In Re Briscoe
- Reporters:
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- Before:
- Teel
MEMORANDUM DECISION REGARDING CHAPTER 13 TRUSTEE’S OBJECTION TO CONFIRMATION OF DEBTOR’S FIRST AMENDED PLAN
S. MARTIN TEEL, JR., Bankruptcy Judge.
This case is governed by the Bankruptcy Code (11 U.S.C.) as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub.L. No. 109-8, 119 Stat. 23 (generally effective Oct. 17, 2005) (“BAPCPA”). The parties are in agreement that
I
STATUTORY FRAMEWORK
When a debtor seeks relief under chapter 13 of the Bankruptcy Code,
One of the requirements set forth in
The debtor’s calculation of disposable income in her statement of current monthly income (Official Form 22C) includes a deduction for rent in the amount of $1,012 — the expense for rent listed in the Local Standards table — even though the
II
INTERPRETATION OF
Like so many issues raised by BAPCPA’s amendments to the Bankruptcy Code, the question of whether Congress intended for the values contained within the Local Standards of the Financial Analysis Handbook to serve as fixed values or caps in determining a debtor’s monthly expenses is a hotly contested one. Most courts have held that the figures set forth in the Local Standards should apply regardless of the debtor’s actual expenses,
4
What does the word ‘applicable’ mean in this context? Does it mean, as the debt- or suggests, that you cross-match the debtor’s location and status against the standards as published, and no more? Or does it mean, as the trustee contends, that this court should interpret the standards as the IRS would, including any direction or discretion given to IRS employees by the IRS internal publications?
In re Slusher, 359 B.R. at 307-08; see also In re Farrar-Johnson, 353 B.R. at 230 (“An expense could be ‘appropriate’ for a debtor to claim because he actually incurs that expense. It could also be ‘appropriate’ to claim because he lives in a certain state and county and has a household of a certain size, putting him in the right box on the Local Standards chart.”).
Judge Markell opted to interpret “applicable” as meaning the Local Standard expense as adjusted by the IRM, reasoning that “[i]n referring to such specialized standards, it would be quite odd if Congress intended to preclude courts from examining the context in which the authoring agency . . . used and employed those standards.”
In re Slusher,
359 B.R. at 309. From his perspective, if Congress did not want the complete Local Standards equa
Most courts disagree with Judge Mar-kell. They focus on language found later in the same sub-part of
At first blush, the interpretation of the statute by the courts in
Slusher
and
Rez-entes
would seem to be the more intuitive reading of
But looks can be deceiving, and in this case the arguments which seemed so appealing to me when I first considered this issue betray some flaws upon closer inspection. In the first place, there is some logic in looking only at the values set forth in the Local and National Standards with
Regardless of the source of the values, the point is that the IRS collected and applied objective data in supplying values for the National and Local Standards. This raw data is readily adaptable for use in other contexts. The provisions of the Financial Analysis Handbook dictating how that data should be used are not so malleable. They are instructions directed at a specific audience (tax collectors) for a specific purpose (collecting delinquent taxes). Assuming that Congress did not intend for debtors and the courts and trustees that oversee them to become amateur tax collectors, it would be much odder for Congress to have imported the IRS’s internal collection procedures into the Bankruptcy Code than for Congress to have referred to the objective data used in applying those procedures without requiring debtors to follow the procedures themselves. See In re Chamberlain, 369 B.R. at 525-26 (“The IRS is not an administrative agency that administers the Bankruptcy Code, so there is no basis for a [cjourt to defer to its administrative expertise.”).
Such an approach seems odder still when one considers the function of
Ultimately, though, it is the language of
In interpreting the plain language of
The legislative history of BAPCPA supports this reading of
Finally, the oddity of there being a disparity regarding how disposable income is computed for above-median income debtors (allowing use of the Local Standards housing expense when the actual expense is less) versus below-median income chapter 13 debtors (who are limited to actual expenses) is an insufficient basis for interpreting
Allowing a deduction for the amounts specified in the Local Standards produces no anomalous results; to the contrary, it serves to reduce administrative complexity and avoid penalizing debtors who choose less expensive housing and transportation in order to have funds available to meet other needs.
Wedoff,
supra,
at 256 n. 62. A presumption of abuse under the means test of
Similarly, Congress rationally could have decided that the chapter 13 plans of above-median income debtors present the greatest potential for abuse, and could have decided to employ largely objective
The use of fixed amounts under the National and Local Standards relieves the court of the obligation to make largely subjective judgments regarding what is a reasonable expense. When an above-median income debtor employs the National Standards and Local Standards in computing certain expenses for disposable income purposes, that results in an aggregate amount of expenses under those Standards that are deemed not to be excessive in comparison to the expenses of other similarly situated individuals. For example, if a debtor elects to spend a modest amount on housing (compared to the typical debt- or) and to devote the excess over the applicable housing expense under the Local Standards to vacations, that does not offend the means test: as long as the aggregate of his expenses are determined utilizing
Nevertheless, this approach will produce some odd results. A debtor having income just under the median income and having expenses identical to those of a debtor who has income just over the median income may be required to pay more under a plan than the above-median income debtor. This could occur because the below-median income debtor is limited to his actual housing expense in computing disposable income whereas the above-median income debtor employs the housing expense under the Local Standards and is not limited to his actual housing expense.
7
However, Congress was free to limit
In
I recognize the intuitive logic of applying the values set forth in the Local Standards in a manner consistent with the Financial Analysis Handbook; indeed, I have twice ruled from the bench that those standards should apply in determining a debtor’s monthly expenses for purposes of
Ill
STATUTORY CONSTRUCTION OF THE TERM “PROJECTED DISPOSABLE INCOME” IN
My interpretation of
The modifier “projected” is defined by the Oxford English Dictionary as meaning “[pjredicted; calculated or forecast on the basis of current trends or data.” Oxford English Dictionary vol. XII at 599 (2d ed.1989). The question is whether Congress intended for courts to use the “current . . . data” provided by Official Form 22C as a basis for “calculating]” amounts to be paid to unsecured creditors (by simply multiplying the current monthly income times the number of months in the “applicable commitment period”) or, instead, for “forecasting]” such amounts (by using the current monthly income as a starting point for determining the amount of funding required).
Not surprisingly, courts have split over this issue, albeit in a lopsided fashion. Most courts have followed Judge Thurman’s decision in
In re
Jass, 340 B.R. 411 (Bankr.D.Utah 2006), and Judge Nelms’s decision in
In re Hardacre,
338 B.R. 718 (Bankr.N.D.Tex.2006), in concluding that “[§ ] 1325(b)(1)(B)’s requirement that a plan propose to pay ‘projected disposable income’ means that the number resulting from Form 22C is a starting point for the [cjourt’s inquiry only.”
In re Jass,
340 B.R. at 415;
see also In re Hardacre,
338 B.R. at 722 (“The court believes that the term ‘projected disposable income’ must be based upon the debtor’s anticipated income during the term of the plan, not merely an average of her pre[-]petition income.”).
9
A smaller number of courts agree with Judge Leonard’s conclusion in
In re Alexander,
344 B.R. 742 (Bankr.E.D.N.C.2006), that “to arrive at ‘projected disposable income,’ one simply takes the calculation mandated by
(A) means the average monthly income from all sources that the debtor receives (or in a joint case the debtor and the debtor’s spouse receive) without regard to whether such income is taxable income, derived during the 6-month period ending on—
(I) the last day of the calendar month immediately preceding the date of the commencement of the case if the debt- or files the schedule of current income required by section 521(a)(l)(B)(ii); or (ii) the date on which the current income is determined by the court for purposes of this title if the debtor does not file the schedule of current income required by section 521(a)(l)(B)(l); and
(B) includes any amount paid by any entity other than the debtor (or in a joint case the debtor and the debtor’s spouse) on a regular basis for the household expenses of the debtor or the debt- or’s dependents (and in a joint case the debtor’s spouse if not otherwise a dependent), but excludes benefits received under the Social Security Act, payments to victims of war crimes or crimes against humanity on account of their status as victims of such crimes, and payments to victims of international terrorism (as defined in section 2331 of title 18) or domestic terrorism (as defined in section 2331 of title 18) on account of their status as victims of such terrorism.
Should a court interpret “projected” to mean that it should
compute
“disposable income” as thus defined or, instead, as meaning that the court should
forecast
that “disposable income?” Strictly speaking, it would be absurd to attempt to forecast the debtor’s “average monthly income . . . derived during the 6-month period ending on . . . the last day of the calendar month
immediately preceding the date of the commencement of the case”
unless one anticipated the filing of a new bankruptcy petition at some point in the future. But the alternative is no less confounding, for if, as the
Alexander
court suggests, the modifier “projected” means only that the debtor must multiply his “current monthly income” figure from Official Form 22C less the expenses calculated on that same form (for above-median income debtors) or on Schedule J (for below-hiedian income debtors) by the number of months in the applicable commitment period, then the only way to give any meaning to the phrase
“to be received
in the applicable commitment period” would be to conclude that a debtor must commit only that portion of the product of his calculation that is “to be received” by the debtor;
i.e.,
the
lesser
of his Official Form 22C figure and his actual
One way or the other, a court must do violence to the “plain meaning” of
Before BAPCPA became effective in 2005, there was no question that the phrase “projected disposable income” referred to income that was predicted for the future, not calculated from the past.
12
Courts used a debtor’s schedules as a “starting point” for predicting the debtor’s future income as a matter of practice, but the figure arising from those schedules was not determinative.
In re Jass,
340 B.R. at 417. Not only could a party-in-interest successfully object to the debtor’s plan under
Given the prior practice of courts in interpreting the phrase “projected disposable income,” one would have expected Congress to have altered the phrase, provided a different definition for the old modifier, or at least made clear in the legislative history of its other amendments to
“Congress acts intentionally and purposefully when it includes particular language in one section of a statute but omits it in another.”
BFP v. Resolution Trust Corp.,
511 U.S. 531, 537, 114 S.Ct. 1757, 128 L.Ed.2d 556 (1994). Interpreting the term “projected” in the manner done by the
Alexander
court would effectively re-write
The purpose underlying
Nothing in the text or legislative history of BAPCPA suggests that Congress intended to abandon the principles that led to the creation of the projected disposable income test twenty-three years ago. To the contrary, Congress crafted the means test to “ensure that those who can afford to repay some portion of their unsecured debt [be] required to do so.” 151 Cong. Rec. S2470 (March 10, 2005). “If the purpose of the disposable income calculations in the [c]hapter 13 context is to ferret out exactly how much money a debtor has available to pay creditors . . . then looking only to the income the debtor made in the six months before he files does not further that objective.” In re Balcerowski 353 B.R. at 590.
Indeed, interpreting the phrase “projected disposable income” to refer to income predicted for the future actually leads to results more in tune with the “means test” set forth in
This discrepancy permits two possible inferences regarding for a debtor whose declining income is a “special circumstance” under
For all of these reasons, I agree with the
Jass
and
Hardacre
line of eases that the phrase “projected disposable income” in
Instead, “courts must consider changes in circumstances, both increases and decreases to income and expenses, to a debtor’s financial situation,
being always guided by the allowed methodology set forth in the means test.
”
In re LaPlana,
363 B.R. at 266 (emphasis added).
22
Where an above-median income debtor is concerned, the debtor (or other party-in-interest) must demonstrate either a change or reasonably anticipated change in the debtor’s income using the methodology set forth in
IV
GOOD FAITH REQUIREMENT OF
In addition to satisfying the projected disposable income requirement of
The means test now incorporated into the “projected disposable income” requirement accomplishes Congress’ goal of removing discretion from the judiciary, thereby preventing wayward judges from abusing their discretion by crediting debtors for unreasonable expenses. Unfortunately, it also introduces a new means for abuse of the system, as opportunistic debtors may be able to claim expenses under the Local or National Standards that they do not actually have.
25
In those extreme
That this is the proper interpretation of
(A) whether the debtor filed the petition in bad faith; or
(B) the totality of the circumstances . . . of the debtor’s financial situation demonstrates abuse.
Courts have interpreted
A handful of courts interpreting
Consider a hypothetical above-median income debtor who inherited his expensive home mortgage-free, and whose actual housing expense is thus zero, but who, under the Local Standards, would be entitled to a mortgage/rent expense of $1,012 for purposes of
Only those debtors engaging in subterfuge so blatant as to indicate that they have “unfairly manipulated the Bankruptcy Code, or otherwise proposed [their] [c]hapter 13 plan in an inequitable manner,”
In re Goeb, 675
F.2d 1386, 1390 (9th Cir.1982), will run afoul of
In this case, the debtor has filed a plan of repayment that commits virtually the same amount of funds to unsecured creditors ($260 per month) as the amount of monthly disposable income that the debtor actually receives ($264). There is no basis for concluding that the debtor’s plan is filed in bad faith. The chapter 13 trustee’s objection to confirmation will be overruled and the debtor’s first amended plan confirmed.
y
CONCLUSION
I freely admit that my decision today may not withstand the test of time. It
With that
caveat
in mind, I believe that my decision today is both faithful to the letter and spirit of BAPCPA and practicable for debtors and trustees alike. In the vast majority of cases, the figures derived from Official Form 22C will decide how much money is to be committed to unsecured creditors in the debtor’s chapter 13 plan for above-median income debtors. Where use of the means test figures would not reflect the reality of the debtor’s actual situation to the debtor’s disadvantage, the debtor can produce evidence showing a change in income or “special circumstances” warranting an increase in permitted monthly expenses. Where use of the means test suggests that the debtor intends to manipulate the chapter 13 process in an unfair manner, the chapter 13 trustee and creditors can object under
As for the plan at issue in this case, I find that it satisfies the requirements of
An order follows.
Notes
. This decision reaches a result contrary to my previously vacated oral decision of June 22, 2007, in this case, and my prior oral decision regarding this issue in a separate chapter 13 case involving an entirely different debtor, In re Hare, Case No. 06-00106 (Bankr.D.D.C.). The debtor in Hare modified her plan to provide for full repayment of unsecured claims following my ruling, and an order confirming the modified plan was entered shortly thereafter. My ruling today abrogates entirely my oral ruling in Hare.
.
At least one court has concluded that “[§ ] 1325(b)(3) should not be interpreted as categorically substituting the [§ ] 707(b)(2) expense restrictions for the ‘reasonably necessary’ expense requirement already imposed by [§ ] 1325(b)(2),” but instead “should be interpreted as offering a further guideline for ensuring that the expenses claimed by an above-median-income debtor are reasonably necessary.’
In re McGillis,
370 B.R. 720, 730-31 (Bankr.W.D.Mich.2007). I respectfully disagree with this analysis.
. The $1,012 figure comes from the Local Standards table for housing expenses. That table gives housing expense values organized by the date at which the bankruptcy was filed, the state of residence, and household size. In this case, the debtor filed her petition in November of 2006, lives in the District of Columbia, and has a household size of one. The corresponding housing expense is $1,012 per month. USDOJ.com, Bankruptcy Allowable Living Expenses (Cases Filed Between October 1, 2006, and January 31, 2007, Inclusive), http://www.usdoj.gov/usVeoA3apcpa/ 2006100 l/bci_data/housing_charts/irs_ housing_charts_DC.htm (last visited Aug. 30, 2007).
.
See In re Sawdy,
362 B.R. 898, 911-13 (Bankr.E.D.Wis.2007) (“above-median-income debtors may deduct the Local Standardes] amount, regardless of whether they have an actual ownership expense”);
In re Farrar-Johnson,
353 B.R. 224, 230 (Bankr.N.D.Ill.2006) (“The debtors were entitled to claim [the Local Standards expense] whether they had it or not.”);
In re Fowler,
349 B.R. 414, 415-421 (Bankr.D.Del.2006) (“[b]y reference to the National and Local Standards, Congress intended the [c]ourt to use a chart of standard expenses for all debtors which could be easily and uniformly applied”);
In re Demonica,
345 B.R. 895, 903 (Bankr.N.D.Ill.2006) (holding that “a debtor may claim the full Local Standard expense for housing”);
In re Grunert,
353 B.R. 591, 594 (Bankr.E.D.Wis.2006) (“Treating the Local Standard deductions for vehicle ownership as fixed allowances rather than caps on actual expenses is supported by the plain meaning of the statute (‘applicable’ versus ‘actual‘), the legislative history, and carefully reasoned caselaw.”);
In re McGuire,
342 B.R. 608, 613 (Bankr.W.D.Mo.2006) (“[I]f the expense is applicable (because the debtor is actually incurring expenses for the purchase or lease of a vehicle), then because the monthly ownership amount ‘shall be’ the ‘amount specified’ in the Standards,
.
See In re Rezentes,
368 B.R. 55, 61-62 (Bankr.D.Haw.2007) (“I conclude that, for purposes of calculating projected disposable income, debtors may deduct the local standard housing expense or their actual housing expense, whichever is less.”);
In re Slusher,
359 B.R. 290, 309 (Bankr.D.Nev.2007) (“For better or worse, Congress referred to the IRS National and Local Standards in
. The Farrar-Johnson court explained this rationale as follows:
Congress drew a distinction in the statute between “applicable” expenses on the one hand and “actual” expenses on the other. “Other Necessary Expenses” must be the debtor’s “actual” expenses. Expenses under the “Local Standards,” in contrast, need only be those “applicable” to the debt- or — because of where he lives and how large his household is. It makes no difference whether he “actually” has them.
. Indeed, if an above-median income debtor‘s income were to dip after confirmation of a plan to a below-median income level, the trustee might argue that he is entitled to obtain a modification of the debtor’s plan under
. One of the co-sponsors of BAPCPA, Senator Charles “Chuck” Grassley of Iowa, opined in a floor statement issued after the enactment of BAPCPA that it was not “the intent of the law” for “consumers to claim deductions for expenses a debtor may not even have.” Floor Statement of United States Senator Chuck Grassley, December 6, 2006, available at http://grassley.senate.gov/index.cfmPFuse Action=PressReleases.Detail & PressRe-lease_id=5227&Month=12&Year=2006 (last visited Aug. 30, 2007). The court respects Senator Grassley’s views on this subject, but his post-enactment articulation of his personal understanding of the statute’s purpose cannot control. When Congress enacted BAPC-PA, its intent was evidenced by the legislative history and statutory language with which this court has wrestled, and utilizing those materials, I have done the best I can to ascertain Congress‘s intent. Congress, as a whole, has the ability to amend a statute’s language if it has led to a result that Congress deems unwise, but individual members of Congress cannot change the meaning of that language via post-enactment comments.
This is not say that Senator Grassley’s concerns are off the mark. There is at least a valid question as to whether a debtor who calculates his disposable income using expenses that he does not actually have is abusing the chapter 13 process. I address this issue in my discussion of the good faith requirement of
. Accord Kibbe v. Sumski (In re Kibbe), 361 B.R. 302, 307-15 (1st Cir. BAP 2007); In re Upton, 363 B.R. 528, 532-34 (Bankr.S.D.Ohio 2007); In re Edmondson, 363 B.R. 212, 214-18 (Bankr.D.N.M.2007); In re Carlton, 362 B.R. 402, 405-06 (Bankr.C.D.Ill.2007); In re Riggs, 359 B.R. 649, 650-53 (Bankr.E.D.Ky.2007); In re LaPlana, 363 B.R. 259, 264-66 (Bankr.M.D.Fla.2007); In re Slusher, 359 B.R. at 294-300; In re Devilliers, 358 B.R. at 856-59; In re Ward, 359 B.R. 741, 744 (Bankr.W.D.Mo.2007); In re Pak, 357 B.R. 549, 551-53 (Bankr.N.D.Cal.2006); In re Casey, 356 B.R. 519, 522-24 (Bankr.E.D.Wash.2006); In re Thicklin, 355 B.R. 856, 858-59 (Bankr.M.D.Ala.2006); In re Sparks, 360 B.R. 224, 228 n. 11 (Bankr.E.D.Tex.2006); In re Balcerowski, 353 B.R. 581, 589-90 (Bankr.E.D.Wis.2006); In re LaSota, 351 B.R. 56, 58-63 (Bankr.W.D.N.Y.2006); In re Edmunds, 350 B.R. 636, 645-47 (Bankr.D.S.C.2006); In re Wayman, 351 B.R. 808, 811 n. 7 (Bankr.E.D.Tex.2006); In re Demonica, 345 B.R. at 899-900; In re McPherson, 350 B.R. 38, 42-48 (Bankr.W.D.Va.2006); In re Risher, 344 B.R. 833, 834-37 (Bankr.W.D.Ky.2006); In re Dew, 344 B.R. 655, 659-61 (Bankr.N.D.Ala.2006); In re Grady, 343 B.R. 747, 750-52 (Bankr.N.D.Ga.2006); In re Fuller, 346 B.R. 472, 475-83 (Bankr.S.D.Ill.2006); In re McGuire, 342 B.R. at 613-14; In re Renicker, 342 B.R. 304, 307-09 (Bankr.W.D.Mo.2006); In re Mullen, 369 B.R. 25, 31-35 (Bankr.D.Or.2007); In re Watson, 366 B.R. at 528-32; In re Nowlin, 366 B.R. 670, 673-75 (Bankr.S.D.Tex.2007); In re Grant, 364 B.R. 656, 663-67 (Bankr.E.D.Tenn.2007); In re Zimmerman, No. 06-31086, 2007 WL 295452, at *2-8 (Bankr.N.D.Ohio Jan.29, 2007); In re Foster, No. 05-50448 HCD, 2006 WL 2621080, at *3-8 (Bankr.N.D.Ind. Sept.11, 2006).
. Accord In re Brady, 361 B.R. 765, 768-75 (Bankr.D.N.J.2007); In re Miller, 361 B.R. 224, 228-35 (Bankr.N.D.Ala.2007); In re Hanks, 362 B.R. 494, 496-501 (Bankr.D.Utah 2007); In re Tuss, 360 B.R. 684, 690-96 (Bankr.D.Mont.2007); In re Girodes, 350 B.R. 31, 36-38 (Bankr.M.D.N.C.2006); In re Rotunda, 349 B.R. 324, 326-33 (Bankr.N.D.N.Y.2006); In re Farrar-Johnson, 353 B.R. at 227-30; In re Barr, 341 B.R. 181, 183-86 (Bankr.M.D.N.C.2006); In re McGillis, 370 B.R. at 724-27; In re Winokur, 364 B.R. 204, 205-06 (Bankr.E.D.Va.2007).
. Alternatively, an interpretation that straddles the two different meanings of “projected” is to read the statute as requiring debtors to commit the average of their income that is received in both (1) the six months prior to the commencement of the case and (2) the “applicable commitment period;” i.e., the three or five years following confirmation of the debtor‘s plan. This alchemistic construction strikes me as implausible.
. As Judge Markell notes in Slusher, “the term projected disposable income’ as used in [§ ] 1325(b)(1)(B) does not exist in isolation in the Bankruptcy Code,” but rather “appears in five other places in the Code, none of which define it, and only one of which refers back to the definition of ‘disposable income” provided in [§ ] 1325(b)(2).” In re Slusher, 359 B.R. at 297. “Congress’ choice to use both ‘projected disposable income’ and ‘disposable income’ in the Code indicates an intent to apply different meanings to the two terms.” Id.
. See In re Kibbe, 361 B.R. at 307 n. 5 (“While Schedule I was the main reference for determining a debtor’s income, other evidence, such as the testimony of the debtor, was considered in the event that the court believed Schedule I to be an inaccurate predictor of future income.”); In re Pak, 357 B.R. at 553 (“Commonly, pre-BAPCPA, chapter 13 debtors anticipated changes in their financial circumstances during the term of the plan and structured their proposed payments accordingly. Alternatively, when debtors’ proposed payments did not reflect anticipated increases in income or diminished expenses during the term of the plan, the chapter 13 trustee or a creditor objected to the plan as not contributing all of the debt- or’s disposable income to the plan.”).
. See In re McGuire, 342 B.R. at 614 (interpreting the phrase “projected disposable income” by referencing pre-BAPCPA case law because “[t]he BAPCPA amendments do not appear to change that holding”).
. “Statutory construction . . . is a holistic endeavor,”
United Savings v. Timbers of Inwood Forest, Ltd.,
484 U.S. 365, 371, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988), as the Supreme Court noted recently in interpreting certain language found in
. See also Conrad K. Cyr, The Chapter 13 “Good Faith” Tempest: An Analysis and Proposal for Change, 55 Am. Bankr.L.J. 271, 272-73 (Summer 1981) (“The controversy concerning the chapter 13 ‘good faith’ test has resulted in more litigation than any other issue to arise since the enactment of the Bankruptcy Code.”).
. I am not familiar with any authority casting
. Even those courts following
Alexander
admit that the
Jass
and
Hardacre
approach does a much better job of effectuating the purpose behind the creation
. In the case of expenses, but not in the case of income, it was necessary for
A debtor’s current monthly income is based on the debtor’s actual income (less certain excluded types of income) over a six-month period. Consequently, the only “special circumstances” that could lead to “adjustments of current monthly income” would be those circumstances rendering the debtor’s actual current income at variance from the six-month average of the debtor‘s income. These circumstances would be included in any forecast of the debtor’s monthly income, eliminating the need for any reference to
In contrast, the debtor‘s calculation of monthly expenses is not a tally of the debtor’s actual expenses, nor does it reflect the expenditures made by the debtor in the past. Rather, expenses are calculated in large part based on the figures set forth in the IRS’s Local and National Standards “as in effect on the date of the order for relief.”
. “The income required to be reported on Schedule I is different from ‘current monthly income’ as defined in
. Schedule I can still serve as a starting point for determining a debtor‘s projected monthly income, but it will not always be dispositive, for the debtor‘s projected monthly income “shall not include types of income excluded from ‘current monthly income’ by
.Obviously, I cannot follow the methodology of
. See In re Fuller, 346 B.R. at 484 (“Unless, then, the IRS standards change, or unless the debtor’s state of residence . . . or household size change, an above-median income debt- or’s expenses are going to be exactly the same for every one of the six months leading up to the filing of the bankruptcy. Absent those two changes in condition . . . in the future, the above-median income debtor[’]s prospective expenses will be exactly the same as her historical expenses.” (Emphasis in original)).
. My adherence to the methodology set forth in
. The potential for abuse of the chapter 13 process exists regardless of whether one favors the interpretation of
.
See In re Farrar-Johnson,
353 B.R. at 231-32 (“The disposable income a debtor decides to commit to his plan is not the measure of his good faith in proposing the plan.”);
In re Alexander,
344 B.R. at 752 (“So long as the debtor calculates the projected disposable income with specific reference to the new definition of disposable income and commits that projected disposable income to pay unsecured creditors for the applicable commitment period, she is in good faith compliance with the Code.”);
In re Barr,
341 B.R. at 186 (“the debtor’s ability to pay and whether the proposed plan commits all of the debtor’s dispos
able income must be determined under
. On the other hand, a debtor who elects to live in modest housing (relative to the typical debtor of similar means) ought not be punished for how he elects to devote his resources. See In re McGillis, 370 B.R. at 751-52 (“I see no reason why a debtor could not choose a lifestyle more frugal than the one dictated by a ‘good faith’ budget and pocket those savings without running afoul of [§ ] 1325(a)(3).”). Only a debtor filing a plan that is so manifestly unfair to unsecured creditors as to indicate a subjective intent by the debtor not to sincerely and honestly attempt to repay his debts would be rejected on grounds of bad faith.
. Both
Goeb
and
Barnes
hold that there is no minimal payment requirement implicit in
.
See
n. 27,
supra.
Illustratively, the trustee conceivably could argue in this case that the debtor’s plan is filed in bad faith because the debtor could reduce those expenses that actually exceed the values set forth in the Local Standards and then apply the difference between her actual housing expense and the Local Standards expense towards her plan. But this takes things one step too far, for “to sit as a [cjhapter 13 [jludge against the backdrop of the panoply of [] forces that shape debtors’ choices does not permit the [jjudge to substitute his or her value judgments for those of the debtor.”
In re LaSota,
351 B.R. at 61. “All that [§ ] 1325(a)(3) requires is that the debtor justify that what he has proposed to keep for himself vis-á-vis what he proposes to pay his creditors under his plan is a fair allocation under the circumstances.”
In re McGillis,
370 B.R. at 749-51. Moreover, the question is not whether a debtor’s proposed scheme of payments is fair to creditors in an objective sense, but whether the debtor
intends
to deal with his creditors in an equitable fashion.
See id.
at 748-49 (describing