DocketNumber: No. 08-15944-WCH
Citation Numbers: 483 B.R. 276
Judges: Hillman
Filed Date: 11/28/2012
Status: Precedential
Modified Date: 11/22/2022
MEMORANDUM OF DECISION
I. INTRODUCTION
The matter before the Court is the “Motion of Chapter 13 Trustee For Order Dismissing Case” (the “Motion to Dismiss”) filed by Carolyn Bankowski (the “Trustee”), the Chapter 13 trustee, and the
II. BACKGROUND
The Debtors filed a joint Chapter 13 petition on August 8, 2008. On August 20, 2008, they filed their Chapter 13 Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income (“Form 22C”) which reflected that they were above-median income debtors with an applicable commitment period of five years pursuant to 11 U.S.C. § 1325(b)(4)(A)(ii). At no point have the Debtors have sought to amend Form 22C.
To date, the Debtors have filed four Chapter 13 plans. Their first two plans, filed on August 20, 2008, and October 28, 2008, respectively, provided for a term of sixty months, but indicated that the Debtors were proposing this term pursuant to 11 U.S.C. § 1322(d)(2), rather than 11 U.S.C. § 1325(b)(4)(A)(ii), because they had insufficient income to fund a shorter plan. Both of these plans proposed to treat Countrywide Home Loans, Inc. (“Countrywide”), the then holder of a note secured by a first mortgage on their principal residence, as a secured creditor and cure the prepetition mortgage payment arrears through the plan while maintaining post-petition payments outside of the plan. Additionally, both plans contemplated no dividend to general unsecured creditors. No objections to the First Amended Chapter 13 Plan were filed and, on January 5, 2009, the Trustee submitted a proposed order confirming the plan to the Court.
At the request of the Debtors, however, the First Amended Chapter 13 Plan was not confirmed.
Three days after the commencement of the Adversary Proceeding, the Debtors filed amendments to various schedules and a Second Amended Chapter 13 Plan, the purpose of which was to reflect Countrywide’s new status as an unsecured creditor on account of the purported rescission. In addition to reclassifying Countrywide as a general unsecured creditor, the Debtors increased the dividend to general unse
The Debtors filed a response to the Trustee’s objection to confirmation on March 23, 2009, and a supplemental response on April 6, 2009. In summary, they argued that Form 22C was improperly prepared and that they were not, in fact, above-median income debtors. In support, they cited flaws in the means test contained within Form 22C and changed circumstances since the petition date that they asserted should dictate the confirma-bility of any plan. On April 22, 2009, the day before the Trustee’s objection to confirmation was scheduled to be heard, the Trustee withdrew her objection to confirmation without explanation.
On September 27, 2010, the Debtors filed the Third Amended Chapter 13 Plan (the “Third Amended Plan”). The Third Amended Plan provided for a term of thirty-six months and a total cost of $22,501.00.
On September 27, 2011, after a full trial on the merits, I entered judgment in favor of the Debtors on both counts of their complaint and held, inter alia, that Countrywide holds an a general unsecured claim and is appropriately treated as such under the Third Amended Plan.
III. DISCUSSION
“Section 1307(c) of the Bankruptcy Code provides that, on request by a party-in-interest and after notice and a hearing, the court, for cause, may dismiss a case under Chapter 13 or convert the case to Chapter 7, whichever is in the best interest of the creditors and the estate.”
That said, the current procedural posture is awkward. The Trustee did not file a timely objection to the confirmation of the Third Amended Plan and there are no other objections pending.
The Trustee misreads my decision
Reduced to its core, In re Filion stands for the unremarkable proposition that the completion of payments under a confirmed Chapter 13 plan has, in addition to a monetary component, a temporal component; namely, the term of the confirmed plan, which in most cases, as it was in In re Filion, is the applicable commitment period.
The present case is distinguishable from In re Filion for several reasons. First, the Third Amended Plan has not been confirmed. Second, unlike the debtors in In re Filion, the Debtors have completed both the monetary and temporal obligations imposed by the Third Amended Plan. Third, they are not trying to sidestep a meritorious objection made pursuant to 11 U.S.C. § 1325(b)(1)(B) by resorting to an improper procedure. To the contrary, the Debtors are following the standard confirmation procedures and, despite the opportunity, neither the Trustee nor any holder of an allowed unsecured claim raised such an objection to the Third Amended Plan.
Because In re Filion does not preclude confirmation of the Third Amended Plan, there does not appear to be any impediment to confirmation. If, however, the
IV. CONCLUSION
In light of the foregoing, I will enter an order directing the Trustee to, within fourteen days, either file an objection to the confirmation of the Third Amended Plan accompanied by a motion to file such objection to confirmation late, or withdraw the Motion to Dismiss and submit a proposed confirmation order, failing which the Motion to Dismiss will be denied.
. Due to clerical error, an order confirming the First Amended Chapter 13 Plan entered on February 6, 2009, but was vacated on February 9, 2009.
. Mass. Gen. Laws ch. 140D, § 1 et seq.
. Though not critical to understanding the issue now before me, I note that, by way of clarification, each of the Debtors’ proposed plans provided for a radically different monthly payment.
. Cromwell v. Countrywide Home Loans, Inc. (In re Cromwell), 461 B.R. 99 (Bankr.D.Mass. 2011) aff'd in part, rev’d in part and remanded sub nom. Cromwell v. Countrywide Home Loans, Inc., 483 B.R. 36, 2012 WL 4127910 (D.Mass.2012).
.Cromwell v. Countrywide Home Loans, Inc., 483 B.R. at 49, 2012 WL 4127910, at *12.
. In re Filion, 452 B.R. 329 (Bankr.D.Mass. 2011). See 11 U.S.C. § 1307(c).
. Torres Martinez v. Rivera Arce (In re Torres Martinez), 397 B.R. 158, 166 (1st Cir. BAP 2008).
. Id.; In re Earl, 140 B.R. 728, 733 (Bankr.N.D.Ind.1992).
. 11 U.S.C. § 1307(c)(3), (5).
. See Massachusetts Local Bankruptcy Rule ("MLBR”) 13-8(a) (“Unless otherwise ordered by the Court, any objection to confirmation of a chapter 13 plan shall be filed on or before ... thirty (30) days after the service of an amended or modified plan.”).
.Section 1325(b)(1) provides in relevant part:
If the trustee or the holder of an allowed unsecured claim objects to the confirmation of the plan, then the court may not approve the plan unless, as of the effective date of the plan—
(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)(B).
. The Trustee's confusion may arise from one sentence of my discussion that states: "Section 1325(b)(1) now provides that a Chapter 13 plan may be confirmed only if it provides for either (1) full payment of all unsecured claims or (2) 'that all of the debt- or'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.' " In re Filion, 452 B.R. at 331. This sentence omits reference to the prerequisite that "the trustee or the holder of an allowed unsecured claim objects,” 11 U.S.C. § 1325(b)(1), because, with an emphasis on the word "now,” I was comparing the pre-Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA”), Pub.L. No. 109-8, 119 Sat. 23, 11 U.S.C. § 101 et seq., language of 11 U.S.C. § 1325(b)(1) as quoted in the prior sentences to the amended language as it appears in that sentence. See In re Filion, 452 B.R. at 331. I clarify now that the Court cannot raise an objection pursuant to 11 U.S.C. § 1325(b)(1)(B) sua sponte.
. In re Filion, 452 B.R. at 330.
. Id.
. Id. at 334-335.
. Id. at 332.
. Id. at 334.
. Id. at 334-335.
. For this reason, I need not reach, or even discuss, the various defenses raised by the Debtors.