to be committed to creditors.

Key Cases Cited

In re Burgie, 239 B.R. 406 (9th Cir. BAP 1999) (proceeds from sale of prepetition real estate after confirmation are not disposable income that can be compelled into plan payments)
In re Fridley, 380 B.R. 538 (9th Cir. BAP 2007) (prepayment does not "complete" plan for modification/discharge purposes absent a §1329 modification shortening term)
In re Escarcega, 573 B.R. 219 (9th Cir. BAP 2017) (payments are complete only after the plan duration provided in the initial plan, absent modification)
In re Jones, 420 B.R. 506 (9th Cir. BAP 2009) (plan confirmation revests estate property in the debtor under §1327(b))
Cal. Franchise Tax Bd. v. Kendall (In re Jones), 657 F.3d 921 (9th Cir. 2011) (affirming that property revests in debtor on confirmation under §1327(b))
Barbosa v. Solomon, 235 F.3d 31 (1st Cir. 2000) (contrasting authority holding postconfirmation appreciation can be estate property)