as well as the underlying legal question of whether bankruptcy court can enter an order modifying if they can see plans based on increased income as to the issue of finality the test is the stand alone test which is the chairman and whether the bankruptcy courts border result a discrete dispute within the bankruptcy case even if it did not resolve the bank of cicadas itself recently in full or versus blue hills bank supreme court addressed finality in the context of planned confirmation which is very similar to plan month occasion in the context of planned confirmation the supreme court stated that there are really three ways for hearing a confirmation to be concluded the plan could be approved which would be a final order the plan could be denied with leave to amend which the supreme court held was not a final order where the plan could be denied without need to amend which the previous court held would be a final order in play modification it's very similar in modification can be approved and comparatively would be a final order a modification could be supreme court doesn't reference dismissal of the case as part of finality however that portion of the opinion is in a playable in the context of plan modification under section thirteen zero seven dismissal of the plan with prejudice is cause can you move on to the this issue because i'm having a hard time understanding why we shouldn't dismiss this is so i guess the big question is in terms of the merits how would the default the debtors have already made all their payments and it's over five years well in the mesa case there was also not a state pending of the appeal and the bettors had paid the underlying plan off which was their entire argument in then you're sort of retroactive and you're operating under different rules is that how it works well the trustees request for modification was that the divident unsecured creditors be increased from approximately twenty two thousand five hundred to thirty eight thousand eight hundred and a little bit more because of the notice whether or not they have completed payments of the underlying plan doesn't impede effective relief in this case because if the denial of the modification is bake hated the trustees modification can still be granted  payments will not have been completed because the trustee was seeking that higher dividend and that's very much like mesa let me and let me ask you this if if the debtors had made a motion for downward modification then lost then appealed without seeking stay in the district court was ready to decide after the debtors who made all their payments and the five years were over would accord have authority to order relief for the debtors in that situation yes why i think that they would have to object if the notice of completion of payments was entered but again if that if it was reversed the deny them out of case was reversed and they wouldn't have completed payments under the plan any longer again the tester misses whether effective relief is still available so if they were to seek such an appeal and the modification was reversed then it could still be granted because their modification way to beat the plan that they propose the bankruptcy court should consider whether or not the modification should be granted we're asking for very similar relief rescue for this to be sent back to the district court on remand for the district court to consider whether there were any clear errors in the bank's court's decision and whether the bankruptcy court abus discretion the appellee has conceded that the overall review sought by the trustee whether or not a plan can be modified based on increased income that such a relief is available by the bankruptcy court and district otherwise for decades the unanimous national precedent has been well settled that section thirteen twenty nine a provides just cations for modification and that one of these unstated justification is an increase in income was the and it was amended to add a trustee as a party to be able to move to modify is to be able to seek an increase in the amount to generals could creditors under the under the theory of the bankruptcy court even if the debtor won the lottery and he couldn't change possibly it's not entirely clear the court has accepted that perhaps liquidation analysis still applies because that is listed as section thirteen twenty five eighty four which is applied by section thirteen twenty nine b some courts have looked at lottery winnings as income some have looked at them as  property so the court might accept lottery winnings as a source of increased payments but it certainly wouldn't accept an increase in income from which is in this case approximately seventy during the the income was seventy thousand from wages for the two thousand twelve taxable income was one hundred thirty two thousand sets of six thousand dollars increase we also we stipulated that at the time of what would have been the epicenter of hearing her income had increased by forty four hundred dollars per month the trustee only sought six hundred seventy dollars more per month or about fifteen percent of a substantial increase as the basis for the modification the bankruptcy court held that there's really no circumstances no matter how much income increases a motion granted there is no authority for such a such a motion it's going to be very difficult it's a three or five year period running moves the appeal and i think again back to believe is still available where  there has been no completion of payments there has been no discharge entered by the bankruptcy court in the bank this court is aware that the underlying plan has been paid this was actually the appeal of course but there was an order entered bed vacated the debtors wage order so that while this is being determined they don't consider to have money taken from their wages but they are on notice of what the trustee has requested his request to go to general on secured creditors so alternately if the trustees motion my fights granted they will have to find a way to come up with that money or whatever way to secure that the falls there is still a way for the general and the creditors to be given a benefit in this case even no more than two years after the motion modify was filed that they paid off the underlying plan and i just want to reiterate and mase other wasn't a stay of the been for one of two things either that this court dismissed the appeal on the ground that the it was from a non playing order or that it's moot and then second that if it does reach the merits that the court affirm the decision of the bankruptcy court so if i can take those in order this is an appeal from an one final order without leave of court the bullard case of the supreme court decided list term holds that the denial of confirmation of a plan is not a final order and there is essentially no difference between denial of confirmation in the first instance and denial of modification of a plan in the second instance in either case underlying question is what plan will be in effect for a chapter thirteen debtor to make payments to creditors confirmation determines that in the initial situation modification determines after the plan is originally confirmed somebody comes forward with a new plan yes and with a modification there is no new plan you're just out so it seems to me that they're not comparable at all jane when the difference is that in either situation there can be another proposal once the trustees motion was the night to modify the plan on the basis of what the trustee had presented to the course of in no modification order whatever be fine when there's another modification that's been i that's not final so there's never there's no such thing in your view as a final order involving my case the denial would not be final that's correct and no matter how many times of proposed claim was denied confirmation it would not be final but in a sense that's required by the nature of chapter thirteen the debtor after all is making payments to creditors over a three to five year period here it's a five year period in that five years any number of changes can take place in the debtors income and the number of dependents that the debtor has on the debtors other expenses the debtors health every time there's a change like that there's a potential for a modified plan so the district court shouldn't have heard this case in the first place that's correct what should have happened if the trustee believe there was an issue of was that really needed to be decided and couldn't be effectively decided with out and peel of an interlocutory order section one fifty eight of title twenty eight would allow the trustee to seek an interlocutory appeal from the district court seek a stay of the matter in the bankruptcy court so that no activity took place while the matter was pending an appeal and then there could have been a determination of contested legal issues but the trying to demean the status is  probably a better choice yes would have been a better choice in this situation i think it would have been essential because what this will get to the second of the grounds for dismissal but the matter has become moot the debtor did everything the debtor was required to do complied with the terms of the confirm plan that was in place at the time the debtor was in bankruptcy the debtor paid all the payments that were required and but for the fact that the administratively there's no there's no discharge under there should have been a disch under there would have been a discharge under but again the important thing i want to get across is that what we're dealing with here is exactly the situation in boulder bullard in the supreme court's decision to recognize that sometimes there's not an effective right to appeal you have to use the interlocutory appeal mechanism requiring a court order that wasn't done here the court said and polarising modification interlocutory it is me the plans already been confirmed so modification doesn't sound to me like it's something you know migratory seems like came after confirmation sure if there had been or if there had been a grant of modification it would have been an absolutely final order but given that modification  doesn't see what i don't understand that i mean there's already a plan in place so this is comes after the plan you want to change yes that doesn't sound like it's you know like you jury well your honor we may have a disagreement here that i can't overcome but the idea is that until modification actually takes place there's the potential for other changes being proposed or new grounds being presented and like any other in a walk you tour in order the judge who hears that matter can hear it again reconsider the decision look at the change facts and enter an order of modification despite the fact that the earlier ones is not the same so if so you have a debtor who loses a job gets a downward modification based on decreased income if that debtor who got the in modification returns to a some lower or higher paying job a modification request could be granted on the debt situation exactly precisely now if i go to the second grounds for dismissal that is the one that the court mentioned earlier this case is over no further relief can be granted and the trustee actually to a large extent accepts that they they tell you that if their relief is sought the debtor will automatically be in default two years of default under a chapter thirteen plan facing thousands of dollars of default that would have to be cured immediately and there's no way the order of modification could give the debtor any time to do the act because a modification can't extend  plan beyond five years so there are actually two separate grounds of movements here modification is governed by section thirteen twenty nine of the bankruptcy code section thirteen twenty nine eighty one says that once the debtor has made the final payment no modification could be made now the mesa case that the trustee relies on dealt only with that issue and with the mesa case hello fifth circuit was that when the debtor files a motion or anybody files a motion to modify the plan there's a stay that goes into effect preventing the debtor from completing the plan payments and they have allows the bankruptcy judge to make a decision a motion to modify before the final payments made may so was a debtor who is trying to be far too clever the debtor still has a number of months left to play in the pay and the plan but when the motion to modif filed the debtor makes a lump sum payment of everything that's you into the plan and then says ha bankruptcy judge you can't modify now because i made the final payment the fifth circuit says no thirteen twenty nine a one doesn't prove doesn't allow that kind of games playing when the motion to modify from the trustee came into effect a stay went into effect no more payments come in and therefore the judge can rule on the motion to modify with out exceeding the limitation that's  stablished by thirteen twenty nine a one five that wasn't done here the bankruptcy judge did get to consider there was no final payment made before the bankruptcy judge could rule on the matter and the judge denied confirmation or denied modification th second ground the second ground that limits modification is in thirteen twenty nine eighty three and what that provides is that once sixty months once five years have passed since the first  no further extension of time can be granted no further modification can take place so that happened here it was not addressed in may so what ever so both of those factors limit the ability of any kind of effect of relief in this case now the final issue that i want to address should the court want to address the merits of this case i say again as i said in the brief bankruptcy court never held that increased income could not result in a modification of a chapter thirteen plan that said repeatedly by the trustee there is no reference no quotation to any provision in that opinion that says modification cannot be based on an increase in income what happened here is that in two thousand and five the bankruptcy code w to create a very special ground for confirmation of a plant chapter six section thirteen twenty five b was amended to provide order to confirm a plan a debtor who makes more than the median income would be subject to a means test to determine exactly how much the debt it would have to pay to unsecured creditors it's automatic it's mandatory if the trustee objects it has to be applied by the court so there's an automatic definition of how much a debtor has to pay since two thousand and five and when the bankruptcy court got this motion the only ground the trustee suggested for supporting modification was that there had been an increase in the debtors income nothing else they had an opportunity for a contested hearing they the trustee through that possibility of a way and said i'm going to submit this soley on an affidavit of stipulation with the debtor indicating the amount of the net income increase and they act is what the bankruptcy judge held was an insufficient basis for modifying the plan unlike confirmation when we've got this automatic formula for determining how much of debt or what to pack a modification that does not apply and that's the bulk of the court's decision thirteen twenty five b the automatic increased doesn't apply to modification what does apply the bankruptcy court made clear she said this is page sixteen seventeen of the bankruptcy courts opinion pages twenty seven twenty eight for the short appendix when plan modification is sought by a trustee the statutorily created test of good faith applies and that's a shortening the quotation quite a bit but that's what it says no code provision suggests that a debtor's current income into an expenses however determined should simply be he netted to decide if plan payments should be modified you agree then that a bankruptcy court can increase  debtors payments based on an increase absolutely and not only does the bankruptcy court opinion not say anything different from that it's cites right after the quote i just read in ray davis which i'm somewhat familiar with because i wrote the opinion but in gave this what the court said was i'm quoting again the good faith requirement of thirteen twenty five a five allows all parties to object to in appropriate payment terms whether excess or inadequate in proposed modification the continued applicability of the good faith requirement and amounts in plan proposed apply regarding most of the party proposing the modification so the past is faith and what's the difference with good faith it requires under this court's in ring love and in regale decisions a consideration of the totality of the debtors financial circumstances now my belief is had the trustee understood the decision correctly and brought back to the bankruptcy court another motion seeking modification pointing out exactly what the totality of circumstances were which would have included the debtors divorce their moving to florida the fact that one of the debtors was earning less than that debtors expenses if the debtor had been required to respond to that who knows perhaps motion to modify would have been granted because it was an interlocutory order it was subject to reconsideration at any time that is all the you i want to address with the some of the comments by a police council spec to us seeking a stay of the effect in this case had we sought a stay at the bank scripts decision pending appeal we're still in the exact same position that we're in now which is the better and continued to pay six hundred seventy dollars per month they paid a certain amount to the plan which is more than was required or just over what that was required under their underlying chapter thirteen plan district courts nies modification we're past the five year mark so really the situation is almost  plan so it's really a very subtle distinction between a stay pending appeal and simply having the bankruptcy court decision reversed and vacated because either way under section thirteen twenty nine b to the trustees motion to modify becomes the plan so that it would still be facing this massive shortfall which isn't their fault and that's true but that doesn't change the fact that the bankruptcy court appears it's tresham and denying the trustees request for this higher dividend for general unscrewed creditors so what's the point of the stay in this case a stay pending appeal would not have a substantial effect overall if the debtors had sought a discharge we would have opposed the entry of the discharge on the basis that the payments were not completed when there is a pending appeal of a denied motion to modify  maybe it is true that the the bank's court erred in denying the modification on the basis of completion of payments solely but once it was denied when it got to the fifth circuit it was the exact same situation no state of the break the court's decision denying modification the underlying plan was paid off but the fifth circuit still heard the appeal and still vacated the bankruptcy court's decision because even though the denial had been entered even though the payments were completed and even though that denial had not been stayed thanks to the court standard to object to excessive payments that means that that code section of good faith has to be complied with but that's not what this bankruptcy court decision was saying makes court said that we had to have the support of circumstances of section thirty twenty nine a and it complies with section thirteen twenty nine b and it does not ask that the plan be extended to the end five years and we never have asked for the plan to be extended beyond five years although there is an opportunity to cure a default which is not a plan modification