670 B.R. 843
Bankr. E.D. Mich.2025Background
- Debtor Wilbur Porter, II filed a Chapter 13 bankruptcy petition in March 2023, reporting above median income, thus a 60-month plan was required at confirmation.
- Debtor later lost his job with Public Storage (which included housing), resulting in lower income and a new housing expense; he sought to modify his confirmed plan by reducing both the monthly payment (from $746 to $100) and the plan term (from 60 to 36 months).
- The Chapter 13 Trustee originally objected to both the payment and term reduction but ultimately only continued to object to the reduction of the plan’s length, arguing it violated the Bankruptcy Code and creditor interests.
- The proposed modification came after a material, post-confirmation change in financial circumstances (job loss and expense increase), and would not reduce the total distribution to creditors below the liquidation value.
- The bankruptcy court considered whether § 1325(b)’s “applicable commitment period” applies to post-confirmation plan modifications, whether the debtor was relitigating a previously decided issue, and whether the modification was proposed in good faith under § 1325(a)(3).
Issues
| Issue | Debtor's Argument | Trustee's Argument | Held |
|---|---|---|---|
| Does 11 U.S.C. § 1325(b) (applicable commitment period) apply to plan modifications under § 1329? | § 1329 allows reducing plan length; § 1325(b) applies only at initial confirmation, not modification. | § 1325(b) applies to modifications, precluding “above median” debtors from shortening plan unless creditors are paid in full. | § 1325(b) does not apply to modifications; § 1329 controls and permits reduction of time for payments. |
| Is the plan modification improperly relitigating an issue resolved or resolvable at confirmation (contravening § 1327)? | Debtor couldn’t litigate plan length at confirmation as status was above median income then—a status fixed pre-petition per statute. | Plan length was correctly set at confirmation based on then-available facts; modifying solely based on later events is not proper. | No relitigation; post-confirmation reductions in income justify modification under the Code. |
| Does the plan modification comply with § 1325(a)(3) good faith? | Modification filed in good faith, based on genuine income reduction and increased expenses; Debtor continues all available efforts to pay creditors. | Modification not in good faith; Debtor could make more payments, creditors expected greater recovery. | Modification is feasible and made in good faith; good faith is met when debtor commits all disposable income post-confirmation and cannot pay more reasonably. |
| Is the modification otherwise feasible and legally appropriate? | Plan is feasible based on current income and expenses; if filed post-job loss, it would be confirmable. | Debtor has been making plan payments despite loss; could continue; no compelling case for reduction in term. | Plan modification is feasible; debtor meets requirements for a shortened plan. |
Key Cases Cited
- In re MCP No. 185, 124 F.4th 993 (6th Cir. 2025) (court must begin statutory construction with plain language)
- Fullenkamp v. Veneman, 383 F.3d 478 (6th Cir. 2004) (plain meaning is controlling in statutory interpretation)
- Chrysler Corp. v. Commissioner, 436 F.3d 644 (6th Cir. 2006) (do not render statutory provisions superfluous)
- Saginaw Chippewa Indian Tribe of Michigan v. Blue Cross Blue Shield of Michigan, 32 F.4th 548 (6th Cir. 2022) (plain language expresses legislative purpose)
- Brilliance Audio, Inc. v. Haights Cross Communications, Inc., 474 F.3d 365 (6th Cir. 2007) (ambiguity found where two plausible readings exist)
- Hamilton v. Lanning, 560 U.S. 505 (2010) (post-petition income changes considered for plan payments, not applicable commitment period)
- Society Nat'l Bank v. Barrett (In re Barrett), 964 F.2d 588 (6th Cir.1992) (good faith in Chapter 13 requires totality of the circumstances analysis)
- Metro Employees Credit Union v. Okoreeh–Baah (In re Okoreeh–Baah), 836 F.2d 1030 (6th Cir. 1988) (good faith is a fact-specific determination in bankruptcy)