In Re Thomas
443 B.R. 213
Bankr. N.D. Ga.2010Background
- Debtor filed Chapter 13 petition March 11, 2010; SSI appeared on Schedule I as part of income.
- SSI was initially deducted as exempt on Schedule J, producing $500.43 monthly net income.
- On May 13, 2010, Debtor amended Schedule J to omit SSI deduction, increasing net income to $1,959.43.
- Debtor filed an amended Plan proposing $607 monthly payments with zero dividend to unsecured creditors.
- Trustee objected to Confirmation on good faith grounds due to large SSI-derived surplus.
- Court denied Confirmation, holding SSI is excluded from PDI but plan not made in good faith; permitted amended plan within 28 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SSI must be included in projected disposable income (PDI). | Thomas argues SSI should be included in PDI based on Lanning discretion. | Thomas contends SSI is excluded from PDI because CMI excludes SSI and Lanning is inapplicable here. | SSI excluded from PDI; PDI derived from CMI, which excludes SSI. |
| Whether the plan is proposed in good faith under §1325(a)(3). | Trustee asserts plan yields large SSI surplus with zero to unsecured creditors. | Debtor argues plan complies with Code and exemptions, not contrast with creditors. | Plan not proposed in good faith; confirmation denied but can amend within 28 days. |
Key Cases Cited
- Hamilton v. Lanning, 130 S. Ct. 2464 (2010) (guides PDI as forward-looking; allows discretion for changes in income/expenses)
- In re Cranmer, 433 B.R. 391 (Bankr.D.Utah.2010) (SSI excluded from CMI but included in PDI under certain circumstances)
- In re Schnabel, 153 B.R. 809 (Bankr.N.D.Ill.1993) (SSI included in PDI based on fresh start reasoning)
- In re Wilson, 397 B.R. 299 (Bankr.M.D.N.C.2008) (post-BAPCPA definition changes; disposable income framework)
- In re Barfknecht, 378 B.R. 154 (Bankr.W.D.Tex.2007) (SSI not in CMI or PDI; cautions about statutory limits)
- In re Upton, 363 B.R. 528 (Bankr.S.D.Ohio.2007) (surplus not allowed when debtor accumulates savings while paying creditors less)
- In re Shelton, 370 B.R. 861 (Bankr.N.D.Ga.2007) (totality of circumstances; considerations of debtor’s assets and plan treatment)
- In re Kitchens, 702 F.2d 885 (11th Cir.1983) (totality of circumstances framework in good faith)