Zeman v. Liehr (In Re Liehr), 439 B.R. 179

Liehrs filed for Chapter 13 in 2008, proposing surrender of their residence and plan payments to unsecured creditors.
Form 22C noted a deduction for secured mortgage payments on the residence to be surrendered, reducing disposable income.
Creditors objected that deductions for secured debt relief under surrender should be disallowed, increasing payments to unsecured creditors.
Bankruptcy court confirmed the plan despite objections, applying the means-test-based disposable income including the surrendered mortgage expenses.
On appeal, the panel considered whether projected disposable income (PDI) could be reduced for known changes in circumstances, notably surrender of the secured residence.
The court ultimately reversed and remanded, adopting a forward-looking approach post-Lanning to account for changes in circumstances such as planned surrender.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether PDI can be reduced for surrendered secured debt	Liehrs' PDI should reflect ongoing mortgage expenses even if surrender occurs.	Payment of secured debt is not subtracted from PDI if the property will be surrendered under the plan.	No; PDI may be reduced to account for surrendered secured debt under forward-looking approach.
Whether § 1325(b)(1)(B) requires all projected disposable income to be paid to unsecured creditors	Plan does not use all PDI to pay unsecured creditors.	Mechanical interpretation may suffice; PDI can be calculated with means-test expenses.	Forward-looking approach requires application of all PDI to unsecured creditors when plan is confirmed.
Whether Lanning requires considering changes known at confirmation for both income and expenses	Lanning allows adjustments for known changes on income side; not clear for expenses.	Lanning supports forward-looking adjustments for known changes in expenses as well.	Lanning applies to both income and expenses; changes known at confirmation are permissible for PDI.

In re Lanning, 545 F.3d 1269 (10th Cir. 2008) (establishes forward-looking approach to PDI including expenses)
Lanning, 130 S. Ct. 2464 (2010) (Supreme Court adopts forward-looking approach for PDI)
In re Darrohn, 615 F.3d 470 (6th Cir. 2010) (upholds forward-looking expense adjustments for surrendered property)
In re Turner, 574 F.3d 349 (7th Cir. 2009) (expense deductions for secured debt may be altered between filing and confirmation)
In re Lanning, 380 B.R. 17 (10th Cir. BAP 2007) (pre-Supreme Court; discusses starting point for PDI as current monthly income)