646 B.R. 810
Bankr. E.D. Wis.2022Background
- Two Chapter 13 debtors (Nelson and Ramos) obtained temporary plan-length extensions under CARES Act § 1329(d), confirmed at 84 months and 76 months respectively.
- § 1329(d) (which allowed up to 7-year plans) sunset on March 27, 2022; § 1329(c) (limiting modified plans to 5 years) remained in force.
- Both debtors later sought to modify only the monthly payment amount while keeping their previously confirmed extended plan terms.
- Chapter 13 trustee objected, arguing § 1329(c) prohibits confirmation of any modification that yields a plan providing for payments beyond five years from the original plan’s first payment.
- The court held hearings and received briefs addressing whether a post-sunset modification that preserves an earlier CARES Act extension violates § 1329(c).
- Ruling: the court ruled § 1329(c) unambiguous and barred confirmation of modifications that would result in plans expressly providing for payments beyond 60 months; Nelson was ordered to file a compliant plan and Ramos’s modification was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 11 U.S.C. § 1329(c) bars a debtor from modifying a confirmed Chapter 13 plan to change payment amount while preserving a plan-length extension earlier approved under now-expired § 1329(d). | Debtors: denying such a modification would be absurd and retroactively nullify earlier CARES Act extensions; courts (e.g., Mercer) allowed retention of extensions. | Trustee/Court: § 1329(c)’s plain text limits any plan modified under § 1329 to a maximum five-year payment period; § 1329(d) has expired and cannot exempt later modifications. | Court: § 1329(c) is unambiguous; a proposed modification that results in a plan expressly providing payments beyond 60 months cannot be confirmed. Nelson ordered to cure; Ramos’s modification denied. |
Key Cases Cited
- Germeraad v. Powers, 826 F.3d 962 (7th Cir. 2016) (holds a modification may not result in a plan exceeding § 1329(c) limits)
- Lamie v. U.S. Trustee, 540 U.S. 526 (2004) (courts start with the existing statutory text; plain language controls)
- Ron Pair Enterprises v. Governors of the State Coll. of Maryland, 489 U.S. 235 (1989) (establishes the primacy of statutory text absent absurdity)
- Jaskolski v. Daniels, 427 F.3d 456 (7th Cir. 2005) (narrow application of anti-absurdity canon; courts should not rewrite statutes)
- In re Witkowski, 16 F.3d 739 (7th Cir. 1994) (§ 1329 modifications are limited by the statute’s enumerated circumstances)
- In re Goodrich, 587 B.R. 829 (Bankr. D. Vt. 2018) (counsels careful statutory interpretation; avoid judicially curing perceived legislative errors)
- In re Mercer, 640 B.R. 577 (Bankr. D. Colo. 2022) (permitted retention of a CARES Act plan extension after § 1329(d) sunset; provided limited analysis)
- In re Bohinski, 638 B.R. 870 (Bankr. E.D. Mich. 2022) (refused to confirm post-sunset modifications that would result in plans longer than five years)