versus nancy wally good morning your honour's nancy wally i'm a stand chapter thirteen trustee in the northern district of georgia the bankruptcy code strives to bring a balance between the consumer debt or with financial relief and a fresh start while ensuring creditors receive payments that are equitable and debtors ability to pay in two thousand and eighteen over two hundred and ninety thousand chapter thirteen cases were filed in the united states of those fifty seven one thousand seven hundred and seventy dollars were filed the th circuit which far exceeds any other circuit each one of those cases have one or two debtors a trustee and creditors all of which are dependent upon the orders of the court being reliable and enforceable the issues before the court today go to the very heart of this and fundamental principles and this court's ruling will impact every chapter thirteen doubter every bankruptcy judge every trustee and every creditors and determine whether all parties can depend upon the orders of confirmation of the debtors plan as a binding contract and one that can be relied upon without continual litigation this reliance is essential if we want our system to be continued to be fair equable efficient and cost efficient to everyone involved if the bankruptcy court's ruling in this case is allowed to stand it means that there are thousands of chapter thirteen dollars cases with plans that are not binding the ruling by this court will be determinative if this  or now her personal representative will be required to pay her unsecured creditors as much as they would have received in a chapter seven dollars instead of a chapter thirteen had she filed a sub and this basic requirement of the code is one that must be met by all debtors in order to retain property modify claims and be allowed to pay creditors over time rather than have their assets liquidated immediately and for creditors to receive an immediate payment you said if we are for the bankruptcy courts order then no one can rely upon these plans as being final but they are in fact final unless modified by the court correct when you're under the in the the destro the bankruptcy courts opinion one of the issues that the court said of why the term of liquidation was not binding was because the court did not hear the matter because evidence was not found specifically on that term of the plan so in as i pointed out in my brief and in today the thousands of cases are filed in a bankruptcy court the way the system would work is the judges do not hear those cases if the parties typically it's the trustee work and many times creditors but if the issues are resolved by consent of the parties the trustee at the call of the calendar would recommend confirmation of the plant as what happened in this case and an order of confirmation  entered and there is no evidence taken on those matters and what the bankruptcy court judge said in this case is i didn't hear evidence on the matter of liquidation and because i didn't hear evidence on the matter of liquidation it is not final and it is not binding that opens up all the terms of a chapter thirteen plan to be open for continual litigation and as this court has found in in the th circuit in the supreme court we unsecured trustees debtors and creditors can rely on then when is a term binding if a if in this particular case the amount that was determined to be paid to meet the best interest of creditors t initially proposed by the debtor in their initial plan the trustee objected to that term of the plan stating that it did not meet the best interest of creditors house the objection to confirmation was initially withdrawn and so that term was a term that there was a meeting of the minds and there was an agreement and it was deemed made it to be binding once the order of confirmation was entered so in the  example if that is not the case there are many ways that valuation can happen in a chapter thirteen case there are many ways that liquidation can be determined because to meet the best interest of creditors test we do not have an actual sale the property all we have is  a hypothetical the quotation how you meet that hypothetical liquidation can happen in numerous ways the court used one analysis post confirmation both the debtor in the trustee has the exact same analysis pretty confirmation on the effective date of the plan which is confirmation which the supreme court has said in lanny and bullard so at the time of confirmation the if the b the agreement of what the hypothetical liquidation was at the time of confirmation can be undone later by the debtor by the trustee so for instance in this case property values increase so as the trustee you're not suggesting are you miss whaley that a chapter thirteen plan that would have to kind of effect can never be subsequently modified are you it's long as it falls within the required the answer isn't going to be modified under some circumstances it can be modified yes that it may be subsequently modified by a bankruptcy court order right yesterday so the only issue here if i have it right is whether or not there is a need to show change in circumstances before that modification made a car do i have that right yes i mean that's the basic questions but let's go back to the fact i don't i want you to help me with my the way i see it and then you can tell me our i've misunderstood everybody agrees on it seems to me where the split here is where the argument here is whether you can modify it without a showing of chang circumstances and your position like one of the circuits is no you have to show a change in circumstances the other side's position is there's nothing in the language that congress gave us  where my oh why should i read it in when congress didn't put it in there your honor i'm not asking this court to read anything into one thousand three hundred and twenty nine at the same time i'm asking this court not to read anything out he still can modify under some circumstances i want you to tell me why we should glom on to one thousand three hundred and twenty nine the additional requirement that you need to show a change in circumstance so your i one circuit has said you should three others have looks to the legislative history of one thousand three hundred and twenty nine which clearly i would only look to the history if i couldn't find an answer in the text but i think that the legislator would agree with that i would agree with that i do think that the legislative history th come back though to this particular case because there is not a post confirmation change or anything that would warrant the in just as this court found in re and i'm sorry and hope the acorn in that case the trustee she knew of the claim defect prior to confirmation and prior to the order be an inner so she could have raised it at the time of confirmation in this particular case the modification is based upon the debtors nique the debtor lowering the amount to be paid to the unsecured creditors in order to pay attorney fees those attorney fees were earned after the filing of the case and prior to confirmation that is an issue that could have been raised at the time of confirmation and as this court has found and ray bateman res judicata claim preclusion relates not only to every matter that was actually offered and received to sustain the demand but also every claim that had that could have and might have been presented going back to then this court's question about a change of circumstance under one thousand three hundred and twenty nine yes a change of circumcised it's hard for me to and i see that i'm out of time  it's hard to in vision a case where there's not a change of whether it's a factor or whether it is a prerequisite to file a modification one thousand three hundred and twenty nine is very broad  of what a debtor can modify post confirmation if there's not some limitation to that by showing a change of circumstance or a difference then it opens up every provision of the plan to be really litigated over and over and over but you are asking if you're saying it's a broad statute but it is very clear and its terms and you are asking us as a court to provide a limitation that congress has not provide is that a yes or a no i don't mean to be pressing you know yes because but one of the things i want to point out though is ha go had a post confirmation change in circumstance this case does not have my post confirmation change in circumstance there's nothing that happened post confirmation it except something that was known pre confirmation that could have been litigated at that time i would also like to just say to the court that even if you look to  plan after confirmation does not require showing of change financial circumstances as a threshold requirement for modification post conformation allowance of the attorney's fees claim in had been reset five dollars or six times and what happened was that once the adversary proceeding was resolved then all the roadblocks the confirmation which was scheduled for five days later on the front end right you didn't have to wait afterwards to come back and seek a modification or two hundred and twenty nine dollars and i didn't fully anticipate it or else we would know that there would be a fee whether it was eight dollars grand or four grand or whatever that there would be a fee that would have to be built into the calculus i would say yes that that that we knew that that i knew that that i would need to be paid for  order to allow payment of the priority claim and i want to emphasize that at the point at which the court post confirmation allowed the attorneys of eight thousand two hundred and ninety five dollars and twenty nine to put met modification of a plan due to change circumstance on the debt or unforeseen at the time of confirmation pressing unforseen was there anything unforseen the  only thing that would be on force well what was unforeseen was whether there was nothing unforeseen to me i knew that the application had to be filed and the attorney's fees had to be before correct and not not it could have been if the hearing date had been posted the confirmation hearing date had been postponed but there was only a four day ask the staff attorney for the chapter thirteen trustee if there is an agreement that the hearing can be reset and if there is no agreement then counsel has to keep coming down to the bank court at the confirmation hearing da there were multiple multiple resets of the confirmation hearing because each reset is a very short there's a lot of pressure to get this case confirmed there's money being held why should we not follow the view of the financial and the reason for that is to ensure that confirmation orders will be accorded the necessary degree of finality and preventing parties they are barred from seeking to modify the but i'm asking the question nevertheless judge marcus all answer that very simply with or a toward a rhetorical question why i prefer a question answer that helps me as i'm about to go into that  because the debtor's financial circumstances have absolutely nothing to do with the purpose of the modification period they're irrelevant so to impose some arbitrary standard is is totally absurd as i stand by my brief you might as well impose a requirement that the debtor had to be born on a tuesday that has nothing to do with with changing the way the funds to the pool of funds to unsecured creditors are going to be distributed nothing nothing whatsoever if the debtors income had gone up what difference would it make if it had gone down what difference does it make we weren't proposing to change the amount of the payment into the plan we weren't proposing to change the total amount to be paid into the plan we were simply proposing to do something that we could have done prepared taishan and that is alter the way that the funds would be distributed to a class less serious problem that would occur here if the court were to rule in the  trustees favor as the debtors could automatically automatically dismiss their chapter thirteen if they can to oppose confirmation modification and refile and propose the same terms that the debtor was seeking to  to to to modify to begin with and whose whose benefit is that for it's a burden on the court on the debt or on the debtors counsel and even the trustee so so  we can accomplish the very same thing if the court were to rule in favor of the trustee by dismissing the case and refiling it and there's nothing to stop you understand that if we rule in your favor the statute is not limited to the of the debtor to see modification this would also apply upon the request of the debtor the trustee or the holder of an allowed unsecured claim they also could se options both included modification period they both included modification one would be to modify to increase the planned payment and based on the trustees argument that modification wouldn't be allowed in this case the debtors on a fixed income her income was soley social see and her husband's income was social security and a pen and a small pension so there so based on the trustees argument there would be no ability whatsoever to pursue that st option of amending to increase the planned payment so that the case would pay out in the fall and the nd option was the option that we chose because the debtor didn't have a cha t so we chose the nd of the two odds that required modification but basically the chapter thirteen trustee is arguing in this case and in any case where something happens post petition that requires a change in distribution of funds to a specific class that case must be dismissed that is what the trustee is arguing in this case ms guillen's case had to be dismissed once the attorney's fees were allowed there is no issue as to whether or not the tourney speech should have been allowed the attorneys fees were allowed once they were allowed the trustees position is there was no option  requirements of the best interest of the credit best creditors was met and not not specifically what that number was it's not unusual for debtors to file bankruptcy  bad that i didn't pay my debt and i want to pay everybody every penny no one should make the mistake of assuming that the pool to unsecured creditors is is is the amount the amount as i would like to point out of few in response to counsel's comments st the unsecured creditors attorney fees being paid and a chapter thirteen dollars cannot be paid at the detriment of the  entitled to be paid as much as they would have been paid in a chapter seven that's an elementary requirement of chapter thirteen that under one thousand three hundred and twenty five dollars a which is required to be met under any modification under thirteen  a chapter seven they would not have been paid out of the liquidation funds available for the unsecured creditors so in this particular case not only do we not have a change of circumstance we also have a provision that's not extended their time an outside party could have paid attorney fees attorney fees could have been waited to the end the initial tourney fees in this case were higher then a customary chapter thirteen dollars which could have  objected to the fees and withdrew that objection based upon some of the work that the debtor attorney would be doing in this case but the debtors attorney did not act as a chapter seven in this case and within the liquidation analysis we allowed twenty two confirmation to add an hourly rate it did not have an hourly rate pre con from ancient i would like to see that i am short on time i do would like to just point out the voluntary dismissal if the debtor voluntarily dismisses this case a debtor has a right to do that of could be even higher it's not that the debtor can do anything they want because all we can just voluntarily dismiss and close in i would just like to say is this court and hopi acorn signed into bank house he said if a plan is not final to all it is not final as to any the finality and reliability and of course ability of the court's orders it's essential to our bankruptcy system and the justice system our good tradition system encourages parties to reach consensual agreements the bankruptcy system is dependent upon the parties working together especially in consumer cases where funds are finite if the bankruptcy court order is allowed to stand every case would need to be heard by a judge and for terms to be determined with hearing evidence that parties know that their final and binding this would be extremely costly to debtors into creditors trustees and creditors would even be find themselves in happen to object to confirmation to ensure that a term is binding and that there was a meeting of the minds and that the court found evidence as to that matter i don't believe that's what's required by the code and i don't believe it serves while there are exceptions to the binding effect this case does not meet one of those exceptions there are no change of circumstances and it's not a modifiable term i'm asking this court to overrule the bankruptcy court and up hold this circuit's longstanding tradition on race judicata in claim preclusion and that there's a change of circumstances a change of circumstance is