Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca5-19-50177/USCOURTS-ca5-19-50177-0/pdf.json

Parties Involved:
Freddie Lee Brown
Appellant
Mary K. Viegelahn
Appellee

Document Text:

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 19-50177

In the Matter of: FREDDIE LEE BROWN,

 Debtor

FREDDIE LEE BROWN, also known as Freddie L. Brown, 

 Appellant

v.

MARY K. VIEGELAHN, Chapter 13 Trustee, 

 Appellee

Appeal from the United States Bankruptcy Court 

for the Western District of Texas

Before SOUTHWICK, GRAVES, and ENGELHARDT, Circuit Judges.

LESLIE H. SOUTHWICK, Circuit Judge:

A debtor filed for bankruptcy under Chapter 13. When the debtor sought 

to confirm his plan, the trustee objected. The court would confirm the plan 

only if the debtor chose one of two non-statutory conditions that the court 

would then impose. Finding both conditions undesirable but not wanting his 

case dismissed, the debtor agreed to one of the conditions and then appealed 

to the district court. The district court sua sponte certified the appeal to this 

court, and we accepted it. We VACATE the confirmation order and REMAND 

for further proceedings.

United States Court of Appeals

Fifth Circuit

FILED

June 8, 2020

Lyle W. Cayce

Clerk

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FACTUAL AND PROCEDURAL BACKGROUND

Freddie Lee Brown filed for Chapter 13 bankruptcy in October of 2017 

in the Bankruptcy Court for the Western District of Texas. Chapter 13 allows 

an individual to file for bankruptcy and “obtain a discharge of his debts if he 

pays a portion of his monthly income in accordance with a court-approved 

plan,” without liquidating his assets. Ransom v. FIA Card Servs., N.A., 562 

U.S. 61, 64 (2011). Brown filed his Chapter 13 plan, outlining a five-year 

payment plan, which included monthly payments of $1,080, to pay in full his 

secured creditors, and which included a promise to pay “approximately 100%” 

of the claims of his unsecured creditors. The total of unsecured creditors’ 

claims was listed as $7,728.18. 

Chapter 13 Trustee Mary K. Viegelahn objected to Brown’s plan on 

November 21, 2017. She cited as the basis for her objection: (1) the debtor’s 

income was overstated on Schedule I; (2) the plan was not feasible under 11 

U.S.C. § 1325(a)(6) because the debtor might not be able to make his payments 

under the plan given that the debtor was behind on his post-petition mortgage 

payments; and (3) the debtor had not included the income he received from the 

Department of Veterans Affairs on Schedule I or Schedule B. The trustee 

requested the court dismiss the case and find that the plan failed to meet the 

standards in 11 U.S.C. § 1325(a). 

The trustee insisted that the debtor’s failure to disclose some income was 

a violation of the requirement of good faith found in Section 1325(a)(3), 

although she acknowledged that this inaccuracy was later corrected by 

amendment. The trustee also objected based on Section 1325(a)(1), which 

requires the plan to comply with all other applicable provisions of the 

Bankruptcy Code. If the court nonetheless decided to confirm the plan, the 

trustee urged the court to impose certain conditions.

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After Brown amended the schedules that had misstated his income and 

failed to include his veterans benefits, his disposable monthly income — that 

is, his income minus reasonably necessary expenses — was calculated to be 

$2,191, as shown on Schedule J. Because his monthly payments under his 

proposed Chapter 13 plan would be $1,080, that would leave $1,111 of excess 

disposable income in Brown’s hands after all monthly payments had been 

made. 

In early 2018, the bankruptcy court held two confirmation hearings at 

which the trustee continued to object. The trustee proposed multiple 

conditions to address these objections. At the second hearing, the court told 

the parties that it would confirm the plan but only if it imposed one of two 

conditions. The judge let counsel confer with the debtor before choosing an 

option. 

The first option would require the debtor to agree to divert all his 

disposable income for the first seven months to pay the unsecured creditors. 

After that time, he would begin paying a lesser amount. The debtor also would 

maintain all his plan-modification rights under 11 U.S.C. § 1329. 

The second option would incorporate into the confirmation order what is 

known as the Molina language, as follows:

The plan as currently proposed pays a 100% dividend to unsecured 

claims. The Debtors shall not seek modification of this Plan unless 

said modification also pays a 100% dividend to unsecured claims. 

Additionally, should this Plan ever fail to pay a 100% dividend to 

unsecured claims the Debtors will modify the Plan to continue 

paying a 100% dividend. If the Plan fails to pay all allowed claims 

in full, the Debtors will not receive a discharge in this case. 

Molina v. Langehennig, No. SA-14-CA-926, 2015 WL 8494012, at *1 (W.D. Tex. 

Dec. 10, 2015). Under this provision, Brown would not have to pay all his 

disposable income into the plan, but his future ability to modify the plan would 

be limited.

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Brown chose the Molina language. On March 12, 2018, the bankruptcy 

court entered its order confirming the Chapter 13 plan and adopting the 

Molina language. Although the court added the language, the court did not 

grant the trustee’s objections or make any findings on whether the plan failed 

to meet the statutory requirements. Instead, the order simply recited that the 

“hearing having been held pursuant to 11 U.S.C. § 1324, no timely objection to 

confirmation having been filed, the trustee having recommended 

confirmation,” the plan as filed was confirmed with the described 

modifications. Brown requested that the bankruptcy court issue a certification 

for the appeal to be taken directly to the Fifth Circuit, but the bankruptcy court 

denied the request. 

Brown appealed the confirmation order to the district court. After the 

parties fully briefed the case, the court sua sponte certified the appeal here. 

The district court concluded that certification was appropriate because the 

issue — namely, whether a bankruptcy court may impose the Molina language 

on a Chapter 13 plan that complies with 11 U.S.C. § 1325 — was purely legal 

and no binding Fifth Circuit or Supreme Court precedent existed. Also 

relevant was that district courts in the Fifth Circuit had approached inclusion 

of such a condition in different ways. Finally, the district court found that the 

issue would continue to arise in bankruptcy courts, making certification a 

desirable means to advance resolution. 28 U.S.C. § 158(d). We later approved 

Brown’s appealing here prior to a district court judgment. 

DISCUSSION

We review a bankruptcy court’s factual findings for clear error and its 

conclusions of law de novo. Kennard v. MBank Waco, N.A., 970 F.2d 1455, 

1457–58 (5th Cir. 1992). Mixed questions of law and fact are also reviewed de 

novo. Bass v. Denney, 171 F.3d 1016, 1021 (5th Cir. 1999). The United States 

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Bankruptcy Code1 instructs that “[t]he debtor shall file a plan” in a Chapter 

13 bankruptcy. § 1321. When a Chapter 13 “plan complies with the provisions 

of this chapter and with the other applicable provisions of this title,” the 

bankruptcy court “shall confirm” the plan “[e]xcept as provided in 

subsection (b).” § 1325(a). “Shall” is a mandatory word indicating a command. 

See Foster v. Heitkamp (In re Foster), 670 F.2d 478, 487 (5th Cir. 1982) 

(confirmation of compliant plans is obligatory).

There is an exception to that command, which states that upon a 

trustee’s objection, “the court may not approve the plan unless, as of the 

effective date of the plan—

(A) the value of the property to be distributed under the plan 

on account of such claim is not less than the amount of such claim; 

or 

(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.

§ 1325(b)(1). 

Confirmation is a signal event under Chapter 13. It effectuates the plan 

and leads to “a discharge of the debts listed in the plan if the debtor completes 

the payments the plan requires.” United Student Aid Funds, Inc. v. Espinosa, 

559 U.S. 260, 264 (2010) (citing §§ 1324, 1325, and 1328). Later modification 

of payments under the plan can be sought. “At any time after confirmation of 

the plan but before the completion of payments under such plan, the plan may 

be modified, upon request of the debtor, the trustee, or the holder of an allowed 

unsecured claim, to” increase or reduce the amount of payments. § 1329(a). 

Plan modifications still must comply with Section 1325(a). § 1329(b)(1). When 

1 Unless otherwise indicated, all references to the “Code” and all statutory citations 

are to the Bankruptcy Code, Title 11 of the U.S. Code. 

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a debtor has made all his payments under a plan, he can receive a discharge. 

§ 1328.

Also relevant to our analysis of this special provision is that a

bankruptcy court “may issue any order, process, or judgment that is necessary 

or appropriate to carry out the provisions of this title.” § 105(a). Further, the 

Code should not be construed to prevent the court from “taking any action or 

making any determination necessary or appropriate to enforce or implement 

court orders or rules, or to prevent an abuse of process.” Id. Although Section 

105 provides the courts with powers in equity, those powers cannot “override

explicit mandates” of the Code. See Law v. Siegel, 571 U.S. 415, 421 (2014). 

This is because a court cannot “carry out” the Code while simultaneously 

violating it. Id. 

We will consider Brown’s argument that the imposed Molina condition 

violated Sections 1325 and 1329. Also before us are the trustee’s arguments 

that the bankruptcy court properly imposed the condition and that Brown’s 

Chapter 13 plan did not satisfy the requirements of Section 1325. 

I. Section 1325

A. Whether the plan complied with Section 1325(a)

According to the trustee, this court does not need to answer the new 

question of whether a bankruptcy court may impose non-statutory conditions 

when a plan satisfies Section 1325(a) and (b). Instead, the trustee argues that 

Brown’s plan did not comply with the requirements of Section 1325(a). Thus, 

the bankruptcy court would not be subject to Section 1325(a)’s mandatory 

language about confirming the plan, and the court would be within its 

authority to confirm the plan only with the Molina language. Specifically, the 

trustee argues that Brown’s Chapter 13 plan was defective under Section 

1325(a)(1), (3), (6), and (7). We will examine those arguments.

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Section 1325(a)(1) requires that a plan comply with “other applicable 

provisions” of the Code beyond Chapter 13. The trustee argues that Brown’s 

plan failed to comply with provisions applicable to the trustee’s duties, 

specifically, Sections 1302 and 704. Section 1302 imposes the duties on a 

Chapter 13 trustee and incorporates by reference most of the duties listed in 

Section 704. § 1302(b)(1). One of those duties is that the trustee “be 

accountable for all property received.” § 704(a)(2). Here, the trustee argues 

she had a duty under the Bankruptcy Code to preserve the estate and the 

added condition in the plan better allowed her to fulfill that duty. 

“The trustee in Chapter 13 exists to preserve the bankruptcy estate for 

creditors.” Barron v. Countryman, 432 F.3d 590, 594 (5th Cir. 2005). The 

trustee has specific statutory grants of responsibility and power to achieve her 

goals. Id. A trustee’s general duty to preserve the estate does not override 

specific provisions of the Code. Several Code provisions support that the 

trustee’s estate-preservation duty is not implicated here. First, the trustee is 

“accountable for all property received.” § 704(a)(2) (emphasis added). Brown’s 

excess disposable income, though, is not property that the trustee received, so 

the trustee cannot have a statutory duty to preserve it. Further, Section 

1325(b)(1) is disjunctive and does not require a debtor to pay all his disposable 

income into his plan. § 1325(b)(1)(A). Similarly, Section 1322 requires that a 

Chapter 13 plan “provide for the submission of all or such portion of future 

earnings or other future income of the debtor to the supervision and control for 

the trustee as is necessary for the execution of the plan.” § 1322(a)(1) 

(emphases added). Because Brown’s plan proposed to pay creditors in full but 

also allowed him to maintain some disposable income each month, turning over 

his excess disposable income was not necessary to execute the plan. Whatever 

a trustee’s duty to preserve the estate, it is not that a trustee must control a 

Chapter 13 debtor’s excess disposable income.

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The trustee also argues that Brown did not act in good faith as required 

by the Code. § 1325(a)(3), (7). The crux of the trustee’s argument is that Brown

acted in bad faith because his proposed plan makes “creditors bear the risk of 

default should there be a future change in the Debtor’s circumstances.” 

According to the trustee, Brown is seeking to “manipulate the Code” by 

maintaining over $1,000 of excess monthly disposable income while the overall 

debt to unsecured creditors is just over $7,000. The trustee also identifies 

Brown’s initial failure to disclose his veterans benefits as income as evidence 

of bad faith. 

Relying on a nonprecedential opinion, the trustee argues that the 

bankruptcy court was not required to state that it had considered all the factors 

in making a good-faith finding under Section 1325(a). Suggs v. Stanley (In re 

Stanley), 224 F. App’x 343, 347 (5th Cir. 2007). In Stanley, though, the 

bankruptcy court had made a finding of good faith. Id. It is true that the 

Stanley bankruptcy court did not explicitly state that it considered all the facts 

cumulatively, but that court had considered each indicator of bad faith raised 

by the trustee. Id. We therefore concluded that the “fair import” of the Stanley

court’s analysis was that it properly evaluated the totality of the circumstances 

surrounding good faith. Id. As a result, we upheld the bankruptcy court’s 

finding. Id. at 347–49. 

We usually review a bankruptcy court’s finding of good faith for clear 

error, Sikes v. Crager (In re Crager), 691 F.3d 671, 675–76 (5th Cir. 2012), but 

we apply de novo review when good-faith findings are based on incorrect law, 

In re Elmwood Development Co., 964 F.2d 508, 510 (5th Cir. 1992). Here, 

though, there were no findings on the Section 1325(a) requirements 

whatsoever. Even when the bankruptcy court summarized the proceedings, 

the bankruptcy court did not mention anything about good or bad faith. We 

are therefore unable to say, as we did in Stanley, that it was the “fair import” 

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of the bankruptcy court’s analysis that it properly analyzed the good-faith 

factors at all, much less cumulatively. Moreover, to the extent that the 

bankruptcy court made a finding of bad faith, it was based on incorrect law. 

We observe the sensible rule that “debtors are not in bad faith merely for doing 

what the Code permits them to do.” Beaulieu v. Ragos, 700 F.3d 220, 227 (5th 

Cir. 2012). We thus reject the trustee’s view that maintaining excess 

disposable income is inherently bad faith and manipulation of the Code. 

In addition, the trustee argues that the plan was not feasible because 

Brown would not be able to comply with its terms. § 1325(a)(6); Foster, 670 

F.2d at 486. In determining whether a plan is feasible, among relevant factors 

is “the degree of responsibility of the debtor, as evidenced by his past dealings 

with his creditors, and the reasons contributing to the debtor’s need for a 

Chapter 13 plan may be significant.” Foster, 670 F.2d at 487. We also 

explained that “the bankruptcy court, in deciding whether to confirm the plan, 

must determine whether the debtor will be able to make those payments and 

to comply with the plan.” Id. at 486 (emphasis added). Here, the bankruptcy 

court made no finding on feasibility.

Unless Brown’s plan fell short of the Section 1325(a) criteria, the court 

was required to confirm the plan, subject to subsection Section 1325(b). See 

Foster, 670 F.2d at 487. We have analyzed the claimed shortcomings under 

Section 1325(a) and rejected them. To conclude, we next consider de novo 

whether Brown’s plan complied with Section 1325(b)(1).

B. Whether the plan complied with Section 1325(b)(1)

When a trustee objects to confirmation of a Chapter 13 plan, the 

bankruptcy court may not confirm the plan unless (A) the full value of the 

claim is to be paid under the plan, or (B) the plan provides that all the debtor’s 

disposable income will go toward payments. § 1325(b)(1)(A)–(B). The trustee 

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argues that the statute does not give a choice between the two ways of 

complying with Section 1325(b)(1). Instead, subsection (B) sets the minimum 

payment for debtors whose income is above the applicable state’s median, as 

calculated under Section 1325(b)(3). 

Specifically, the trustee argues that the Bankruptcy Abuse Prevention 

and Consumer Protection Act of 2005 (“BAPCPA”), Pub. L. 109-8, 119 Stat. 23, 

amended the Code so that an above-median debtor’s minimum payment for a 

Chapter 13 plan is his monthly disposable income, under subsection (b)(1)(B). 

The trustee cites Federal Rule of Bankruptcy Procedure 1007, which states 

that Chapter 13 debtors must file statements of monthly incomes and calculate 

their disposable income. FED. R. BANKR. P. 1007(b)(6). She also emphasizes 

that BAPCPA was passed “to promote the rights of creditors.” 

The trustee’s interpretation of Section 1325(b)(1) runs counter to the 

plain text, which is where we begin and end. See BedRoc Ltd., LLC v. United 

States, 541 U.S. 176, 183 (2004). Section 1325(b)(1) contains two disjunctive 

elements. If a trustee objects to confirmation of a Chapter 13 plan, the 

bankruptcy “court may not approve the plan unless” the debtor complies with 

option (A) “or” option (B). § 1325(b)(1). Generally, “or creates alternatives.” 

ANTONIN SCALIA & BRYAN A. GARNER, READING LAW: THE INTERPRETATION OF 

LEGAL TEXTS 116 (2012). Subsection (b)(1) is not ambiguous textually. The 

trustee’s interpretation works only if “or” is completely read out of the 

subsection. We conclude a debtor does not need to comply with both 

subsection (b)(1)(A) and (b)(1)(B). § 1325(b)(1)(A)–(B).

Next, we consider whether Brown’s plan complied with Section

1325(b)(1)(A). The trustee argues that, even if subsection (b)(1)(B) does not 

establish the minimum payment, Brown’s plan still did not satisfy 

subsection (b)(1)(A). Brown proposed paying unsecured creditors 

“approximately 100% of allowed claims.” The trustee expresses skepticism at 

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the word “approximate,” noting that the “Debtor’s plan did not guarantee 

payment in full. By its own terms, it only proposed to pay an approximate 

100%.” Brown informs us, though, and the trustee does not dispute, that 

“approximate” comes from a mandatory standing order of this particular 

Bankruptcy Court. 

The option provided in subsection (b)(1)(A) states that “the value of the 

property to be distributed under the plan on account of such claim is not less 

than the amount of such claim,” as of the effective date of the plan. 

§ 1325(b)(1)(A). The plan would pay unsecured creditors “approximately 

100%,” which is as close to “in full” as the standing order allows a plan to state. 

The plan did not propose to pay “less than the amount of such claim.” Thus, 

the plan complied with subsection (b)(1)(A), and the bankruptcy court was not 

prohibited by that section from confirming the plan. § 1325(b)(1). 

C. Whether the imposed condition violates Section 1325

We now consider whether imposing the Molina language violated Section 

1325(a) and (b). Brown starts with the premise that his Chapter 13 plan 

complied with Section 1325(a). Brown argues that because Section 1325(a) 

lists specific criteria that a Chapter 13 plan must meet, the court did not have 

discretion to add additional conditions. According to Brown, this lack of 

discretion is implied by the mandatory nature of the word “shall” and by the 

negative-implication canon of expressio unius est exclusio alterius. See NLRB 

v. SW Gen., Inc., 137 S. Ct. 929, 940 (2017).

Section 1325(a) mandates the confirmation of compliant Chapter 13 

plans, but it does not address what a bankruptcy court may include in its 

confirmation order. The caselaw demonstrates differences of opinion among 

courts. Compare Petro v. Mishler, 276 F.3d 375, 378 (7th Cir. 2002)

(disagreeing with the conclusion that a court can require a Chapter 13 plan 

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compliant with 1325(a) to meet additional requirements), with Martinez v. 

Viegelahn, 581 B.R. 486, 494 (W.D. Tex. 2017) (Section 1325 does not prohibit 

judicially imposed conditions), and In re Walker, 165 B.R. 994, 1000 (E.D. Va. 

1994) (bankruptcy court has power to impose conditions under Section 105). 

What we do know is that Section 105(a) speaks in quite broad terms of a 

bankruptcy court’s authority, but it “does not authorize the bankruptcy courts 

to create substantive rights that are otherwise unavailable under applicable 

law or constitute a roving commission to do equity.” United States v. Sutton, 

786 F.2d 1305, 1308 (5th Cir. 1986) (footnote omitted). The bankruptcy court 

did not link the imposition of the Molina language with furthering another 

Code provision, and indeed, our understanding of the trustee’s arguments is 

that she is relying on equity to support the provision.

The transcript of the hearing on the plan supports that the bankruptcy

court would not have confirmed the plan without an extra condition. Between 

two undesirable options,2 the debtor chose the Molina language. That 

language restricted modification. The restrictions are these: (1) any 

modification had to pay “a 100% dividend to unsecured claims,” (2) the debtor 

had to modify the plan should he “fail to pay a 100% dividend to unsecured 

claims,” and (3) there would be no discharge unless all allowed claims were 

paid in full. 

We will not make any broad rulings here about whether a bankruptcy 

court may impose conditions on a compliant Chapter 13 plan. Nor will we now 

adopt the debtor’s blanket rule that satisfying the Section 1325(a) criteria 

2 Brown argues that the alternative condition he did not accept, which would have

required him to pay all his disposable income for the first seven months of the plan, would 

have made superfluous the requirement that “the value of the property to be distributed 

under the plan on account of such claim is not less than the amount of such claim.” 

§ 1325(b)(1)(A). The confirmation order, though, did not force Brown to proceed under 

subsection (b)(1)(B). We will not analyze the proposed condition that is not before us.

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always precludes court-imposed conditions on a bankruptcy plan. 

Nevertheless, the Molina provision arguably contravened Section 105(a) by its 

failure to further some other provision of the Code. We are reluctant to so hold, 

though, because the bankruptcy court did not articulate or analyze whether 

some provision of the Code was being upheld by the Molina provision. We do 

hold that, at a minimum, the provision was not “necessary or appropriate to 

carry out” any part of the Code identified in this appeal. 

Instead of basing our holding on a potential violation of Section 1325(a), 

though, we consider ourselves on firmer footing to resolve the case on the 

following analysis concerning Section 1329.

II. Section 1329 

Brown argues that the Molina language violates Section 1329 of the 

Code by limiting the debtor’s ability to modify the plan. Section 1329(a) 

provides: “At any time after confirmation of the plan but before the completion 

of payments under such plan, the plan may be modified, upon request of the 

debtor, the trustee, or the holder of an allowed unsecured claim, to” adjust 

payments, schedules, or the distribution of those payments to different 

creditors. § 1329(a)(1)–(4).

Brown relies on the district court’s reasoning in Martinez. 581 B.R. 486.

Martinez was another Chapter 13 case in which a district court reviewed a plan 

confirmed by the bankruptcy court. The bankruptcy court had added the 

Molina language, and the district court had to decide whether that violated 

Section 1329. 581 B.R. at 491. Martinez found that, despite bankruptcy courts’ 

broad equitable powers under Section 105, the Molina language contravened 

Section 1329. Id. at 493–97. The court explained: “The purpose of Section 1329 

is to allow modification of a confirmed plan should circumstances change 

during the life of the plan.” Id. at 495. Although the court recognized that a 

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trustee has some competing duties to protect the unsecured creditors, the court 

observed that the solution was simple: “Should Debtors later seek modification 

of their Chapter 13 Plan Order under Section 1329, Debtors will still have to 

meet all of the requirements listed under Section 1325(a), including the 

requirement of good faith.” Id. at 497. The court vacated the conditional 

Molina language and affirmed the remainder of the confirmation order. Id. at 

499.

According to the trustee, though, Brown still may seek modification 

under the Molina language. The trustee argues that Martinez got it wrong 

because it “misunderstood the impact of the Molina language on the debtors.” 

This argument is different than what the trustee argued to the bankruptcy 

court. At the confirmation hearings, she acknowledged that the Molina 

language allows a debtor to modify his plan but “not to amend to pay less than 

100 percent.” In her appellate briefing, however, the trustee argues that under 

the Molina language, “debtors were not prohibited from modifying the plan to 

pay less than 100%. . . . The debtors were only required to pay 100% to obtain 

a discharge. A discharge is merely a privilege and not a right.” 

The Molina language states: “The Debtor(s) shall not seek modification 

of the Plan unless said modification also pays a 100% dividend to unsecured 

claims.” Consequently, any future modifications cannot downwardly adjust

the amount to be paid to unsecured creditors. Even the bankruptcy court 

seemed to recognize that this condition limited Brown’s rights under Section 

1329. When giving a choice between the two conditions, the court stated to 

debtor’s counsel: “I understand your argument about 1329, that’s why I’m 

giving you the difficult, admittedly, choice. If you’re concerned about 

preserving 1329, I’m going to balance it against paying the unsecured claims.” 

(emphasis added). 

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We are persuaded by the Martinez court’s reasoning that the Molina

language violates Section 1329. Further, if the trustee is correct in her 

appellate briefing that Brown may modify the plan to pay less, but that the 

Molina language would still preclude him from receiving discharge, then the 

condition violates Section 1328. Under Section 1328(a), a debtor who has made 

“all payments under the plan” may receive discharge of certain debts. 

§ 1328(a). Under the trustee’s interpretation of the Molina language, a debtor 

could modify the plan to pay less than 100% to unsecured creditors, but a 

debtor who did so would not be able to receive discharge, despite making “all 

payments under the plan,” § 1328(a). The Molina language is better read, 

though, as limiting a debtor’s ability to request certain modifications.

Although we hold today that conditions prohibiting certain modifications 

of Chapter 13 plans violate Section 1329, we note that this dispute seems in 

some ways much ado about nothing. Modifications of Chapter 13 plans must 

meet the same standards as a plan when first proposed. § 1329(b)(1). If, postconfirmation, a debtor in bad faith requests a modification of the plan, it is 

within the bankruptcy court’s discretion to deny that request. Still, a 

bankruptcy court should not limit Section 1329’s availability based on 

speculation about an as-of-yet non-existent request to modify a Chapter 13 

plan.

We VACATE the confirmation order and REMAND to the bankruptcy 

court for proceedings consistent with this opinion.

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