then you get five through but yes you're ok what we have here today is a case of first impression for this court the bankruptcy abuse prevention and consumer protection act which was recently enacted by case in the bankruptcy appellate panel in the first circuit but other than that it's all been in the district in the you know in the bankruptcy courts themselves that and then deciding these issues if you know issues today are how long was the debtor propose a chapter let me hear every word i remember best record the two issues again are concerning section thirteen twenty five b five b whether the councilmen projected disposable income has changed so that whether the debt or indeed has any disposable income after necessary expenses is no longer relevant if in the calculation under the form which i think is b twenty two there is no project income and this lady is a nurse and she owns about seventy one thousand dollars he used to she is above a median debtor and calculated on the form let's see who got the facts straight calculated pursuant to thirteen you have to pay a dime if you don't have any projected disposable income that's her position i guess you are what's wrong with that well just decided to change the concept of disposable income from cash this at the end of the month to this hypothetical the twenty two calculation if we respect congress is well intentioned in doing there why don't we just you first have to determine what the c m i it is the current monthly income over six months yes you do your honor isn't that the number which used to be multiplied over the period of time the current monthly income is your projected disposable income over the period of the project which is the period of time that the other have to pay off pursui income that was ben received as wages it's also additional income that is regularly paid to the debt or from other sources the disposable income however is an entirely separate category which is contained in thirteen twenty five just postal income is the current monthly income less the expenses from the internal revenue service national standards local standards other necessary expenses seen on current monthly you calculate the gross figure for projected disposable income the adjustments under the internal revenue service to give you the net figure projected disposable income correct well the current monthly income mult multiplied into an annual basis provides a basis for determining the apical commitment period in other words the duration of the plan it's the current monthly current monthly income to what that person is actually going to receive over the period of time in order to arrive a disposable income exactly we believe that the project leader she's got an aunt who's a millionaire and is about to die and is going to leave her a big fortune you want to take that into consideration well that big fortune that that would be some future event that we weren't really consider if she wouldn't get any heritance that would be something that would be properly just something oceanside an annuity which would kick in  of the program well the definition of current monthly income and again these different definitions of her monthly income and disposable income and projected disposable income per month low income does include regular sources of income paid to the de on a regular basis the projected the inclusion of projected in front of just posable income indicates congress does intend that a debtor who can pay be required to pay over that duration of the plan which in this case  over median income the apple commitment period should be sixteen months congress rather should have been aware that this negative number could have occurred on a mechanical backwards looking determination of what disposable as far as the trustee argument yes she does because she has projected disposable income looking forward that can be paid to unsecured creditors especially when wired when you're looking for what you're looking for we're looking at  starting with the disposable income on form twenty two c we're looking at pay stubs we're looking at tax returns we're looking at other sources of income that are available to the debtor that might be coming in and particularly i and i  five b and there are three different camps out there in the lower courts on how properly to construe the statute but i think the one thing that that sort of says on it quickly is that hesitate to use the word sloppy but it seems the statute is not crystal clear that the trustees of the united states trustees or the government's interest in this case is through the rule of law announced leaves flexibility for banks the courts for district construction of the statute in light of the text itself and also in light of the history of the legislation our position is formed twenty two there's no doubt the congress intended the form twenty two calculation as a sort of back of the  that people were using their credit card that was that was one of the underlying reasons for a battle of the very indeed indeed ron and most of the most of the significant back the change occur in the chapter seven context most notably for this case in the seven zero seven b two a and b definition of expenses and then congress sort of took a crack at a new way to handle these calculations and provided as i like think about it a sort to rebut the presumption that form twenty two correctly calculates project the disposable income by and using evidence showing what the actual disposable income is period i know that i think you're absolutely when you express something once and you don't say anything different that is everything you meant to express respect we judge that's i think where we would part company the there's no question that the statute embodies the definition of bankruptcy courts own words show me how this form twenty two c calculation doesn't bear any relationship to what's actually going on so for you know for twenty four hours or you're for whatever but one time the order survives will go to twenty two c calculation then will abandon it we don't think there's any reason to construe the statute to do that in light of again those those those textual arguments that talks about the projection of disposable income to be received and that and then it contemplates that that will be applied project not only temporal substance how long that's going to take but also the possibility of the circumstances change during that time period that you project a period of time and you project well circumstances might be during the through time i don't know if i put it exactly that way i think it's clear the the overarching provision contemplates coming out some seem an unlikely situation at all chapter thirteen better who has a relatively substantial income loses that job the day before the day after they filed a petition and the six month historical calculation would reflect that income so that the proper number to be paid out under thirteen twenty five b under the doctor's interpretation would include that income well there's just no sense that number or whatever the bank's court says whatever form twenty to thirty shows that number bolsters the united states position here because it seems you know ironic and unfortunate to go to mexico or to say we have to live with a number today that we can change tomorrow because we know we can change it and the key thing here is we're not in the situation where we requirements in order to be able to pass a plan in order to certify a plan so under our construction the statute thirty twenty nine is not a sufficient answer because the plane would never be number bears no relationship to the actuality before the court within twenty six clearly way to go our own our point is a narrow one our point is that they're there and these are sort of hypotheticals we try to address and in in our brief to the court there and this is this is wise to return to the fact is that it was perhaps a little sloppy there is no doubt that there are cases where the twenty two c number produced will be nonsensical it will have no bearing on on which on the funds that will actually be received and the funds that will actually be paid proposition you know in as much as this court is again the first circuit court to address the issue and we think that's the best way to give meaning to the point text of the of the statute and context of the larger banks the enterprise and the equitable nature of there's more to this thousand dollars a month being paid going to one secured creditors and the instant case the debtor is paying a price from ten thousand dollars to on secured creditors however the coach sets a minimum this better eighteen month period and in future cases that is the tack that we make but you willing to stand by their offer yes we are going is it your position that that thing disposable income is strictly congress place the thirteen twenty five b to exactly what this foldable income was that is current monthly income the historical number less certain reasonable expenses also comes from if we take a look at code section eleven twenty hundred fifteen chapter eleven individual reorganization congress specifically said in defining projected disposable income as the same as disposable income from section thirteen twenty five b two so this is the second place where congress is saying we have the same term in two separate sections of the bankruptcy code and therefore they should be given equivalent weight we also know that  i believe we started to the culhane and white article that congress knew with attentional problem for using this historical income and that and that information was provided to congress by chapter thirteen trustee despite having that knowledge congress still went forward using the historical perspective congress has a right to choose its format for going forward bankruptcy's it chose to take this historical number as the best determination of wanted debt or could do in the future we used to have the actual or current income of a debtor and that was never that was presumed to be what the debtor would receive in the may be used in certain circumstances for a modification of a plan schedule i certainly comes into play schedule j four and above median that are does not come into play unless until we are looking at a modification of the plan schedule j and part of schedule i may come into play where we have a daughter who is below the median income so there are still applicable but certainly in  firming a chapter thirteen plan initially schedule i schedule j are excluded they are not used it's also important to understand that schedule i include certain income that congress specifically excluded as income in bankruptcy matters such as social security income section one hundred one ten and the fine incur monthly income specifically excludes that income so we should not use i f we take a position that schedules i and j should be utilized for confirmation purposes we are now including that income exactly what congress did not want to do is that what the that as a plan payment whereas a code specifically states that the thirteen twenty five b two has no bearing upon plan funding itself thirteen point five b deals with payments to only two unsecured creditors so if we were to take a position where i and j was used for confirmation purposes then all the money that a debtor might have on i and j which we can call actual income or current income would then be used to pay unsecured creditors under the plan leaving absolutely no money left over could be shown that there was a projected disposable income more than a dollar and you'd have to pay out in sixty minutes no i did not hear on the now we're going to a situation we're talking about plan duration plan duration is only discussed in the bankruptcy code under chapter thirteen of section thirteen twenty two d where for and of above median income debtor the code states that the maximum duration of a plan of the maximum period of the plan will be five years the term applicable commitment period before for an above median debtor is defined as not less than five years so your c you saying it doesn't have to be that just anything below five years that's correct your honor that is our position the term itself applicable commitment period is defined as not less than five years by replacing the term applicable commitment period searching twenty five b with its definition five years the word period or duration old longer exist in that statu in addition because all we're trying to do is we're not determining what funding of this plan will be we're only determining how much we're going to pay to the unsecured creditors in this plan there's nowhere in the  that i can use any of this income that i may have an excess of my disposable income to pay these creditors in a shorter period of time then five years we also have to look at a situation where whose interest is best served by making apples met in period a multiplier or a temple provision since we're only talking about funding  secured creditors the time value of money concept dictates that the creditor would rather receive their money in ten months than in sixteen months if that's the case most assuredly unsecured creditors should not want applicable commitment period to be a temporal provision they will receive less the value of the money they will receive the same dollar but they will not receive the same value the receive a else so long as the plan is funded correctly section thirteen twenty two d dictates thirteen point two rather egg states that the debtor can will use their future income or earnings to fund the plan for modifying a plan so if a debtor's income hasn't changed and it's very important to know and in deference to the united states position of the united states and its brief stated that the debtor c m i position is approximately sixty eight hundred dollars per month yet there i enjoy a income was only four thousand dollars a month that is very disingenuous argument for this course because now you are comparing the debtors gross income under for c m i first of debtors net income if we look at the bottom of the debtors gross income last taxes and insurance so if we were to look at the debtors gross income on schedule i would be of the plan there is a change and let's remember it's it is not just the trustee or an unsecured credit or who can come in and say this debtor now has more income let's modify the plan that same provision works for a debtor who comes and says well i lost my job i've been looking for a new job for a period of time i can't find one or i found one with a significantly lower income the debtor can also come in to modify their plan lol but this is given incentive to your client not to seek a frustrate my clients ability to move forward with their lives because it would be our position that the change that we're modifying to is a change from where we were to where we are so  has an additional three hundred dollars worth of monthly excess income first of all how much of that three hundred dollars is based upon income how much of that three hundred dollars is based upon a change in living style maybe my daughter has decided i lost my job i'm not going to live in this apartment anymore it cost me five hundred dollars a month i'm going to move to three hundred dollars a month apart so the modification punish the debtor who is trying to move forward by decreasing their expenses we believe that the change that any change would be based upon an increase in there's income the bankruptcy roll in the confirmation process is to verify that the debtor's disposable income amount is correct trustees may obviously object to a certain expenses not all expenses listed on the twenty two form are based soley on the debtors internal revenue service number of things such as transportation and things such as living expenses course we have debtors taxes coming out of paychecks folks that are debtors who are participating in retirement plans and things of that nature that a trustee or a judge may review based upon a trustees objection when we receive our trustees recommendations in chapter thirteen plans at least in my plans i'm quite often required to prove up every single number that is on congress intended to remove the discretion from the judge and that's what they've accomplished by coming up with a formula and decide that that formula is what is going to stand as stated earlier congress  presents that project that means to project over a twelve month period or to annualize that is disposable income so that the period that we're talking about is the same as five years or three told over three years four years five years the judge will confirm a plan if the numbers are appropriate such that the unsecured creditors are being paid the specific dollar amount within the term of the get four years i don't believe that a judge would have that kind of discretion at this point time if my clan funds in thirty six months everyone that needs to be paid i don't believe a judge can arbitrarily say this will be giving the judge discretion you need to pay longer and if the judge did have the authority to say you could pay longer then i would have the authority to pay less if that's what the statutes that creditors this form is exactly what congress intended for us to use i'm asking that you approve the code based on how it's written and not necessarily that we approve of the court of from oregon in the morn case said chapter thirteen is not alternate universe where reality dare not intrude and what we have here your honour's is a statute that's been amended by congress in an attempt to have debtors who have the ability to pay pay they did that by including a applicable commitment period of sixteen months or five years for debtors who were over a median income debtors and in order to fund a sixty month plan they included this idea of disposable income as a starting point a floor not a ceiling but a floor is a courts and richer regarding what  projected amount would be they understood that this disposable income definition contained in the statute would in fact possibly cause them problems and they did that in order to resolve that possibility of that issue they retained the prior bankruptcy code version projected disposable income again i want to stress to the court that projected disposable income and disposable income  not the same things if we were to accept the debtors position we might as well strike that projected word right out of the code because their version gives it absolutely no meaning the trustee simply says that the number on form twenty two c the disposable income calculated backward looking formula is a starting point it is certainly not the end all be all of what he did as planned payment would be or what should be contributed over the required duration of a plan of sixteen months in fact the the council mentioned section thirteen twenty two d which says that a chapter thirteen plan  shall not be more than five years thirteen twenty five before says the plan for an over median income shall not be less than five years well if it planned can't be more than five years and it can't be less than five years there seems to me only one logical conclusion and that is it must be five years and if a debtor has a negative disposable income number on form twenty two yet they are required to be in any plan for five years congress has resolved that issue by including projected disposable income not simply disposable income but projected disposable income which is required to be paid into the plan unfair that is the plain language of the statute your honor yes and yes indeed that is the plain language of the statute and in order to fund that plan we have to look at these other possible sources of income to determine what that a period of five years who wish to reopen the case on the thirteenth when we undergo change of income well your honor i would like to remind the quarter as i'm sure you're aware but we don't have an actual confirmed plan at this point t