In Re Devilliers
Reasons for Order Partially Sustaining Trustee’s Objections to Plan Confirmation
This matter came before the Court on the Objections to Confirmation filed by S.J. Beaulieu, Jr., the standing chapter 13 trustee, who avers that the debtors claim excessive deductions or expenses and that the plans do not contribute all disposable income. This Court initially heard the Objections during each debtor’s confirmation hearing, however, as the issues arose due to recent changes to the Bankruptcy Code and would affect the Chapter 13 bar as a whole, the confirmation hearings were continued to a special hearing at the request of all parties in order to address issues of common interest. Counsel and interested members of the bar were invited to brief and address the effect of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”) amendments on calculating disposable income and plan payments. After the special hearing was conducted on October 11, 2006, this Court took the cases under advisement, and after considering the briefs, arguments of counsеl, and the relevant law, makes the following findings of fact and conclusions of law. Jurisdiction
This Court has jurisdiction pursuant to
I. Facts
Joseph and Cheryl Chauvin (“Chauvins”) have above the median income for debtors residing in the state. On their Form B22C, the Chauvins have taken deductions for voluntary contributions to a qualified 401(k) retirement account and a deduction based on amounts allowed under the Internal Revenue Service guidelines
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(“IRS standard deduction”) for ownership expenses of a vehicle. The Chauvins vehicle is unencumbered. Additionally, the Chauvins claim an IRS standard ownership deduction on another vehicle encumbered by a debt that will be satisfied twenty-three months after confirmation. The Chauvins have also reduced their current monthly income based on the Internal Revenue Service (“IRS”) standard deduction for food, clothing and other miscellaneous items. The IRS standard deduction
Keith Devilliers and Angela Dominguez (“Devilliers”) have above the median income for debtors residing in the state. Initially, the Devilliers listed secured debt as a deduction from current monthly income on their Form B22C. In their proposed plan, the Devilliers committed all disposable income as calculated on Form B22C to the payment of claimants, including secured creditors. Trustee objected to the plan alleging that this allowed the Devilliers to “double dip” by deducting secured debt payments from current income and then making those payments from the residual disposable income obtained after deduction. At the hearing on this matter, the Devilliers voluntarily amended their plan to increase the proposed plan payment by the amount of secured debt installments. The Devilliers also claimed as an additional deduction, medical expenses. While they have supplied Trustee with support of historical medical expenses, Trustee maintains that documentary support must be supplied to prove necessity in the future.
John and Patricia Fretwell (“Fretwells”) also have above the mеdian income for debtors residing in the state. The Fret-wells have taken two IRS standard deductions for the ownership of two unencumbered vehicles. They have also excluded social security income from Form B22C. The Fretwells’ Form B22C claims medical expenses in the amount of $200 per month and reduces current monthly income for payroll taxes incurred on both social security and other income. The Fretwells have also reduced their current monthly income based on the IRS standard deduction for food, clothing and other miscellaneous items. The IRS standard deduction is greater than that reflected on schedule J for the same items. Trustee has objected to these deductions or exclusions as unnecessary and unreasonable.
Joy Piazza (“Piazza”) has above the median income for debtors residing in this state. On her Form B22C Piazza has also taken an IRS standard deduction for ownership on an unencumbered vehicle. Additionally, Piazza has claimed an IRS standard deduction for food, clothing and other miscellaneous items. The IRS standard deduction is greater than that reflected on schedule J for the same items. Prior to her bankruptcy filing, Piazza had not contributed to a qualified retirement account. As a result, her Form B22C does not include a deduction for contributions to a qualified retirement account. However, Piazza’s schedule I reflects a deduction for retirement contributions and her plan payment incorporates the same reduction. Trustee has objected to these deductions as unnecessary and unreasonable.
Antionette Guidry (“Guidry”) has below the median income for debtors residing in this state. On schedule I Guidry included, as a deduction from income, voluntary contributions to a qualified 401(k) retirement account. Trustee has objected to this deduction as unnecessary and unreasonable.
II. Projected Disposable Income
Trustee’s Objections require the Court to interpret § 1325(b)(l)’s directive that debtors commit all projected disposable income to pay claims under plans proposed for confirmation. An analysis of the issues always begins with the applicable statute.
Except as provided in subsection (b), the court shall confirm a plan [unless]—
(b)(1) ... the trustеe or the holder of an allowed unsecured claim objects tothe confirmation of the plan, then the court may not approve the plan unless, as of the effective date of the plan—
:¡; ;¡í ;1; :¡í
(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.
‡ % % * %
(2) for purposes of this subsection, the term “disposable income” means current monthly income received by the debtor ... less amounts reasonably necessary to be expended—
(A)(i) for the maintenance or support of the debtor or a dependent of the debtor, or for a domestic support obligation, that first becomes payable after the date the petition is filed;
if* ¡5* •!»
(3) Amounts reasonably necessary to be expended under paragraph (2) shall be determined in accordance with sub-paragraphs (A) and (B) of section 707(b)(2), if the debtor hаs current monthly income, when multiplied by 12, greater than—
(A) [ the state median income for a family of like size]
Thus the Court’s first task is to ascertain if, in accordance with
Section 707(b)(2)(h) explains that a debt- or’s monthly expenses shall be the applicable monthly expense amounts specified under the National Standards and Local Standards issued by the IRS for the area in which the debtor resides for five specified categories of expenses and debtor’s actual monthly expenses for “Other Necessary Expenses” as allowed by IRS guidelines. A few Congressionally sanctioned deductions are also authorized.
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Under
Section 707(b)(2) was substantially modified by the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”). The amendments incorporated a mechanical test designed to determine if a chapter 7 debtor could presumably repay unsecured claimants through a chapter 13 plan (commonly referred to as the “means test”). 4 The means test is historical in nature, utilizing both debtor’s income and expenditures over the six months preceding filing as a gauge of his ability to pay unsecured claimants post petition. If a chapter 7 debtor “fails” the means test, the burden shifts, and the debtor must overcome the presumption of abuse, dismiss his case, or agree to a conversion to chapter 13. Therefore, while the test itself is mechanical, its application is not. The calculations derived from the means test are only presumptive, not definitive, and may be modified by the existence of “special circumstance.” 5
By incorporating § 707(b)(2)’s means test into
A. Projected Versus Historical Disposable Income
As an initial matter, every above the median income debtor must file a Form B22C, along with schedules I and J, with the petition for relief.
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Form B22C arguably calculates a debtor’s disposable income after giving effect to the provisions of §§ 101(10A), 541(b)(7), 707(b)(2), 1322(f), and 1325(b)(2) and (3). The form is a compilation, in most cases, of the actual monthly income received and expenses incurred by the debtor for the six months preceding filing. Notably, certain expense categories are not included based on history, but national or local standards set by the IRS.
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The resultant calculation is an
Similarly, schedules I and J are based on a debtor’s historical income and expenditures. However, because schedules I and J do not utilize IRS standard deductions, but the actual amounts incurred by debtors at the time of filing, they are arguably a more accurate depiction of the level of expenditure “reasonably necessary” to support debtor and his dependents.
Additionally, while Form B22C requires debtors to report the average of income received and expenditures paid over a six month period preceding bankruptcy, schedules I and J focus on debtor’s current income and expenditures and are therefore less susceptible to historical anomalies. If fluctuations in income have preceded the filing, the income calculated by Form B22C will necessarily be a figure that is not reflective of the debtor’s actual income at confirmation. Similarly, prepetition increases or decreases in the level of expenditure will also affect the average expenditure levels deducted and the resultant disposable income provided by Form B22C. In either case, the calculation of disposable income on Form B22C will not be reflеctive of what, under previous law, the debtor might be expected to pay based on current circumstance.
To what extent a court should acknowledge this reality is a major source of disagreement. A handful of courts have taken the position that in calculating projected disposable income for confirmation, the figure derived by Form B22C, without adjustment for change or deviation brought by post petition events or prepetition fluctuations in income or expense, is utilized. Reasoning that BAPCPA installed a mechanical test devoid of discretion or even common sense, these courts refuse to modify the calculations derived from Form B22C regardless of result.
See, e.g., In re Barr,
Other jurists have reasoned that the calculation of “projected disposable income” differs from that of “disposable income” in that the term “projected” implies a forward, future thinking approach that necessitates consideration of not only the debtor’s past history but current circumstance and any anticipated future changes.
In re Edmunds,
The first of these rules requires the Court to give meaning and import to every word in a statute.
Negonsott v. Samuels,
The second rule of statutory interpretation is that the Court must presume that 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.,
The Bankruptcy Code embodies a flexible scheme for the reorganization of debt and the orchestration of a debtor’s fresh start. 9 Within its guidelines, debtors are required to make payments to claimants in exchange for which assets are retained and debts are discharged. No statute can anticipate every factual circumstance, and this Court does not believe that Congress intended to attempt such a feat. Instead it set forth a framework within which bankruptcy courts could operate, using a combination of historical and statistical data to derive the level of payment required to confirm a plan. To hold otherwise would create an unworkable system for both claimant and debtor alike.
The Court is required to interpret the statutes enacted in a way that will not lead to absurd results.
Lamie v. U.S. Trustee,
1) Applicable Expenditures
a. Are all Historically Generated Expenditures Deductible Post Petition?
Applying both the IRS framework of deductions and those created by Congress begins with the modifier found in § 707(b)(2)(ii)(I). Only
applicable
monthly expense amounts are deducted. Thus, only the types of expense allowed by the IRS and applicable to the specific debtor in question are deducted. This is in accord with
While some courts have held that every expenditure allowed by the IRS guidelines is available and appropriate for every debtor regardless of need, this Court does not read the applicable Code provisions so rigidly. The limitations of
b. Does
In enacting BAPCPA, Congress made certain policy choices regarding the determination of disposable income and allowed expenditures. For example, prior to BAPCPA, few courts would have considered repayments on loans taken from retirement accounts a “reasonable or necessary” expense. Yet under the amendments to
There appear to be other policy choices in the enactment of BAPCPA. Congress evidenced a preference for expenditures
A debtor that did not incur these expenses pre-petition does not claim them as deductions on Form B22C. As a historical record, Form B22C only reflects expenses incurred pre-petition. If rigidly applied, reference to Form B22C limits a debtor’s ability to deduct, post petition, expenses of a type typically allowed unless they were also incurred pre-petition. This is inconsistent with a finding that the expense is both reasonable and necessary if incurred pre-petition. Is the expense really unreasonable or unnecessary simply because it was first incurred post petition?
For example, a debtor without medical insurance pre-pеtition would not reflect a deduction for health insurance premiums on Form B22C. By defining disposable income in rigid and historical terms, no adjustment to projected disposable income could be made for a debtor that wished to acquire, post petition, medical insurance coverage. Nor could a debtor adjust Form B22C’s calculation of disposable income to reflect post petition realities, such as the necessity to support a parent recently disabled.
Historical levels of expense do not always reflect the amounts reasonably or necessarily designed to support the debtor and his dependants. Not only does a change in circumstance create the potential for a change in expenditures, but many debtors forego health insurance, repaying a retirement fund loan, and other “optional” expenditures prior to filing bankruptcy in an attempt to satisfy debt payments. If expenses are increasing, or income is decreasing, cuts in living expenses are the only viable means to close the gap. Debtors may scrimp on food or clothing, defer car or household maintenance, elect to forego medical treatment, and neglect to acquire or maintain health or life insurance. A debtor who deferred paying for any of these items would not include them as deductions on Form B22C. Under Trustee’s analysis, the debtor would also be subsequently barred from claiming the expenditure in any future determination of disposable income. Yet debtor’s pre-petition experience may have confined him to an unreasonable living condition, and it is that very condition from which the debtor may seek relief from the court.
For these reasons, debtor’s historical payments cannot be the sole basis for calculating future disposable income. Rather, the type of expenses allowed as deductions on Form B22C may be considered in the calculation of projected disposable income. It is not necessary that the debtor have actually incurred the expense pre-petition in order for it to be considered reasonable аnd necessary post petition. 15
Once a determination has been made as to the type of expenses allowed and applicable to the debtor, the expense is deducted from current monthly income based either on the actual amounts incurred or IRS standard deductions. As for the categories of expense deductible by reference to the IRS standard deductions, Trustee argues that the IRS standard deductions are only presumptively reasonable. As such, if Trustee can overcome the presumption of reasonableness and necessity, the amounts allowed can be reduced.
B. Actual Versus Estimated Expenditures
Trustee urges the Court to modify the calculations based on actual expenditures versus those provided by the IRS standard deductions. Trustee argues that the IRS standard deductions are more often than not greater than the actual expenditures of local debtors. As a result, Trustee urges the Court to further reduce the calculation of “projected disposable income” to account for the actual levels of expenditure for the categories estimated on Form B22C. In short, Trustee argues that schedules I and J should control over the IRS standard deductions, at least where schedules I and J reflect amounts lower than those provided by the IRS.
1) IRS Standard Deductions Versus Schedules I and J
Bankruptcy Rule 1007(b)(1) requires debtors to file schedules I and J, presumably an accurate reflection of their monthly income and expenses as of the petition date. Trustee argues that since schedule J is an up to date reflection оf the actual expenses incurred by debtors, it is a more appropriate guide of what is both reasonable and necessary for a debtor to support himself and his dependents than the IRS standard deductions. In essence, Trustee maintains that as long as the type of expense is one generally allowed under § 707(b)(2), the calculation of its appropriate level is best left to debtor’s actual experience rather than national or local averages.
At confirmation, the Court must “project” debtor’s future disposable income.
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As a projection, the calculation is far from certain and the Bankruptcy Code acknowledges that it may be wrong.
17
Prior to BAPCPA, the determination of disposable income was tied to debtor’s existing and actual expenses as set forth on schedule J. The practice was to use these figures as the best guess of future expenditures. But the expenses listed on schedule J are also only estimates of some expenses and
Rather than use schedule J, Congress has substituted a different method for predicting debtor’s anticipated level of expenditure. Instead of schedule J, Congress has directed the utilization of IRS standard deductions. 19 It remains to be seen if this yardstick proves more or less reliable, but there is at least one reason to utilize this method over the debtor’s actual and immediate historical experience. The IRS standard deductions provide a uniform and predictable standard for determining the appropriate level and deductibility of fluctuating and widely varying expenditures.
By utilizing the IRS standard deductions, Congress provided an objective starting point for the calculation of disposable income. Rather than utilize the debt- or’s experience, Congress standardized both the type and level of expense allowed for all debtors. To this extent, some of the discretion formerly enjoyed by the bankruptcy courts and chapter 13 trustees may have been circumscribed, but as explained below, that discretion is not completely or permanently lost.
IRS standard deductions provide a ceiling for the applicable expenditures. At least initially, they also supply a floor, providing predictability. The proper level of expenditure is no longer determined by applying a subjective standard of “reasonableness.” The trade off statutorily is that the level of deduction for common living expense categories leaves little room for individual circumstance. 20 Nevertheless, the results obtained through this objective process can not be dеscribed as absurd.
Since the projection of disposable income is at best an educated guess, the utilization of IRS standard deductions is just as good an indicator of future expense levels as any. Trustee is free to challenge the calculation of disposable income in the future if he believes the debtor’s actual experience, over a sustained and reasonable period of time, does not necessitate the full allowance claimed. However, the starting point for all debtors will be the IRS standard deductions regardless of their pre-petition experience.
a. Food, Clothing and Services, Personal Care Products and Services, and Miscellaneous Expenses
In calculating what expenses are reasonable and necessary for the support of a debtor and his family, Congress has instructed that the IRS standard deduction for food, clothing and services, household supplies, personal care products and services, and miscellaneous expenditures be utilized. 21 By so doing, Congress has established a threshold amount presumably reasonable under the statute.
Trustee argues that a debtor’s actual expenses are often substantially less than those allowed under the IRS standard deductions. As set forth above, the IRS standard deductions are the initial basis for calculating disposable income. If Trustee determines that, for a sustained period of time, a debtor’s actual post confirmation expenditures differ substantially from the IRS standard deductions, then Trustee may elect to challenge the calculation of disposable income under § 1329 as inclusive of unnecessary or unreasonable expenses.
b. Deductions for Transpojrtation, Ownership or Lease of a Vehicle
IRS standard deductions establish allowances for the costs associated with the acquisition or lease of a vehicle. 22 Additionally, a separate deduction is provided for the costs associated with the operation and maintenance of the vehicle, or if no vehicle exists, costs associated with other means of transportation. As with the standard allowance for food, сlothing and services, household supplies, personal care products and services, and miscellaneous expenditures, the IRS guideline is the starting point to determine the necessary and reasonable level of future expenditure for these categories of expense.
Assuming debtor has a vehicle or needs to avail himself of public transportation, operational expenses or those incurred for public transportation will be based on the IRS standard deduction. Although the allowance may not match the historical experience of the debtor, as explained above, history may not be indicative of actual need. A debtor may have deferred ordinary or extraordinary maintenance on his vehicle pre-petition in an effort to stave off bankruptcy. A vehicle’s age may make maintenance unpredictable, skewing the level of expense reflected on schedule J. Whatever the case, the IRS standard deduction supplies an objective allowance for this purpose. As previously notеd, if Trustee determines that, for a sustained period of time, the debtor’s actual post confirmation expenditures differ substan
As for the IRS standard deduction allowed for the costs associated acquiring ownership or leasing a vehicle, this deduction is only applicable if a debtor is actually paying for or leasing a vehicle. Unencumbered vehicles do not qualify for the deduction. Although this may discriminate against a debtor who has an unencumbered vehicle, Congress has elected to make this distinction. The deduction is not the equivalent of an allowance for depreciation or an invitation for a debtor to “save” for the ultimate replacement of an existing vehicle. Instead, the deduction is designed to assist with the acquisition of a vehicle on credit. 23
C. Deductions for Contributions to Qualified Retirement Plans
Contributions to qualified retirement plans are excluded from disposable income under § 541(b)(7). Section 541(b)(7) states:
[A]ny amount withheld by an employer from the wages of employees, or received by an employer from employees, for payment as contributions to—
(I) an employee benefit plan that is subject to title I of the Employee Retirement Income Security Act of 1974 or under an employee benefit plan which is a governmental plan under section 414(d) of the Internal Revenue Code of 1986;
(II) a deferred compensation plan under section 457 of the Internal Revenue Code of 1986; or
(III) a tax-deferred annuity under section 403(b) of the Internal Revenue Code of 1986.
Except that such amount under this sub-paragraph shall not constitute disposable income, as defined insection 1325(b)(2) .
Thus, mandatory or voluntary contributions to qualified retirement plans are not property of the estate, nor are they considered when calculating disposable income. 24 Trustee concedes that voluntary contributions to a qualified retirement account are not included in the calculation of disposable income. However, Trustee maintains that the Court may set the level of contributions allowed under a reasonable and necessary standard.
Section 541(b)(7) instructs that contributions to a qualified plan do not constitute disposable income for purposes of
Further, unlike the provisions of § 707(b)(2) and
The Code simply contains no requirement that contributions to a retirement account be “reasonable or necessary.” Perhaps more accurately, Congress has determined that contributions to a qualified retirement account are, by their very nature, reasonable and necessary. By providing for a debtor’s eventual retirement, retirement contributions become part of debtor’s fresh start.
D. Waiver of Necessary or Reasonable Expenditures
As previously acknowledged, many debtors will forego necessary and reasonable expenditures, pre-petition, in order to make ends meet. Post petition, debtors may waive their right to deduct certain expenditures entirely or at the levels allowed, in favor of increasing the amounts payable to claimants. While Congress has indicated that certain types of expense are reasonable and necessary, nothing in the BAPCPA amendments requires a debtor to take advantage of what Congress has offered. A debtor is free to reduce or forego any allowed deduction in order to confirm a plan. Similarly, a debt- or is always free to include exempt income as an additional contribution to make a plan feasible. While the inclusion of exempt assets or income is less of a concern to the Court than the waiver of allowed expenses, unless the resulting budget is so troubling that it casts doubt on a plan’s feasibility, the Court will leave it to the discretion of the debtor as to which expenses he elects to waive and at what level.
E. Social Security Income
Section 101(10A) provides that current monthly income is determined without reference to amounts collected from social security. Trustee argues that this places a significant stream of income beyond the reach of creditors. This is true. However, Congress, in plain and unambiguous language, specifically excluded social security benefits from current monthly income. The result is that they are also excluded in calculating disposable income. 25
Congress is presumed to know the effect of its acts.
See, e.g. Cannon v. University of Chicago,
Generally, an individual’s social security benefits are exempt from garnishment or seizure.
26
Despite federal exemption, pri- or to BAPCPA’s enactment, some bankruptcy courts held that social security income was to be included in the calculation of disposable income.
See, e.g., In re Hagel,
The exclusion of social security benefits from disposable income might appear counter intuitive at first. However, because creditors had no right to seize these benefits pre-petition, their exclusion from disposable income post petition is not a drastic change in a creditor’s position. Decisions regarding credit advances could not, or perhaps should not, have been based on the existence of social security income. As a result, their exclusion leaves creditors in no worse a position than existed pre-petition, with two important exceptions.
While the language of
Therefore, this Court holds that social security benefits are excluded from the calculation of projected disposable income under
F. Conclusion as to Issues Relating to Projected Disposable Income
The provisions of
III. Good Faith
Trustee also objects to confirmation of these plans on the ground that they аre not proposed in good faith as required by
Some courts have held that technical compliance with the provisions of
This Court finds that strict and technical compliance with the means test does not necessarily satisfy any debtors’ burden of good faith. Determining whether a plan is proposed in good faith requires an analysis of the totality of the circumstances.
Deans v. O’Donnell,
Having concluded that technical compliance with
IV. Ruling
Under the analysis set forth above, confirmation is denied for the plans proposed by the Chauvins, Devilliers, Fretwells, and Piazza. Specifically, because the Chauvins, Fretwells and Piazza claimed, in the calculation of projected disposable income, IRS standard ownership deductions for unencumbered vehicles, confirmation of their plans will be denied. The failure of the Devilliers to supply the Court with proof as to the reasonableness and necessity of future health care expenses they propose to deduct from current monthly income constitutes an additional ground for denying confirmation of their plan. Piazza has also failed to establish the reasonableness and necessity of
With regard to Trustee’s Objection to the deductions claimed by the Chauvins and Guidry for contributions to a qualified retirement account, to the extent the deductions are within the tax deferred limits of the Internal Revenue Code, they will be allowed and the Objection of the Trustee will be denied.
Separate Orders in accord with this Opinion will be entered.
Notes
. The debtors have calculated certain deductions from current monthly income on their Form B22Cs by utilizing the IRS National and Local standard deductions. Support for this position is claimed by reference to § 707(b)(2)(ii). For ease of reference, the applicable monthly expense amounts specified under the National Standards and Local Standards issued by the IRS for the area in which the debtor resides for five specified categories of living expenses will be referred to as "IRS standard deductions.”
.
(A) means the average monthly income from all sources that the debtor receives.......derived during the 6-month period [preceding the petition date]
(B) includes any amount paid by any entity other than the debtor ... on a regular basis for the household expenses of the debtor or debtor's dependents.. .but excludes benefits received under the Social Security Act, ...
. The five categories of living expenses for which National or Local Standards are calculated by the IRS are: food, clothing, household supplies, personal care, and miscellaneous expenses; utilities: housing charges; vehicle operation or public transportation expenses; and transportation ownership or lease expenses. "Other Necessary Expenses” considered by the IRS include life insurance, health care, educational expenses, dependent care, child care, court ordered support payments, job related involuntary deductions, accounting and legal fees, charitable contributions, secured debt payments, unsecured debt payments, taxes, telephone services, student loans, internet service expenses, and amounts necessary to repay federal tax loans. These expenses may or may not be allowed in the discretion of the IRS. Congress has also provided that a debtor’s monthly expenses may include reasonably necessary expenses incurred to maintain the safety of the debtor and his family from family violence as defined by section 309 of the Family Violence Prevention and Services Act, or other applicable Federal law. The debt- or's monthly expenses also include the actual administrative expenses of administering a chapter 13 plan for the district in which the debtor resides, up to an amount of 10 per
. Only debtors receiving income over the six months preceding bankruptcy in excess of their state’s median are required to comply with the means test.
. Section 707(b)(2)(B)(i).
. Bankruptcy Rule 1007(b)(l)(6).
. National or local standards, published by the IRS are utilized for food, clothing, household supplies, personal care, and miscellaneous expenses; utilities; housing charges including rent, mortgage payments, property taxes, maintenance charges, interest, parking, homeowner’s or renter’s insurance, and homeowner dues and condominium fees; vehicle operation or public transportation expenses, including, maintenance, fuel, state and local registration, required inspection fees, рarking fees, tolls, and driver's license charges; and transportation ownership or lease expenses including payments on debts secured by a vehicle and insurance.
. Additionally, the phrases "to be received in the applicable commitment period,” in 1325(b)(1)(b), and "to be expended,” in 1325(b)(2), signify future income and expenses. This adds support to the conclusion that Congress intended "projected disposable income” to be determined by looking at not only a debtor’s pre-petition financial situation, but by also looking at his or her current and anticipated income and expenses.
In re Edmunds,
.
See, e.g., Matter of Case,
. Additional deductions are found by reference to §§ 362(b)(19), 541(b)(7), 1322(f) and 1325(b)(2).
.
.
.
.
.All expenditures, except those utilizing the IRS standards, are subject to independent verification. Again, while historical levels of expenditure might prove instructive, the past is not always prologue for the future. Thus,
. UU.S.C.
. Section 1329 allows for modification of a plan should debtor’s disposable income prove to be more or less than that originally calculated at confirmation.
. For example, a debtor’s utility bill for July in New Orleans will vary widely from his bill in January yet the amount reflected on schedule J is what the debtor deems to be his current monthly utility expense. Some debt- or's use an average, others the most recent month's bill.
.
. In two of the five categories, the standard allowance may be modified at confirmation if debtor substantiates that his experience warrants an upward departure. The debtor’s monthly expenses may include an allowance for housing and utilities, in excess of the allowance specified by the local standards for housing and utilities issued by the IRS, based on actual expenses for home energy costs if such expenses are reasonable and necessary. It may also include, if demonstrably reasonable and necessary, an additional allowance for food and сlothing of up to 5 percent of the food and clothing allowance as specified by the national standards issued by the IRS.
See
.
. Under the IRS' standards, the lease or purchase payment, along with insurance charges, comprise the standard cost of acquiring or leasing a vehicle. Maintenance, fuel, state and local registration, inspections, parking fees, tolls, and driver’s license charges are included in the operational standard allowance. Pursuant to
. Debtors’ counsel have argued that wholly owned vehicles are more likely to require additional and substantial repairs not otherwise covered by the operation allowance. They maintain that the ownership deduction would be a viable means for deducting these additional costs and therefore should be allowed. The Court rejects this argument. If a vehicle routinely incurs repair or maintenance expenses exceeding those allowed under IRS standards, Congress seems to be favoring the purchase of a new car over the continued maintenance of the old.
. In four of the five cases considered, deductions for contributions to a qualified retirement account have been challenged by the Trustee. Three of the cases involve above the means test debtors and one concerns a below the means test debtor. Because the exclusion for qualified retirement contributions is not limited to above the means test debtors, but found as a general proposition under § 541, the Court can find no distinction in the availability of the deduction between above or below the means test debtors.
. The calculation of disposable or projected disposable income begins with current monthly income.
.
The right of any person to any future payment under this subchapter shall not be transferrable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this sub-chapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
. The Court presumes that these expenses has already been established as reasonable and necessary pre-petition charges if included on Form B22C. The only issue the Court addresses is debtor’s ability to claim the same expenditures and levels consistent with Form B22C in the calculation of projected disposable income.