In Re Dunford
FINDINGS OF FACT AND CONCLUSIONS OF LAW ON DEBTOR’S MOTION TO RESET CMI DATE AND TRUSTEE’S MOTION TO DISMISS
Debtor, Monica J. Dunford (“Dunford” or “Debtor”), filed her voluntary petition *491 for relief under Chapter 13 of the Bankruptcy Code on March 23, 2009 (“Petition Date”). The Debtor has moved under §§ lOl(lOAXii) and 521(a)(1)(B)(ii) of the Bankruptcy Code, Title 11 U.S.C. for an order to Waive the Requirement that she file Schedule I and delay the requirement that she file Form 22C, and for an Order Setting Alternative Date for Determining the Debtor’s Current Monthly Income (Docket Entry 9, “DE 9”) (the “Motion”). Chapter 13 Trustee Tom Vaughn (the “Trustee”) has opposed the Debtor’s Motion by his Answer to the Motion (DE 15) and Motion to Dismiss this case (“Motion to Dismiss”) (DE 16) (collectively, the “Response”). Debtor filed a Reply Brief (DE 19). Trustee did not file any briefing or legal argument either in support of his Response or in response to the Debtor’s Reply Brief.
The basic issue involves
Through oral stipulation of Debtor’s counsel and a representative of the Trustee on the record in open court, the parties waived the right to present any evidence. Rather, they each elected to stand on the facts alleged in their respective filings that were not denied. The following Findings of Undisputed and Undenied Facts and Conclusions of Law are made and will be entered based on the pleadings and record of proceedings. Pursuant thereto, by separate orders the Debtor’s Motion will be granted and the Trustee’s Motion to Dismiss will be denied.
FINDINGS OF UNDISPUTED AND UNDENIED FACT
1. Debtor filed a voluntary petition (“Petition”) for relief under Chapter 13 of the Bankruptcy Code on March 23, 2009 (the “Petition Date”).
2. In connection with filing her Petition, Debtor filed her schedules and other related documents which are required to be filed in connection with her Chapter 13 case, except for Schedule I — Current Income of Individual Debtor(s) (“Schedule I”) and Form 22C, Chapter 13 Debtor’s Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income (the “Means Test Form”).
3. On March 26, 2009, Debtor filed a motion to waive the requirement that she file Schedule I and delay the requirement to file the Means Test Form, and for an order setting an alternative date for determining the Debtor’s current monthly income (“CMI”).
4. Debtor filed her proposed Chapter 13 Plan on April 7, 2009 providing for an initial Plan period of 36 months with unsecured creditors to receive 5% of their claims. 1
*492 5. On April 10, 2009, the Trustee filed a Motion to Dismiss this case, asserting that the Debtor failed to comply with Rule 1007(c) Fed. R. Bankr.P. which required the Debtor to file her Schedule I and Means Test Form within 15 days of the Petition Date.
6. Since the Debtor’s case was filed in March 2009, the period which would normally be used pursuant to § 101(10A) to determine the Debtor’s CMI as defined by law would be the six-month period prior to her bankruptcy filing, from September 1, 2008 to February 28, 2009.
7. The Debtor was employed by Peri-dontics, Ltd. for a significant portion of this period. However, she lost her job in February 2009, and currently receives unemployment compensation.
8. Based on the six-month period preceding the Debtor’s filing for bankruptcy, line 2 of the Means Test Form would have to report as her monthly income $2,463, based on her former employment and salary which no longer exists. Line 7 of the Means Test Form would have to report $520 based on actual income from child support and alimony. Therefore, the total income on line 11 would be $2,983 per month even though she lost much of that income pre-bankruptcy.
9. Debtor requests that the Coui't determine her CMI as a six-month average of income earned during the period beginning on November 1, 2008 through April 30, 2009 (the “Revised Six Month Period”), that is about three months pre-bankruptcy and three months post-bankruptcy.
10. Under the proposed Revised Six Month Period, her Schedule I would reflect the following sources of monthly income: $520 on line 10 for child support and alimony, $1,690 for unemployment benefits and $463 on line 11 for food stamps. The total amount of income based upon the Revised Six Month Period would be $2,153.00 per month. This amount is $830 less per month than the amount that would be listed on the Means Test Form if based upon the pre-petition six month period. (See Finding No. 8).
11. Statements of fact contained in the following Conclusions of Law shall constitute additional Findings of Fact.
CONCLUSIONS OF LAW
The issues presented by the Debtor’s Motion concern certain revisions in the Bankruptcy Code that Congress implemented in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (often referred to by the acronym “BAPC-PA”) which amended the Bankruptcy Code, Title 11 U.S.C. 101 et seq. Pursuant to § 521(a)(l)(B)(ii), “unless the court orders otherwise,” one of the duties that an individual debtor must perform in bankruptcy is to complete and file a schedule of current income, otherwise known as Schedule l. 2 Schedule I provides information as to income that is ordinarily used within the guidelines under the Bankruptcy Code to determine the debtor’s Current Monthly Income (“CMI”), as defined by law. Specifically, § 521(a)(i )(B)(ii) works in conjunction with § 101(10A) 3 which defines a debtor’s CMI.
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CMI may be determined under that provision in one of two ways. If a debtor files a Schedule I, the CMI is “the average monthly income from all sources ... without regard to whether such income is taxable 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....”
However, the statute also specifies in the alternative that this requirement applies “unless the court orders otherwise,” a grant of discretion to the judge. As earlier noted, the Debtor’s Motion seeks relief from the requirement that she file a Schedule I and also requests an extension of time to file her Means Test Form. In regard to her pending request for an extension of time to file the Means Test Form, Bankruptcy
Debtor has not yet filed her Schedule I in conjunction with the relief she now
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seeks; rather than determine her income based upon the prescribed formula imposed in Schedule I under
BAPCPA amended § 521 of the Bankruptcy Code and also added
These concerns are not unusual in Chapter 13 cases, but have usually been dealt with by opinions resting on statutory interpretation of the provisions. Efforts at determining what is meant by apparently contrary provisions have produced many diverse opinions.
A Ninth Circuit opinion reads the setting of a six-month pre-bankruptcy period to be the conclusive basis for calculating disposable income under
One of our colleagues in this District has sought to “harmonize” the facially inconsistent provisions of
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None of those opinions cited above discussed or were asked to apply the statutory discretionary provisions sought to be applied here, or any other direct statutory support for the presumptive or harmonizing approach. Without relying on statutory authority for the reasoning and the discretion exercised, those opinions may be said to run contrary to the generally recognized intent of Congress in BAPCPA to limit some degree of discretion and judicial flexibility from the law.
See In re Farrar-Johnson,
Great respect is due to the foregoing-efforts at statutory construction to avoid harshness to results from lost income that endangers the future of many Americans seeking a fresh start in bankruptcy during the present economic recession. However, statutory analysis is not needed when the Congress placed specific tools in the statute giving discretion to the Bankruptcy Judge to deal with the contradictory provisions, tools relied on by Debtor’s Motion in this case. Indeed, it must be questioned whether principles of statutory consideration such as were addressed in the px*ior cited cases may be used at all when Congress has granted discretion over the subject in issue and circumscribed it by defining what it is and how it may be used. Discretion is granted to delay the filing of Schedule I and to reset the six-month period to compute CMI. That implies that such may be done for reasons and cause reasonably found to be appropriate. In light of the statutory scheme and expressed discretion, judicial power may not exist to create discretion from statutory analysis and to permit relief other than by the path expressly permitted by statute. The “duty of interpretation” may not arise in this situation.
See Caminetti v. United Staten,
The procedure sought to be used by Debtor here relies on the express statutory discretion that may be exercised. Resetting of the six-month period would be attractive to any debtor in a Chapter
13
case in which the debtor’s income dropped significantly during the six months preceding the commencement of the case.
In re Crink,
No. 08-10824C-7G,
Whether or not to grant Debtor’s Motion still turns on the standards of discretion that should apply to grant or deny it. There are only a few published decisions concerning requests to reset the six-month period, all of those issued by bankruptcy judges.
See, e.g., Hoff,
Applying this standard to the instant case, it appears that the Debtor’s Motion was filed in good faith and the totality of the circumstances warrant the use of the Revised Six Month Period rather than the six months preceding the Petition Date to determine the Debtor’s CMI. Shortly before filing her Petition, the Debtor lost her job. If she filed her Schedule I, it would have reflected her income for most of the six months before her job was lost. Therefore, her CMI computed on that income amount would be much larger than her actual, “real-time” monthly income earned after filing for bankruptcy. Given that her financial situation deteriorated significantly one month before the filing of her petition, cause does exist to determine her current monthly income under
The Trustee stated in his Response to Debtor’s Motion that he does not have knowledge concerning the Debtor’s employment history, and cannot judge the good faith nature of the Debtor’s Motion. That lack of knowledge at the time was based on his lack of opportunity at the time to discuss these matters with the Debtor or hold a creditor’s meeting under
In making this determination, it is further noted that the Bankruptcy Code provides some guidelines when discretion is
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exercised under
[S]ection 1324 mandates that a confirmation be held no later than 45 days after the date of the meeting of creditors. Rule 2003 [Fed. R. Bankr.P] provides that the meeting of creditors in a Chapter 13 case shall be called no later than 50 days after the order for relief. This means that if the meeting of creditors is scheduled and completed on the last permissible day, a confirmation hearing must be commenced within 95 days after the petition date. If the confirmation hearing is to be completed on that date, the determination of current income will have to be made no later than on the same day, in which event the applicable six-month period for determining CMI will be the six months preceding that date, i.e., three months preceding the petition date and the three months following the petition date. If either the meeting of creditors or the confirmation hearing is not completed on the date first scheduled and is completed at a later date, there is a possibility of a later date for determination of current income and confirmation.
Shelor,
CONCLUSION
Based on totality of the circumstances and the Debtor’s good faith request, April 30, 2009, rather than the Petition Date, shall be the date used to count back six months to compute the Debtor’s CMI.
Based on the foregoing, Debtor’s motion to excuse the filing of Schedule I will be granted. The Debtor shall prior to the next confirmation hearing date which is set for August 5, 2009 at 11:00 a.m., file her proposed documents providing a Schedule of Projected Monthly Income and Means Test Form. The six-month period therein for determining the Debtor’s CMI shall be November 1, 2008 through April 30, 2009. Upon approval of the Debtor’s proposed schedule and Means Test Form, the Trustee’s Motion to Dismiss will be denied.
Notes
. Neither party presented any argument regarding what the “applicable commitment period” under
. Section 521, in pertinent part, provides:
“(a) The debtor shall—
(1) file
(B) unless the court orders otherwise—
(ii) a schedule of current income and current expenditures.
(Emphasis added).
.
(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 *493 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 debtor files the schedule of current income required by section 521 (a)(l)(B)(ii); or
(ii) the date on which current — 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)(ii); 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 debtor'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.
(Emphasis supplied.)
.
(a) Except as provided in subsection (b), the court shall confirm a plan if
(3) the plan has been proposed in good faith and not by any means forbidden by law....