In Re Thiel
446 B.R. 434
Bankr. D. Idaho2011Background
- Debtors Michael and Stefanie Thiel filed a joint Chapter 13 petition on February 26, 2010.
- Form 22C indicated total joint monthly income of $12,690.65, placing them above the median for a family of six and establishing a 60-month commitment period.
- Form 22C calculated disposable income at $1,102.70 per month.
- Debtors proposed a plan funding of $93,688 total, with initial payments of $304/month and later varying payments totaling over 60 months.
- Trustee objected to confirmation under §1325(b)(1)(B); Debtors invoked Lanning and Ransom to justify departing from Form 22C but the court must decide if this is permissible.
- The court ultimately denied confirmation, holding that Form 22C must be used consistent with the statutory framework and that the plan did not provide sufficient projected disposable income to unsecured creditors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Form 22C may be disregarded in favor of schedules I and J to determine disposable income. | Thiel argues Lanning permits a forward-looking, schedules-based calculation. | Trustee contends Lanning does not justify discarding Form 22C; Ransom confirms standardized means test. | No; Form 22C must be followed in determining disposable income. |
| Whether Ransom requires adherence to the standard means test rather than schedules I and J for above-median debtors. | Thiel asserts Ransom allows using actual expenses beyond the standard if known or virtually certain. | Trustee argues Ransom preserves the statutory formula and its standard deductions. | Ransom supports sticking to the standardized formula and its allowances. |
| Whether the Plan provides sufficient funding after applying the means test and priority claims. | Debtors claim available funds for unsecured creditors via projections in schedules I and J. | Trustee maintains the plan is underfunded after secured and administrative expenses. | Plan is not confirmable because funds available to unsecured creditors are insufficient. |
| Whether Lanning’s forward-looking approach overrides BAPCPA means-test requirements. | Debtors rely on Lanning to adjust for anticipated changes in income/expenses. | Court should apply Lanning narrowly and in harmony with Ransom and §1325(b). | Lanning cannot override the current statute in favor of a broad, schedules-based adjustment. |
| Whether the tax debt problems independently bar confirmation. | Tax debts reduce feasible distribution to unsecured creditors. | Not dispositive if plan funding were adequate. | Tax claim treatment further undermines confirmation given underfunding. |
Key Cases Cited
- Hamilton v. Lanning, 130 S. Ct. 2464 (2010) (forward-looking disposable income permitted for known or virtually certain changes)
- Ransom v. FIA Card Services, N.A., 131 S. Ct. 716 (2011) (plain language of means test; use standard deduction even if nonstandard actual costs)
- Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008) (pre-BAPCPA case referenced by Lanning context; overruled in part by Lanning/Ransom)