This appeal requires us to examine the meaning and application of the phrases “projected disposable income” and “applicable commitment period” in 11 U.S.C. § 1325(b), as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”). The specific question before us is whether an above-median Chapter 13 debtor’s plan must extend for five years, i.e., the length of the “applicable commitment period,” or whether a bankruptcy court can confirm a shorter plan period when the debtor has a negative “disposable income” as defined in 11 U.S.C. § 1325(b)(2) and calculated on Form 22C. The bankruptcy court held that a shorter plan period is permissible and thus confirmed Craig Matthew Frederick-son’s (the debtor’s) proposed forty-eight-month plan.
In re Frederickson,
I. Background
The facts of this case are not in dispute. Frederickson’s current monthly income is above the median income level for his state of residence, and therefore he is an “above-median” debtor. See 11 U.S.C. § 1325(b)(3). His disposable income, defined in 11 U.S.C. § 1325(b)(2) and calculated on Form 22C, 1 is a negative amount ($-95.49). The parties agree that because of this calculation, Frederickson has no “projected disposable income” as referred to in 11 U.S.C. § 1325(b)(1)(B). Nevertheless, the calculations on Frederickson’s Schedule I (current income) and Schedule J (current expenditures) indicate that he has a monthly net income of $606. Fred-erickson proposed a plan to pay his unsecured creditors $600 per month for forty-eight months. Under this plan, Frederick-son’s unsecured creditors will receive approximately sixty-one percent of their claims. The trustee objected to this plan because it did not extend for the full five- *655 year “applicable commitment period” referred to in 11 U.S.C. § 1325(b)(4)(A)(ii). If the plan extended for five years, it is estimated that Fredericksoris unsecured creditors would receive almost all, if not all, of their claims.
A bankruptcy court may confirm a Chapter 13 debtor’s plan if the requirements of 11 U.S.C. § 1325(a) are satisfied. If the trustee or the holder of an allowed unsecured claim objects to the confirmation of the plan, however, the bankruptcy court may approve the plan only if (A) the plan provides for payment of 100% of claims, or (B) “the plan provides that all of the debtor’s projected disposable income to be received in the applicable commitment period beginning on the date that the first payment is due under the plan will be applied to make payments to unsecured creditors under the plan.” 11 U.S.C. § 1325(b)(1).
This statutory rubric works when an above-median debtor’s disposable income calculated under Form 22C results in a positive number. But because Frederick-son has a negative disposable income as calculated on Form 22C and the trustee objected to the proposed plan, the bankruptcy court was required to weigh conflicting interpretations of the relevant portions of the statute. One possible interpretation of 11 U.S.C. § 1325(b)(1)(B) is that if the debtor does not have any “disposable income,” and therefore does not have any “projected disposable income,” the debtor’s proposed plan can be confirmed regardless of the amount proposed to be paid and the length of the plan because the amount of projected disposable income “to be received in the applicable commitment period” is $0. 2 A second possible interpretation is that the “applicable commitment period,” as defined in 11 U.S.C. § 1325(b)(4) and used in 11 U.S.C. § 1325(b)(1)(B), is a temporal requirement that must be met even if the debtor does not have any projected disposable income.
The parties have stipulated that Freder-ickson does not have any “projected disposable income” and therefore “there is no minimal amount which must be paid to the general unsecured creditors.”
See In re Frederickson,
*656 Judge Federman dissented from the bankruptcy appellate panel’s affirmance, concluding that the “applicable commitment period” is always a temporal requirement. Citing the House Report on § 1325, he wrote that
BAPCPA was intended by Congress to require that higher income debtors either pay 100% of unsecured claims, or make payments for a period of 5 years. While there is scant legislative history for most of the BAPCPA provisions, the House Report on § 1325(b) makes clear that the applicable commitment period is a durational requirement for the Chapter 13 plan, and not just, as the majority holds, a multiplier.
In re Frederickson,
II. Discussion
Because we are reviewing only legal conclusions made by the bankruptcy court, our review is
de novo. DeBold v. Case,
To determine the congressional intent of statutory text, we begin by looking at the text itself.
Lamie v. U.S. Trustee,
Along with these general rules of statutory construction, the Supreme Court has also acknowledged that in determining the true congressional intent of a statute it can be appropriate to consider all available evidence of that intent rather than limiting the analysis to the text of the statute.
Koons Buick Pontiac GMC, Inc. v. Nigh,
We are presented with that very situation in the case before us. The debtor and the trustee have presented possible interpretations of the text that are supported by authority. Indeed, the differing outcomes of the bankruptcy courts that have examined this issue to date indicate that the language of 11 U.S.C. § 1325(b) is not at all clear.
See In re Laroy Davis,
Neither interpretation fits neatly into the structure of 11 U.S.C. § 1325(b) and simultaneously complies with the overarch
*657
ing purpose of BAPCPA. Frederickson argues that the “applicable commitment period” is not a temporal requirement if the debtor has no “disposable income” as calculated on Form 22C, even if the debtor has disposable income as calculated on Schedules I and J. The resulting outcome of this interpretation is that an above-median debtor who has more actual income than actual expenses, after taking into consideration payment to secured creditors, can have his proposed plan approved without making any payments to unsecured creditors and can close out his plan in a matter of months rather than staying in the system for the full “applicable commitment period” of sixty months.
3
This result does not comport with the clear congressional intent of BAPCPA, which was enacted “ ‘to ensure that debtors repay creditors the maximum they can afford.’ ”
See In re Gonzalez,
The trustee argues that “applicable commitment period” in subsection (b)(1)(B) is a temporal requirement because in subsection (b)(4) that phrase is defined in dura-tional terms rather than as a minimum payment requirement. This interpretation is congruous with the overall structure of the section when the debtor’s Form 22C calculation results in a positive disposable income. But when the debtor’s disposable income is zero or a negative amount, we must either ignore Congress’s definition of “disposable income,” which the statute indicates “shall” be applied for above-median debtors, or we must read a temporal requirement into the language of 11 U.S.C. § 1325(b)(1)(B) by disallowing the confirmation of a proposed plan even though “the debtor’s projected disposable income” to be received in the “applicable commitment period,” i.e., $0, is paid to the debt- or’s unsecured creditors under the plan. Such an interpretation leads to anomalous results because a debtor’s proposed plan to pay $1 each month for sixty months could be approved, while a plan that proposed to pay $1000 per month for fifty-nine months could not be approved.
4
See In re Nance,
In resolving this issue, we look to Congress’s intent that under BAPCPA increased payments will flow from above-median debtors to their unsecured creditors. Accordingly, we must determine not only the meaning of the phrase “applicable commitment period,” but also the phrase “projected disposable income.” 5
In enacting BAPCPA, Congress reduced the amount of discretion that bankruptcy courts previously had over the calculation of an above-median debtor’s income and expenses. Richard S. Stolker,
Debtor’s Perspective: BAPCPA Issues,
40 Md. B.J. 22, May/June 2007, at 23. In determining a debtor’s projected disposable income pre-BAPCPA, the bankruptcy court calculated a debtor’s disposable income based on Schedules I and J and then multiplied that number by the number of months in the plan.
Laroy Davis,
As a result, the proper calculation for “projected disposable income” is not clear. We could postulate that a debtor who had $727 in disposable income each month in the six months prior to filing for bankruptcy, as calculated on Form 22C, will have $727 each month in disposable income in the future. Then, using the same method that was used pre-BAPCPA, we would simply multiply the debtor’s “disposable income” by the number of months in the applicable commitment period to determine how much “projected disposable income” the debtor will likely receive in that period of time. Such a calculation works if the debtor has a positive “disposable income.” If the debtor’s “disposable income” is negative, however, despite the fact that the debtor could afford to make payments to his unsecured creditors, it is necessary to determine whether the “applicable commitment period” is a temporal requirement or a monetary requirement.
This problem arises because “disposable income” is based upon a debtor’s historical income and IRS tables that provide regional averages for common expenses. This calculation may lead to an accurate projection of a debtor’s “projected disposable income,” but it is not necessarily an accurate projection for many Chapter 13 debtors. The historical calculation does not take into consideration a debtor’s current financial situation, which may have
*659
changed substantially between the point in time six months before filing bankruptcy and the point in time when the debtor’s Chapter 13 plan is being proposed. These changes could be the result of,
inter alia,
a promotion at work, the loss of a job, the acquiring of a second job, or increased medical expenses.
See, e.g., In re Hanks,
Thus, a distinction can be drawn between a debtor’s “disposable income,” which is calculated solely on the basis of historical numbers and regional averages, and a debtor’s “projected disposable income,” which necessarily contemplates a forward-looking number. Under this interpretation, bankruptcy courts will continue to have some discretion over the calculations of each individual debtor’s financial situation, with the result that the debtor’s “projected disposable income” will end up more closely aligning with reality. This interpretation also comports with the congressional intent that above-median debtors pay the maximum they can afford and results in making workable the application of 11 U.S.C. § 1325(b)(1)(B) for above-median debtors who have positive “disposable income,” as well as for above-median debtors with negative “disposable income.” If we read the word “projected” out of 11 U.S.C. § 1325(b)(1)(B) and rely solely on the calculation of “disposable income” on Form 22C, the outcome involves anomalous, and perhaps even absurd, results.
See Gonzalez,
Accordingly, we adopt, the view shared by many bankruptcy courts that a debtor’s “disposable income” calculation on Form 22C is a starting point for determining the debtor’s “projected disposable income,” but that the final calculation can take into consideration changes that have occurred in the debtor’s financial circumstances as well as the debtor’s actual income and expenses as reported on Schedules I and J.
See In re Kibbe,
This approach realistically determines how much a debtor can afford to pay his creditors and maximizes the amount the debtor must pay to his unsecured creditors. As aptly noted by the
Kibbe
court, “the object is not to select the right form, but to reach a reality-based determination of a debtor’s capabilities to repay creditors.”
Kibbe,
In arriving at our holding, we have given careful consideration to the Ninth Circuit’s
*661
recent decision in
In re Kagenveama,
The judgments of the bankruptcy court and bankruptcy appellate panel are reversed and the case is remanded to the bankruptcy court for further proceedings in accordance with the views expressed in this opinion.
Notes
. "Disposable income” is defined as the "current monthly income received by the debtor ... less amounts reasonably necessary to be expended....” 11 U.S.C. § 1325(b)(2). "Current monthly income” is based upon historical figures, namely, the average monthly income the debtor received during the six months prior to filing for bankruptcy. 11 U.S.C. § 101(10A). For above-median debtors, "[a]mounts reasonably necessary to be expended” are calculated in accordance with subparagraphs (A) and (B) of 11 U.S.C. § 707(b)(2). 11 U.S.C. § 1325(b)(3).
. Of course, the good faith, feasibility, and other general requirements of 11 U.S.C. § 1325(a) must still be met.
. At oral argument, counsel for the trustee indicated that she had already seen one Chapter 13 case close out after seven months under the bankruptcy court's holding in this case.
. Assuming, of course, that the plan met all other requirements, such as good faith.
See
11 U.S.C. § 1325(a);
Laroy Davis,
. We acknowledge that the trustee in this case has conceded that because Frederickson does not have any "disposable income” as defined in 11 U.S.C. § 1325(b)(2), he does not have a minimum payment requirement under 11 U.S.C. § 1325(b)(1)(B). Appellant's Br. at 9. This concession assumes that the definition of "projected disposable income” is the same as the definition of "disposable income.” Because we conclude otherwise, we must consider the proper interpretation of "projected disposable income.”
. We note, of course, that the "applicable commitment period” in 11 U.S.C. § 1325(b)(1)(B) becomes relevant only after a trustee objects to the debtor's proposed plan. Additionally, because it is not before us, our holding does not address the situation in which a debtor has no actual "projected disposable income” after taking into consideration Form 22C, Schedules I and J, and any change to the debtor’s financial circumstances.
. Whether BAPCPA has accomplished all that it was designed to achieve is a matter of sharp debate. See Mike Meyers, “A Bankrupt System?,” Mpls. Star Tribune, Oct. 12, 2008, at Dl.