Hamilton v. Lanning, 130 S.Ct. 2464. A bankruptcy court has discretion to consider changes in a chapter 13 debtor’s income or expenses that are known or virtually certain at the time of confirmation of the plan for purposes of determining a debtor’s projected disposable income .
On June 7, 2010 the Supreme Court issued an opinion which clarifies the meaning of projected disposable income in chapter 13 cases. The court rejected the “mechanical approach” and adopted the “forward-looking approach” pursuant to which the Court may take into account other “known or virtually known certain information about the debtor’s future income or expenses.” The upshot of this case is that your chapter 13 lawyer will be able to incorporate into your plan, items that affect your disposable income going forward. Many Chapter 13 trustees and Courts were insisting on limiting the chapter 13 debtor to a payment based solely on the historical numbers in the means test. In my opinion the decision is a good one, and opens up all sorts of opportunity and flexibility to argue for lower chapter 13 payments, in appropriate cases. This can only benefit debtors and promote the ultimate goal of achieving a successful chapter 13 discharge.”
Copyright 2011, The Gauss Law Firm.