FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C U IT In the M a tte r of: C ESAR IVAN FLORES; ANA M AR IA FLOR ES, De

btors. R OD DANIELSON, Truste e - Appe l la nt,
v. C ESAR IVAN FLORES; ANA M A R IA FLOR E S, De

btors - Appe lle e s. No. 11-55452 D.C . No. 6:10-29956-M J
OPINION

Appe a l from

the Unite d State s B ankruptc y C ourt for the C e ntra l Distric t of C a lifornia M e re dith A. Jury , B ankruptc y Judge , Pre siding Argue d an d Subm itte d En B a

nc M arc h 19, 2013 San Fran c isc o , C a lifornia B e fore : KOZINSKI, C h ie f Judge , a nd PREGER SON, O’ SC ANNLAIN, THOM AS, SILVERM AN, GR AB ER , W ARDLAW , PAEZ, M U R GUIA, C HR ISTEN, a

nd NGUYEN, C irc uit Judge s.

Opinion by

Judge Gra

be r GR AB ER , C irc u it Judge : 

# F IL ED
AUG 29 2013 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALSIn M ane y v. Ka ge nve a m a (In re Ka ge nve am a ), 541 F.3d 868, 875 (9th C ir. 2008), we he ld tha

t 11 U.S.C . § 1325(b)(1)(B ) doe s not im pose a m inim

um duration for a

C ha pte r 13 ba nkruptc y pla n if the de btor ha s no " proje c te d disposa ble inc om e ," a s de fine d in the sta tute . Toda

y , sitting e n ba

nc , we ove rrule that a spe c t of Ka ge n ve a m a

an d hold tha

t the sta tute pe rm its c onfirm a tion only if the l e ngth of the propose d pla n is a t le a st e qua l to the a

pplic a ble c om m itm e nt pe riod unde r § 1325(b)(4). Ac c ordingly , we a ffirm the judgm e n t

of the ba nkruptc y
c ourt. I. B a c kground De btors C e sa

r an d Ana Flore s file d a pe tition for re lie f unde r C ha pte r 13 of the B an kruptc y

C ode . The y

have unse c ure d

de bts. The y

propose d a

pla n of
re orga niz a tion unde r whic h

the y would pa y $122 pe r m onth (1%) of a llowe d,
unse c ure d, nonpriority

c l a im s for thre e y e ars. C h a pte r 13 Truste e R od Da

nie lson obje c te d to the pla

n, a rguing, a s now re le v ant, tha t § 1325(b) re quire s a

m inim um duration of five y e ars for pe rsons in Debtors’ c irc um s ta nc e s. 1 The ba nkruptc y c o urt susta ine d the Truste e ’ s obje c tion, holding tha t De btors
we re not e ntitle d to a shorte r pla n duration be c a

use the Supre m e C o urt’ s de c ision

1 The Truste e ha s ne ve r que stione d De btors’ good fa ith in proposing the pla n . Se e 11 U.S.C . § 1325(a )(3) (se tting forth re q uire m e nt of the de btors’ good fa ith). 2in Ha

m ilton v. La

nning, 130 S. C t. 2464 (2010), is c le arly irre c onc ila

ble with Ka ge nve am a . 2 The ba

nkruptc y c ourt c onfirm e d a

pla n of five y e ars’ duration, whic h provide d for m onthly pa y m e nts of $148 to unse c ure d c re ditors. 3 De btors tim e ly

a ppe a le d to the B ankruptc y Appe lla te Pane l. The ba

nkruptc y
c ourt the n c e rtifie d the pla n-duration issue

for dire c t a ppe a l to this c ourt pursua nt to 28 U.S.C . § 158(d)(2). A divide d pa ne l of this c ourt re ve rse d , re a soning tha t Lanning is not c le arly

irre c o nc i la

ble with Ka ge nve am a

and tha t, unde r Ka ge nve am a , § 1325(b) a llows a shorte r pla

n duration for De btors. Da nie lson v. Flore s (In re Flore s), 692 F.3d 1021, 1038 (9th C ir. 2012). W e the n vote d to re he a r the c a se e n ba

nc . Da nie lson v. Flore s (In re Flore s), 704 F.3d 1067 (9th C ir. 2012). 4 II. Ana ly sis

2 Se e M ille r v. Ga

m m ie , 335 F.3d 889, 900 (9th C ir. 2003) (e n ba nc ) (holding tha

t a thre e -judge pa

ne l is not bound by prior c irc uit pre c e d e nt if a n inte rve ning de c ision of a

highe r a uthority " unde rc ut[s] the the ory or re a soning unde rly ing the prior c irc u it pre c e de nt in suc h a wa y tha t the c a se s are c le arly irre c onc i la

ble " ). 3 De btors do not dispute

the inc re a se from

$122 to $148 pe

r m onth. 4 W e re vie w de novo issue s of sta tutory c onstruc t ion, inc l uding a ba nkruptc y c ourt’ s inte rpre tation of the B an kruptc y C ode . Sam s on v. W . C a

pita l Pa rtne rs, LLC (In re B lixse th), 684 F.3d 865, 869 (9th C ir. 2012) (pe r c uriam ). 3C ha

pte r 13 is a

m e c ha nism ava ila ble to " individua l [s] with re gula r inc om e " whose de bts a

re within sta

tutory lim i ts. 11 U.S.C . §§ 101(30), 109(e ). Unlike C ha pte r 7, whic h re quire s de b tors to liquida te none xe m

pt a sse ts to pa

y c re d itors, C ha pte r 13 pe rm its de btors to ke e p those a sse t s if the y " a gre e to a

c ourt-a pprove d pla n unde r whic h

the y pa y c re ditors out of the ir future inc om e ." La nning, 130 S. C t. at 2468–69 (c iting 11 U.S.C . §§ 1306(b), 1321, 1322(a )(1), 1328(a )). A ba nkruptc y truste e ove rse e s the filing a nd e xe c ution of thepla

n. 11 U.S.C
. § 1322(a )(1); se e a lso 28 U.S.C . § 586(a )(3). Se c tion 1325 of the

B ankruptc y

C ode se ts forth the c irc um sta nc e s in whic h the b ankruptc y c ourt " sha ll" c onfirm a de btor’ s propose d re pa

ym e nt pla n a nd those in whic h it " m ay

not" do so. Unde r subse c tion 1325(b)(1), if the truste e or a

n
unse c ure d c re ditor obje c ts to a de btor’ s propose d pla

n, the c ourt m ay

not a p prove the p la n unle ss a t le a st one of two c onditions is m e t. As re le va

nt he re , the se c ond of those c onditions is tha

t " the pla n provide s tha

t a ll of the de b tor’ s proje c te d disposa ble inc om e to be re c e i ve d in the a pplic a ble c o m m i tm e nt pe riod be ginning on the date tha

t the first pa

ym e nt is due unde r the pla n will be a

pplie d to m a

ke pa ym e nts to unse c ure d c re ditors unde r the pla n." 11 U.S.C . § 1325(b)(1)(B ) (e m pha sis a dde d ). The sta

tute furthe r provide s tha

t the " a pplic a ble c om m itm e nt pe riod" of a

pla n " sha ll be " e ithe r
4(A) subje c t to subpa ra gra ph (B ), . . . (i) 3 y e ars; or (ii) not le ss tha

n 5 y e ars, if the [de btor’ s] c urre nt m onthly inc om e . . ., whe n m

ultiplie d by 12, is not le ss tha n [the m e d ia

n a nnua l fa m ily

inc om e in the a

pplic a ble sta te ] ; a nd (B ) m ay be le ss tha

n 3 or 5 y e ars, whic he ve r is a pplic a ble unde r subpa ra gra ph (A), but only

if the pla n provide s for pa

ym e nt in full of a ll a llowe d unse c ure d c la im s ove r a shorte r pe riod. Id. § 1325(b)(4). Thede btor’ s " c urre nt m onthly inc om e " and " disposa ble inc om e "
are c a lc ulat e d a c c o rding to sta tutorily de fine d form

u la e . Se e id. § 101(10A) (de fining " c urre n t m onthly inc om e " ); id. § 1325(b)(2) (de fining " disposa ble inc o m e " ); se e a lso La

nning, 130 S. C t. at 2469, 2471–74, 2478 (holding tha t c ourts
m ust c a lc ulate " proje c t e d disposa ble inc om e ," whic h is not sta tutorily de fine d, using a " forwa rd-looking" a

pproa c h (e m

pha sis a dde d)). It is undispute d tha

t De btors’ c urre nt m onthly inc om e is a

bove -m e dia

n a nd that subse c tion 1325(b)(4)(B )’ s e xc e ption to the five -y e ar a pplic a ble c om m i tm e nt pe riod se t forth in § 1325(b)(4)(A)(ii) doe s not a pply . De btors none the le ss
c onte nd tha

t the ir propose d thre e -y e ar pla n wa s pe rm i ssible be c a

use § 1325(b)(1)(B ) doe s not se t forth a m inim um pla n duration for de btors who, like the m , ha ve no proje c t e d disposa

ble inc om e .

5C ourts ha ve inte rpre te d § 1325(b)(1)(B )’ s c ondition for pla n c onfirm a tion in thre e distinc t wa

y s . Se e B a

ud v. C arroll, 634 F.3d 327, 336–38 (6th C i r. 2011) (de s c ribing split of de c isions a n d c olle c ting c a se s), c e rt. de nie d, 132 S. C t. 997 (2012). First, a

m inority of ba n kruptc y c ourts vie w the " a

pplic a ble c om m itm e nt pe riod" sole ly

a s a m one ta ry " m ultiplie r" ; unde r tha

t " m one t ary " a

pproa c h, the
num be r of m onths in the

a pplic a ble c om m i tm e nt pe riod is m

ultiplie d by

the de btor’ s proje c te d disposa ble m onthly inc o m e to de te rm ine the tota l pa ym e nts tha

t
a de b tor m ust m a ke , but the pe riod ha s no te m pora l signific anc e . Id. at

336–38 & n.7. Se c ond, othe r bankruptc y c ourts, a s we ll a s this c ourt in Ka ge nve am a , ha ve he ld tha t, a lthough the sta

tute doe s se t

forth a te m pora l re q uire m e nt, tha

t te m pora l
re quire m e nt doe s not a

pply to de btors whose proje c te d disposa ble inc om e is le ss tha n or e qua l to $0. B a

ud, 634 F.3d a

t 337. Third a

nd fina lly , a

m a jority of c ourts have he ld tha

t a pla n c annot be c onfirm e d

unle s s its le ngth is a

t le a st a s long a s the
a pplic a ble c om m i tm e nt pe riod, without re ga rd to " w he the r the de btor ha s positive , z e ro[,] or ne gat ive proje c te d disposa ble inc om e ." Id. at 336–37. W e the re fore
m ust c o nside r two issue s: (1) whe the r, unde r § 1325(b)(1)(B ), the a pplic a ble
c om m itm e nt pe riod a c ts a s a

te m pora l re q uire m e n t tha t de fine s a

pla n’ s m inim

um duration; a

nd (2) if it doe s, whe the r that re quire m e nt a pplie s to de btors who ha

ve no proje c te d disposa

ble inc om e . 6W ith re spe c t to the first issue , we hold tha t the sta tute de fine s a

te m pora l, a s distinc t from

a m one t ary , re quire m e nt for c onfirm a tion unde r § 1325(b)(1)(B ). M ost im porta ntly , the sta

tute de fine s the a

pplic a ble c om m itm e nt pe riod a s ha

ving a duration: " 3 y e ars," " not le ss tha n 5 y e ars," or " le s s tha

n 3 or 5 y e ars," de pe nding on the de btor’ s c urre nt m onthly inc om e and the pla

n ’ s provisions for pa

ym e nts to
unse c ure d c re ditors. 11 U.S.C
. § 1325(b)(4). Furthe rm ore , the re quire m e nt of § 1325(b)(1)(B ) that the pla n provide for pa

ym e nt of the de b tor’ s disposa ble inc o m e " to be re c e ive d in the a pplic a ble c om m itm e nt pe riod" sugge sts a n ongoing
se rie s of pa

ym e nts for the future duration of tha t pe riod. A pla

n c annot providefor the p aym e nt of inc om e to be re c e ive d during a de fine d pe riod unle ss it re m a ins in
e ffe c t during tha

t pe riod. 5 Thre e of our siste r c ourts— the Sixth, Eighth, a

nd Ele ve n th C irc uits— are
am ong the c ourts tha

t ha ve re je c te d the vie wtha

t the a pplic a ble c om m i tm e nt

5 Our inte rpre tation of § 1325(b)(1)(B ) doe s not re nde r that provision re dunda n t with § 1322(d), whic

h se ts forth the m a xim

um pe riods of tim e for a C ha pte r 13 ba nkruptc y , be c a

use § 1325(b)(1)(B ) c onc e rns the pla n’ s m inim

um duration. Although both the m a xim um an d the m inim

um will be five y e ars for m any de btors whose inc om e , like tha t of the de btors in this c a se , is a bove -m e dia

n, 11 U.S.C . §§ 1322(d)(1), 1325(b)(4)(A)(ii), a range of pe rm issible pla

n durations re m a in possible

if a propose d pla

n to re pa y a ll a l lowe d unse c ure d c re ditors’ c la im s in full wa rra nts a shorte r a pplic a ble c om m itm e nt pe riod unde r § 1325(b)(4)(B ). Furthe rm ore , § 1325(b) is trigge re d only if the truste e or a c re ditor obje c ts, whe re a s § 1322(d) a

pplie s in a ll c a se s, a distinc tion tha t sugge sts tha

t C ongre ss inte nde d the two se c tions to serve diffe re nt func tions. 7pe riod is m e re ly a m one ta ry m ultiplie r for de te rm ining theam ount tha t the de btor
m ust pa y to unse c ure d

c re ditors. B a

ud, 634 F.3d a

t 344; W ha l e y v. Te nny son (In
re Te nny s on), 611 F.3d 873, 880 (11th C ir. 2010); C oop v. Fre de ric kson (In re Fre de ric kson), 545 F.3d 652, 660 (8th C ir. 2008). W e join those c o urts a nd hold that the a pplic a ble c om m itm e nt pe riod de te rm i ne s the m inim um duration tha

t a pla n m ust ha ve to be c onfirm a

b le unde r § 1325(b)(1)(B ). In doing so, we re a ffirm
one a spe c t of the de c i sion in Ka ge nve am a , in whic h the pa ne l re a sone d tha

t, in ge ne ra l, the a

pplic a b l e c om m i t m e nt pe riod im

pose s a te m pora l re quire m e nt be c a use the " pla in m e aning of the word ‘ pe riod’ indic a te s a pe riod of tim e ." 541 F.3d at 876. W ith re spe c t to the se c ond issue , we m ust de c ide whe the r a

c ourt m ay
c onfirm a pla n tha t is shorte r tha

n the a pplic a ble c om m itm e nt pe riod de fine d by § 1325(b)(4) if thede btor ha s no proje c te d disposa ble inc om e . In light of the sta tute ’ s te x t, purpose , a

nd le gisla tive history , we now hold tha t the te m pora l
re quire m e nt of § 1325(b) a pplie s re ga

rdle ss of the de btor’ s proje c te d disposa ble inc o m e . In Ka ge nve a m a , we he ld tha t the § 1325(b)(1)(B ) te m pora l re quire m e nt
c onta ins a n im plic it e x c e ption be c a

use the " ‘ a

pplic a ble c om m i tm e nt pe riod’ is
e xc lusive ly

linke d to § 1325(b)(1)(B ) and the ‘ proje c te d disposa ble inc om e ’
8c a lc ulat ion." 541 F.3d a t 8 7 6. Noting tha

t " [n] othing in the

B ankruptc y C ode sta te s tha t the ‘ a p plic a ble c om m itm e nt pe riod’ a

pplie s to a ll C ha

pte r 13 pla

ns," the pa ne l c onc lude d tha

t " [w] he n the re is no ‘ p roje c te d disposa ble inc om e ,’ the re is no

‘ a pplic a ble c om m i tm e n t pe riod.’ " Id. at 876, 877. The Sixth a n d Ele ve nth C irc uits have disa gre e d a

nd ha ve he l d tha

t § 1325(b) c onta ins no suc h e x c e ption for de btors with no proje c t e d disposa ble inc om e . Se e B a

u d, 634 F.3d a

t 351 (" [T] he te m

pora l
re quire m e nt of the a

pplic a ble c om m itm e n t pe riod a

pplie s to de btors fa c ing a
c onfirm ation obje c tion e ve n if the y hav e z e ro or ne gative proje c te d disposa ble inc o m e . " ); Te nny son, 611 F.3d a t 880 (" [T] he ‘ a

pplic a ble c om m itm e nt pe riod’ is a te m pora l te rm

tha t pre sc ribe s the m inim

um [pla n ] duration . . . . The

only
e xc e ption to this m

i nim um p e riod, if unse c ure d c la i m s a re fully re pa i d, is provide d in § 1325(b)(4)(B )." ). 6 W e now a gre e with the othe r c irc uits’ inte rpre tation. Our a na ly sis be gins with the

sta tute ’ s te xt. M iranda

v. Anc hondo, 684 F.3d 844, 849 (9th C ir.), c e rt. de nie d, 133 S. C t. 256 (2012). Although § 1325(b) is
som e what a

m biguous, se e B a

ud, 634 F.3d a

t 351 (noting tha

t " the pla in-la

ngua ge
argum e nts" for and a g a inst a n e xc e ption to § 1325(b)’ s te m pora l re q uire m e nt " are
ne arly in e quipoise " ), tha

t subse c tion is be st re a d

to im pose its te m

pora l

6 In Fre de ric kson, the Eighth C irc uit e xpre ssly de c line d to de c ide whe the r suc h an e xc e ption to § 1325(b)’ s te m pora l re quire m e nt e xists whe n a de b tor’ s proje c te d disposa ble inc om e i s e ithe r z e ro or ne g a tive . 545 F.3d a t 660 n.6. 9re quire m e nt re ga rdle ss of the de btor’ s proje c t e d disposa ble inc om e . M ost signific antly , the sta

tute m a ke s ne ithe r § 1325(b)(4)’ s c a l c ulation of thea pplic a ble
c om m itm e nt pe riod nor § 1325(b)(1)(B )’ s re quire m e nt tha t a pla n provide for pa ym e nts ove r that pe riod e xplic itly c ontinge nt on a pa rtic ula r le ve l of proje c te d disposa ble inc om e . Thus, e ve n though a de btor’ s pa

ym e nts to unse c ure d c re ditors will, a t le a s t initia lly , am ount to $0 if the de btor ha s no proje c te d disposa ble inc o m e , the sta

tute re quire s the de btor to c om m it to thepla

n for the duration of the
a pplic a ble c om m i tm e nt pe riod. Furthe rm ore , " the words of a sta tute m u st be re a d in the ir c onte xt a nd with a vie wto the ir pla c e in the ove ra ll sta tutory sc h e m e . " Ga le v. First Fra nklin Loa n Se rvs., 701 F.3d 1240, 1244 (9th C ir. 2012) (inte rna l quota tion m arks om i tte d). The struc ture of C ha

pte r 13 c onfirm s tha

t § 1325(b)(1)(B ) e s ta

blishe s a m inim

um pla n duration e ve n if the de b t or ha s no proje c t e d disposa ble inc o m e . A de btor’ s
a pplic a ble c om m i tm e nt pe riod is not, a s the pa ne l re a sone d in Ka ge nve am a ,

" e xc lusive ly

linke d to § 1325(b)(1)(B ) and the ‘ proje c te d disposa ble inc om e ’
c a lc ulat ion." 541 F.3d a

t 8 7 6. R a the r, the a

pplic a ble c om m i tm e nt pe riod is
e xpre s sly inc orporate d a s a

te m pora l lim it for purpose s of pla n m odific at ion unde r § 1329.

10Unde r § 1329(a ), a ba nkruptc y c o urt m ay m odify a

pla n at any tim e a fte r pla n c onfirm a tion, so long a s the m odific at ion oc c urs be fore the c om ple t ion of pa ym e nts unde r the pla

n. B ut a m odifie d pla

n " m ay not providefor pa

ym e nts ove r
a pe riod tha

t e xpire s a fte r the a

pplic a ble c om m itm e nt pe riod unde r se c tion 1325(b)(1)(B ) a fte r the tim e tha t the first pa

ym e nt unde r the origina l c onfirm e d pla n wa s due ." 11 U.S.C . § 1329(c ) (e m p ha sis a dde d). Thus, thesta t ute de fine s the t e m pora l window within whic h m odifie d pa

y m e nts unde r § 1329 m ay

be m a de by re fe re n c e to the a

pplic a ble c om m itm e nt pe riod. Inde e d, the quote d te xt would
m ake no se nse unle s s the a pplic a ble c om m i tm e nt pe riod de sc ribe s a le ngth of tim e that c an e xpire or be a lte re d. W ith re spe c t to pla n m odific a tion, the n, the
a pplic a ble c om m i tm e nt pe riod se rve s a s a m e a sure of pla

n duration tha

t is wholly
unre late d to the am ount of the d e btor’ s disposa ble inc om e . A m i nim um duration for C ha

p te r 13 pla

ns is c ruc ia l to a

n im porta nt purpose of § 1329’ s m odific a tion proc e s s: to e nsure tha t unse c ure d c re ditors ha

v e a
m e c ha nism for se e k ing inc re a se d (tha t is, non-z e ro) pa

ym e nts if a

de b tor’ s fina nc ia l c i rc um s ta

nc e s im prove une xpe c t e dly . Se e Fridle y v. Forsy the (In re Fridle y ), 380 B .R . 538, 543 (B
. A.P. 9th C ir. 2007) (" Subse que nt inc re a s e s in [a de btor’ s] a c tua l inc om e c an be c a pture d for c re ditors by

wa y of a § 1329 pla

n
m odific a tion . . . ." ). The ba nkruptc y c ourt m ay

m odify a pla n to " inc re a se . . . the
11am ount of pa ym e n t s on c la im s of a

pa rtic u la r c la ss." 11 U.S.C . § 1329(a )(1). In othe r words, e ve n if a

de btor ha s no proje c te d disposa ble inc om e a t the tim e of pla n c onfirm a tion, a

nd his or he r statutorily

re quire d pa

ym e nts unde r § 1325(b)(1)(B ) are the re fore $0, unse c ure d c re d itors m ay re q ue st a late r
m odific a tion of thepla

n to inc re a se the de btor’ s pa ym e nts if the de btor a c q

uire s disposa ble inc om e during the pe nde nc y of the a p plic a ble c om m itm e nt pe riod. C re ditors’ opportunity

to se e k inc re a se d pa

ym e n ts tha

t c orre spond to c ha

n g e d
c irc um s ta nc e s would be unde rm ine d by an inte rpre tation of § 1325(b)(1)(B ) that
re lie ve s de btors from a

m inim um pla n duration m e re ly

be c a use the y have no proje c te d disposa ble inc om e at the tim e of pla n c onfirm at ion. 7 Inte rpre ting § 1325(b)(1)(B ) to im p ose a m inim um pla n duration is a lso
c onsiste n t with thepre v a iling interpre t a tion in our c irc uit of §§ 1328(a ) and 1329(a ). M uc h a s § 1329(a ) pe rm its m odific a tion until " c om ple tion of pa

y m e nts unde r [the ] pla

n," § 1328(a ) e ntitle s the de btor to disc ha rge " a fte r c om

p le tion by

7 This c onc lusion is bolste re d by the se c tions of theC ode tha t a llow c re ditors to m onitor a de btor’ s fina n c ia l situa

tion during the

ba nkruptc y . For insta

n c e , C ha pte r 13 de btors, upon re q

ue st, m u st provide post-pe tition reports of the am ount and sourc e s of the ir inc om e , se e 11 U.S.C . § 521(f)–(g), a nd the " obvious purpose of this se lf-re porting obliga t ion is to provide

inform a tion ne e de d by

a [c re ditor] to de c ide whe the r to proposehostile§ 1329 pla n m odific a tions," Fridle y , 380 B .R . at 544. The purpose of the s e m onitoring provisions would be unde rm ine d

if e a c h pla n did not ha

ve a m inim um duration. 12the d e btor of a ll pa ym e nts unde r the pla

n ." In Fridle y , the Ninth C irc uit B ankruptc y

Appe l late Pane l (" B AP" ) c onside re d whe n a pla n is " c o m ple te d " for purpose s of § 1329(a ) a

nd § 1328(a). The de btors in tha t c a s e ha d not pa id a ll
a llowe d unse c ure d c la i m s in full, but sought disc ha rge a fte r pre pa

y ing the pa ym e nts tha

t the y we re re quire d to m ake unde r the ir c onfirm e d pla n. Fridle y , 380 B .R . at 540. The B AP rule d tha

t the de btors we re not e ntitle d to disc ha rge be c a use

" pre p ay m e nt doe s not ‘ c om

ple te ’ [a ] pla

n for purpose s of §§ 1328(a) or 1329." Id.
a t 545. R a the r, it he ld, " [t] he ‘ a pplic a b le c om m itm e nt pe riod’ in § 1325(b) is a te m pora l re quire m e nt . . . [a

n d] the sta

tutory c onc e pt of ‘ c om

ple tion’ of pa

ym e nts inc l ude s the c om

ple tion of there quisite pe riod of tim e ." Id. at 546. The B AP
re a c he d tha

t c onc lusion e ve n though tha t c a se , like this one , involve d de btors who ha d no proje c te d disposa

ble inc om e and for whom § 1325(b)(1)(B ) a c c o rdingly would pe rm it m onthly

pa ym e nts of $0 to unse c ure d c re ditors. Id. a t 540. B e c a use the te xt of § 1325(b) is a m biguous, wea lso look to le gisla tive history in c onstruing its te

m pora l re quire m e nt. Se e W i lson v. C om m ’ r, 705 F.3d 980, 987–88 (9th C ir. 2013) (holding tha t we m ay c onsult le g isla

tive history

a s a n
a id to theinte rpre t a tion of a m biguous te xt). C ongre ss a m e nde d § 1325(b), a dding the s tat utory te xt c onc e rning the " a

pplic a ble c om m i tm e nt pe riod" tha

t is a t issue he re , in the B ankruptc y

Abuse Pre ve ntion a

nd C onsum e r Prote c tion Ac t of 2005
13(" B APC PA" ), Pub. L. No. 109-8, § 318, 119 Sta t. 23. The le gisla

tive history

of B APC PA supports our inte rpre tation of § 1325(b)(1)(B ) a s re q u iring a m inim um pla n duration: Chapte r 13 Plans T o H ave a 5–Ye ar Dur a tion in Ce r tain Case s. Para gra

ph (1) of se c tion 318 of the Ac t a m e n ds B ankruptc y C ode se c tions 1322(d) a

nd 1325(b) to spe c ify that a c ha pte r 13 pla

n m ay not providefor pa

ym e nts ove r a

pe riod tha

t is not le ss tha

n five y e ars if the c urre nt m onthly inc om e of the de btor a

nd the de btor’ s spouse c om

bine d e xc e e d s c e rta in m one ta ry thre sholds. If thec urre nt m onthly inc om e of the de btor a

nd the de b tor’ s spouse fa ll be low the s e thre sholds, the n the duration of the pla n m ay not be longe r tha

n thre e y e ars, unle ss the c o urt, for c a use , a pprove s a longe r pe riod up to five y e ars. The a

pplic a ble c om m itm e nt pe riod m ay

be le ss if the pla

n provide s for pa

ym e nt in full of all a llowe d unse c ure d c la im s ove r a shorte r pe riod. Se c t ion 318(2), (3), a nd (4) m ake c onform ing am e ndm e nts to se c t ions 1325(b) a nd 1329(c ) of the B an kruptc y C ode
. H.R . R e p. No. 109–31(I), § 318, a t 79 (2005), reprinte d in 2005 U.S.C .C .A.N. 88, 146 (boldfa c e t

y p e a dde d ). Although the

quote d se c tion of theHouse R e port is
c onfusingly

worde d , its title

sugge sts tha

t a bove -m e d i an de btors a

re to be he ld to a five -y e ar m inim

um pla n duration without re ga

rd to the ir e xpe nse s or disposa ble inc o m e , unle ss the y

pa y unse c ure d c la im s in full ove r a shorte r pe riod. Fina lly , our inte rpre tation of § 1325(b)(1)(B ) is c o nsiste nt with the polic ie s that unde rlie the B an kruptc y

C ode and the B A PC PA am e ndm e nts. " The princ ipa l purpose of the B ankruptc y C ode is to gra

nt a ‘ fre sh sta rt’ to the ‘ hone st but unfortuna te de btor.’ " M arra m a

v. C itiz e ns B ank, 549 U.S. 365, 367 (2007)

14(quoting Groga n v. Ga rne r, 498 U.S. 279, 286, 287 (1991)). B ut tha t ge ne ra lity

is not the e nd of the story . W e have re c ogniz e d tha t ba nkruptc y a l so se rve s the

" ofte n c onflic ting" polic y of prom oting c re ditors’ inte re s t in re pa ym e nt. Dum ont v. Ford M otor C re dit C o. (In re Dum ont), 581 F.3d 1104, 1111 (9th C i r. 2009); se e
a lso R a nsom v. FIA C a

rd Se rvs., N.A., 131 S. C t. 716, 729 (2011) (de sc ribing

" B APC PA’ s c ore purpose [a s] e nsuring tha t de btors de vote the ir full disposa ble inc o m e to re p ay ing c re ditors" ). The im position of a

m inim um durat ion is
c onsiste n t with both of those polic ie s: B y

e nsuring theava i la

bility of pla n
m odific a tion ove r the a

pplic a ble c om m itm e nt pe riod, e v e n whe n the de btor c annot
m ake any pa ym e nts a t the outse t, our re a ding pe rm its C ha pte r 13 to ope ra te a s a
m e c ha nism for re pa ym e n t ove r tim e by wa g e e arne rs, in a c c orda n c e with the ir
a c tua l a bility to pa y . Se e ge ne ra lly

8 C ollie r on B ankruptc y

¶ 1300.02 (Ala

n N. R e snic k & He nry J. Som

m e r e ds., 16th e d. 2012). In La nning, theSupre m e C ourt re l ie d in pa rt on simila

r c onside ra t ions in
re je c ting a n inte rpre tation of § 1325(b) tha t would re quire c ourts to c a lc ulate proje c te d disposa ble inc om e u s ing a

" m e c h anic a l a

p proa c h" tha

t de pe nds only

on a de btor’ s c urre nt m onthly

inc om e during the six-m onth pe riod pre c e ding the ba nkruptc y filing da te . 130 S. C t. at 2469–70. The C ourt fa vore d a " forwardlooking" a

pproa c h tha

t ta ke s into a c c ount known or ne a rly c e rta in inform a tion
15a

bout c ha nge s in a de btor’ s e arning powe r during the pla n pe riod. Id. a

t 2475. The polic y justific a tion for looking to future e arnings is tha

t a fa ilure to do so " would de ny c re ditors pa

ym e nts tha

t the de btor c o uld e a s ily

m ake ." Id. at 2476. In other words, the sta

t ute is m e ant to a l low c re ditors to re c e ive inc re a se d pa y m e nts from de btors whose e a

rnings ha ppe n to inc re a s e . La

nning involve d pre -c onfirm a tion
a djustm e nts to pla

n pa ym e nts, " to a c c ount for known or virtua lly c e rta in c ha

nge s" in a de btor’ s inc om e . Id. at 2475. B ut the sam e logic pe rsua de s us tha t C ongre ss inte nde d § 1325(b)(1)(B ) to e nsure a pla n duration tha

t give s m e aning to § 1329’ s
m odific a tion proc e dure a s a m e c ha nism for post-c o nfirm a tion a djustm e nts for unfore se e n inc re a s e s in a

de btor’ s inc om e . Tha

t m e c ha nism will a c hie v e its purpose m ost e ffe c tive l y

if the C ha

pte r 13 pla

n ha s a m inim

um duration within whic h m o dific ation is possible . Ac c ordingly , the polic y tha t unde rlie s La

nning
a lso supports our re a ding of § 1325(b)(1)(B ). III. C onc lusion In sum m ary , we hold tha

t a ba nkruptc y c ourt m ay

c onfirm a C ha pte r 13 pla

n unde r 11 U.S.C . § 1325(b)(1)(B ) only if the pla n’ s dura tion is a t le a st a s long a s the
a pplic a ble c om m i tm e nt pe riod provide d by § 1325(b)(4). Ac c ordingly , we
ove rrule Ka ge n ve a

m a ’ s holding re ga

rding the m e aning of " a

p plic a ble c om m itm e nt pe riod" and a ffirm

the ba n kruptc y c ourt’ s ruling. The m andate sha ll issueforthwith. 16AFFIRM E D.

17C OUNSEL

Eliz a be th A. Sc hne ide r, Offic e of R o d Da nie lson, C h a

p te r 13 Truste e , for Truste e -Appe lla

nt. R obe rt J. Pfiste r (a rgue d), Kle e , Tuc hin, B ogda noff & Ste rn LLP, Los Ange l e s, C a l ifornia , a

n d Na nc y B . C la rk, B o rowitz& C la

rk, LLP, W e st C o vina , C a lifornia , for De btors-Appe lle e s. W illia m Andre w M c Ne a l (a

rgue d ) and Gilbe rt B . W e i sm an, B e c k e t & Le e LLP, M a lve rn, Pe nnsy lva nia , for Am ic i C uria e Am e ric an Expre ss Tra ve l R e late d Se rvic e s C o., Inc ., Am e ric an Expre ss B ank, FSB , a nd Am e ric an Expre ss C e nturion B ank; a nd Ta ra Twom e y , Nationa l C onsum e r B a nkruptc y R ights C e nte r, San Jose , C a lifornia , for Am i c us C uria e Nationa l Assoc iation of C onsum e r B ankruptc y Attorne y s.

18Danie lson v . Flore s (In reFlore

s) , No. 11-55452 PR E GER SON, C irc uit Judge , disse nting, with whom KOZINSKI, C h ie f Judge , joins: The m a

jority ove rrule s our holding in Mane y v . K age nv e a ma tha

t the C ha pte r 13 “ a pplic a ble c om m itm e nt pe riod” doe s not m andat e a five -y e ar pla

n le ngth for a

bove m e dia

n de btors with no proje c te d disposa ble inc om e . 541 F.3d 868, 876 (9th C ir. 2008). The m a jority ’ s inte rpre tation of 11 U.S.C . § 1325(b)(1)(B ) prom ote s goa ls tha t a re a t odds with C ongre ss’ s purpose whe n it
e na c te d C ha

pte r 13 to “

p rovide the de btor with a

fre sh sta rt.” H.R
. RE P . N O . 95- 595, a t 117 (1977), r e

printe d in 1978 U.S.C .C .A.N. 5963, 6079. The m a jority a lso
re a d s la ngua ge into C ha

p te r 13 ba nkruptc y la w tha t is not pre se nt in thepla in te xt of § 1325(b)(1)(B ). I. B ankr uptc y ’s Pur pose is to Pr ovide De btor s w ith a Fr e sh Star t C ongre ss e na c t e d the B ankruptc y R e form Ac t of 1978, Pub. L. No. 95-598, 92 Sta t. 2549 to m a k e “ ba

nkruptc y a m ore e ffe c tive re m e dy

for the unfortuna

te
c onsum e r de btor.” H.R
. RE P . N O . 95-595, a t 4 (1977). At the

tim e , C ongre ss lam e n te d tha

t “ [e ] xte nsions on pla

ns, ne wc a s e s, a

nd ne wly inc urre d de bts put
som e de btors unde r c ourt supe rvise d re p aym e nt pla ns for se ve n to te n y e ars.” Id.
a t 117. C ongre ss we nt on to sa y tha t suc h le ngthy

re pa ym e nt pla ns we re “ the
c lose st thing there is to inde nture d se rvitude .” Id. C ongre s s sta te d tha t 

# F IL ED
AUG 29 2013 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS“ ba

nkruptc y re lie f should be e ffe c tive , a nd should prov i de thede b tor w ith a fre sh start .” Id. (e m

pha sis a d de d). C ha

pte r 13 ba nkruptc y wa s inte nde d to be he lpful to de btors a nd c re ditors. Debtors a

re a ble to pre se rve e xisting a sse ts if the y c o m ple te
a re p aym e nt pla

n unde r the supe rvision of a C ha pte r 13 truste e . S C O T T E T A L ., 8 C O LLI E RO N B A N K R U P T C Y 1300-12 (Lawre nc e P. King e t a l. e ds., 15th e d. re v. 2007). C re ditor inte re sts a re prom ote d

through re c ove rie s from

future inc om e tha

t
are n ot a va ila ble in C ha

pte r 7 liquida

tion. Id. C ongre ss upda

te d the ba nkruptc y la ws for the first tim e sinc e 1978 with the B ankruptc y

Abuse Pre ve ntion a

nd C onsum e r Prote c tion Ac t of 2005, Pub. L. No. 109-8, 119 Sta

t. 23 (2005). At the la

w’ s signing, Pre side nt Ge orge W . B ush
re ite ra te d m any

of the purpose s e xpre sse d by C ongre ss in 1978: Our ba nkruptc y la ws a re an im porta nt pa rt of the sa fe t

y ne t of Am e ric a . The

y giv e those

w ho c a n not pay

the ir de bts a fre

s h start
. . . . Unde r the ne w la

w, Am e ric ans who ha

ve the a bility to pa

y will be re quire d to pa

y ba c k a t le a st a portion of the ir de bts. Those who fa ll be hind the ir sta

te ’ s m e dia

n inc om e will not be re quire d to pa y ba c k the ir de bts. . . . Thea c t of C o ngre ss I sign toda y will prote c t those who le gitim a te ly

ne e d he lp, stop those

who try to c om

m it fra ud, a nd bring gre a te r sta

bility and fa irne ss to our fina

n c ia l sy ste m . Pre ss R e le a se , White House Pre ss Offic e , Pre side nt Signs B ankruptc y Abuse Pre ve n tion, C onsum e r Prote c tion Ac t (Apr. 20, 2005), re printe d in 2005 U.S.C .C .A.N. S7, 2005 (e m pha sis a dde d).

2II. T he Applic able Com m itm e nt Pe r iod doe s not M andate a Five -Ye a r

Chapte r 13 Plan for De btor s w ith no Pr oje c te d Disposable Inc om e Unlike the m a

jority , I inte rpre t § 1325 to me an tha t the a pplic a ble
c om m itm e nt pe riod in whic h de btors a re re quire d to distribute

proje c te d disposa ble inc o m e to unse c ure d c re d i tors a pplie s only to de btors with proje c te d disposa ble inc o m e . C ha pte r 13 ba nkruptc y , a s e na c t e d in the B an kruptc y R e form Ac t of 1978,
a llows a de btor to usefuture i nc om e to pa y off de bt, while a llowing he r to ke e p he r
a sse ts. Se e H.R
. RE P . N O . 95-595 a t 118 (1977); se ealso 8 S C O T T E T A L ., supra , at 1300-12. A C h a

pte r 13 de btor is de s igna

te d “ a bove m e dia

n” whe n he r annua liz e d

“ c urre nt m o nthly

inc om e ,” 11 U.S.C . § 101(10A), is gre a te r tha n the y e arly

“ m e dia n fam ily inc om e ” in he r state . 11 U.S.C . § 1325(b)(2)-(3); 11 U.S.C
. 101(10A). The Flore se s a re a bove m e dia

n de btors. W

he n a n a bove m e dia

n C ha pte r 13 de btor’ s m onthly e xpe nse s a re gre a te r tha

n he r m onthly

inc om e a s
c a lc ulat e d unde r 11 U.S.C . § 707(b)(2)(A)-(B ), she is de e m e d to ha ve no proje c te d disposa ble inc om e . Se e 11 U.S.C . § 1325(b)(3). He re , it is undispute d tha t the Flore s e s’ e xpe n se s a

re gre a te r tha

n the ir inc om e and tha

t the y have no proje c te d disposa ble inc om e . A C h a pte r 13 de btor is sole ly

re sponsiblefor filing a

propose d pa

ym e nt 3pla

n . 11 U.S.C
. § 1321. Am ong the re quire m e nts for C ha pte r 13 pla

n s a re : tha t the p la n is propose d a

nd the pe t ition is file d

in good fa ith; tha

t the holde rs of
se c ure d c la im s a

pprove of the pla

n; tha t the de btor will bea

ble to m a k e a ll pa ym e nts unde r an d c om

ply with the pla

n; a nd tha t the tota l pa

ym e nts to be m a de unde r the pla

n a re not le s s tha

n the am ount tha

t would bepa i d if the e sta te of the de btor we re liquida

te d unde r C h a

pte r 7. 11 U.S.C . § 1325(a )(3)-(7). Above
m e dia n de btors a

re instruc te d tha

t “ the [C ha

pte r 13] pla

n [the y propose ] m ay

not provide for pa

y m e nts ove r a

pe riod tha

t is longe r tha

n five y e ars.” 11 U.S.C . § 1322(d)(1). The Flore se s propose d a

thre e -y e ar pla

n during whic h the y

would m ake
m onthly pa ym e nts of $122. The

truste e obje c te d to the Flore s e s’ propose d pla n on the g round tha

t the pla n should ha

ve re quire d

pa ym e nts for five y e a

rs, ra t he r tha n thre e y e ars. The ba

n kruptc y judge inc re a se d the m onthly pa y m e n ts to $148 a

nd the l e ngth of the pla

n to five y e ars; the m one ta ry inc re a se is not c onte ste d on
a ppe a l. It is undispute d that the Flore se s’ thre e -y e ar C ha pte r 13 pla

n wa s propose d in good fa ith, tha

t the Flore se s a

re a ble to c om

ply with the pla

n, a nd tha t the Flore s e s a re pa y i ng m ore t

ha n the y would be if the y

liquida te d the ir a sse ts unde r C ha pte r 7. It is a lso undispute d tha t the Flore se s’ thre e -y e ar C ha p te r 13
4ba

nkruptc y pla n wa s le ss tha

n five y e ars pursua

nt to § 1322(d)(1). If a truste e or unse c ure d c re ditor obje c ts to a de btor’ s C ha

pte r 13 pla

n, the ba nkruptc y c ourt m ay

not a pprove the pla

n unle s s “ the pla

n provide s tha

t a l l of the de btor’ s proje c te d disposa ble inc om e to be re c e ive d in the a pplic a ble c om m itm e nt pe riod . . . will be

a pplie d to m a ke pa

ym e n ts to unse c ure d c re ditors unde r the pla n .” 11 U.S.C . § 1325(b)(1)(B ). The a pplic a ble c om m itm e nt pe riod is thre e y e ars for de btors with be low m e dia n inc o m e and five y e a

rs for de btors with a

bove
m e dia n inc o m e . 11 U.S.C . § 1325(b)(4)(A). B e c a use the Flore se s a

re a bove
m e dia n de btors, the i r c orre sponding a pplic a ble c om m itm e nt pe riod is five y e ars. The Flore se s, howe ve r, have no proje c te d disposa ble inc om e . Thus, theFlore se s will c ontribute no proje c te d disposa ble inc om e to unse c ure d c re d itors ove r the ir five y e ar a

pplic a ble c o m m itm e nt pe riod. C ourts ha

ve a pproa c he d the a

pplic a b le c om m itm e nt pe riod in se ve ra l diffe re nt wa

y s. Som e c ourts, suc h a s the m a jority he re , e ndorse what

is c a lle d the te m pora l a p proa c h, whe re the a

pplic a ble c om m itm e nt pe riod is tre a te d

a s a tim e
re quire m e nt for C ha

pte r 13 pla

n le ngth. This a

pproa c h ha s be e n

e ndorse d by

the Sixth, Eighth, a

nd Ele ve nth C irc uits, a

nd distric t c o urts in theFifth, Se ve nth, a nd Te nth C irc uits. Se e Baud v . C arroll , 634 F.3d 327 (6th C ir. 2011); In re Te nny son ,
5611 F.3d 873 (11th C ir. 2010); In re Fre de ric k s on , 545 F.3d 652 (8th C ir. 2008); In re M artin , 464 B .R . 798 (C .D.Ill. 2012) ; In re W ing , 45 B .R
. 705 (D. C o. 2010) ; In re M e adow s , 410 B .R . 242 (N.D. Tx. 2009). Othe r c ourts ha

ve e n dorse d the
m one ta ry a pproa c h, whe re de btors c o ntribute a se t a m ount of m one y

in a tim e pe riod tha

t m ay be shorte r tha

n the a pplic a ble c om m i tm e nt pe riod. This a

pproa c h ha s be e n e ndorse d

by distric t c ourts in theSe c o nd a nd Third C irc uits. S

e e In re Gre e n , 378 B .R . 30 (N.D.N.Y. 2007); In reVidal , 418 B .R . 135 (M .D. Pa . 2009) 

### . I c ontinue to e ndorse the hy brid a pproa c h we e ndorse d

in K age n v e a ma and in the origina l Flore

s opinion. Under that a

pproa c h, “ t

he ‘ a pplic a ble c om m itm e nt pe riod’ se ts the m inim

um te m pora l dura

tion of a pla

n, but it is ina

pplic a ble to a pla n subm itte d . . . by

a de btor with no ‘ p roje c te d disposa ble inc om e .’ ” Danie lson
v . Flore s , 692 F.3d 1021, 1027 (9th C ir. 2012). The C ha pte r 13 “ a pplic a ble c om m itm e nt pe riod” doe s not e xplic i tly a pply to de btors who qua lify

for C ha pte r 13 ba nkruptc y but ha

ve no proje c t e d disposa

ble inc o m e . The m a

jority c onc lude s, howe ve r, tha

t the “ a p plic a ble c om m itm e nt pe riod” should de te rm i ne the re quisite le ngth of a C h a pte r 13 pla

n for a ll de btors, whe the r or not the y have proje c te d disposa ble inc om e . The m a

j ority disre ga

rds the portion of § 1325(b)(1)(B ) that tie s the “ a pplic a ble c o m m itm e nt pe riod” to the
6pe riod of tim e whe n proje c te d disposa

ble inc om e is suppose d to be distribute d to
unse c ure d c re ditors. Unde r § 1325(b)(1)(B ), the ba n kruptc y c ourt m ay

not
a pprove the pla

n unle ss “ the pla

n provide s tha

t a ll of the de btor’ s proje c te d disposa ble inc om e to be re c e i ve d in the a pplic a ble c o m m i tm e nt pe riod . . . will be
a pplie d to m a

ke pa ym e nts to unse c ure d c re ditors unde r the pla n.” B y doing so, the
m a jority inte rpre ts § 1325(b)(1)(B ) to sa y tha t whe n a truste e obje c ts to a

C ha pte r 13 pla n, the ba nkruptc y c ourt m ay

not a pprove the pla

n unle ss “ the pla

n provide s that a ll of the de b t or’ s [C ha

pte r 13 pay me nts ] to be re c e ive d in the a pplic a ble
c om m itm e nt pe riod . . . will be a pplie d to m ake pa

y m e n ts to unse c ure d c re ditors unde r the pla

n.” § 1325(b)(1)(B ). The m a jority ’ s re a ding of § 1325(b)(1)(B ) is a t odds with the

provision’ s pla i n la ngua ge . A de btor’ s pa

ym e nts unde r a

C h a pte r 13 ba n kruptc y pla n a re diffe re nt tha

n the disposa

ble inc om e a

de btor is proje c te d to e arn ove r a pe riod of y e ars. Afte r the B ankruptc y Abuse Pre ve ntion a

nd C onsum e r Prote c tion Ac t of 2005 (B APC PA), a

de btor doe s not ne e d to ha ve proje c te d disposa

b le inc om e to qua lify for, a n d m a ke pa y m e nts unde r, a C ha

pte r 13 ba nkruptc y pla n. Se eHe nry E. Hilde brand II, Impac t of the Bank r uptc y Abuse Pre v e ntion and C

onsume r Prote c tion Ac t of 2005 of C h a pte r 13 Truste e

s , 79 A M . B A N K R . L.J. 373, 389
7(2005) (“ The form ula utiliz e d in the m e ans te s t [to de te rm ine proje c te d disposa ble inc o m e ] ha s no re lation to the propose d pla

n a nd be a rs no re l a tionship to the
am ount of m one y that a c tua lly m ay be av a ila ble from a de btor for pa

y m e n ts to
unse c ure d c re ditors if a

pla n is c onfirm e d .” ). Nor is the re any

indic a t ion from

C ongre ss tha

t the sta tutory diffe re nc e be twe e n proje c te d disposa ble inc om e and C h a

pte r 13 pla

n pa ym e nts wa s a

n uninte nde d c onse que nc e or ove rsight. S e e Susa n Je nse n, A Le

gislativ e History

of the B ank ruptc y Abuse P re v e ntion and C

onsume r Prote c tion Ac t

of 2005 , 79 A M . B A N K R . L.J. 485, 567-68 (2005) (e xpla ining tha t, like the B an kruptc y

R e form Ac t of 1978, the B APC PA of 2005 wa s a dopte d in the a bse n c e of e c onom ic de pre ssion
and pa nic , a nd is the c u lm ination of ne arly te n y e ars of work, involving hundre ds of pa rtic ipa nts) (c ita tion om itte d). The m a jority c onc lude s tha

t the e xc e ption pe rm itting a shorte r a pplic a ble
c om m itm e nt pe riod unde r § 1325(b)(4)(B ) doe s not a pply to the Flore se s. The
m a jority ’ s c onc lusion is c o rre c t, but them a jority ’ s re a soning is fla

we d. The
m a jority unde rsta nds shorte ning the a

pplic a ble c om m itm e nt pe riod to be the sa m e thing a s shorte ning the le ngth of the pla n. The e xc e ption re a ds: [The a pplic a ble c o m m itm e nt pe riod] m ay

be le ss tha

n 3 or 5 y e ars . . . only if the pla n provide s for pa

ym e nt in full of all a llowe d unse c ure d 8c la im s ove r a shorte r pe riod.

Id. The m a

jority re a sons tha

t the Flore s e s m a

y not proposea

pla n with a n
a pplic a ble c om m i tm e nt pe riod tha

t is shorte r tha

n five y e ars be c a

use the Flore se s have not propose d a

pla n in whic h the ir unse c ure d c la im s will be pa id in full. Unde r a re a ding of the pla in te x t of the sta tute , howe v e r, the e x c e ption is ina p plic a ble to the Flore se s. B e c a

use the Flore se s have no proje c te d disposa ble inc o m e to distribute

to unse c ure d c re ditors during the a pplic a ble c om m itm e nt pe riod, the re is no a

pplic a ble c o m m i tm e nt pe riod tha

t a p plie s to the m . Thus, the§ 1325(b)(4)(B ) e x c e ption ha s no be aring on the le ngth of the pla n the Flore s e s m ay propose . The m a jority ’ s c onc e rn tha

t only a m andatory

m inim um pla n duration will

“ a l low c re ditors to re c e ive inc re a se d pa ym e nts from

de btors whose e arnings ha ppe n to inc re a se ” is unfounde d. M a j. 16. As a

bove m e dia

n de b tors with no proje c te d disposa ble inc om e , the Flore se s a re bound by

se ve ra l sta

tutory
re quire m e nts tha

t a re he lpful to c re ditors: tha t the ir pla n be propose d in good fa ith; that the y are a ble to c o m

ply with the pla

n a nd m ake a ll pa

ym e nts; a nd tha t the y pa y
m ore in C ha

p te r 13 ba n kruptc y tha n the y would in C ha

pte r 7 ba nkruptc y . M ore o ve r, the Flore se s’ pla n m ay be m odifie d a fte r the pla n is c onfirm e d, but
9be fore pa

ym e nts a re c om ple te d, by the de btor, truste e , or the holde r of an a llowe d
unse c ure d c la im
. 11 U.S.C
. § 1329(a ). The pla n m a y be m odifie d to: (1) inc re a se or re duc e the am ount of pa ym e nts on c la im s of a pa rtic ula r c la ss provide d for by

the pla n; (2) e xte n d

or re duc e the tim e for suc h pa ym e nts; (3) a lte r the a m ount of the distribution to a c re d itor whose c l a im

is provide d for by

the pla n to the e xte nt ne c e ssa

ry to ta ke a c c ount of a

ny pa ym e nt of suc h c la im

othe r tha n unde r the pla

n; or (4) re duc e am ounts to be

pa id unde r the pla

n by the a c t ua l am o unt e xpe nde d by

the de btor to purc ha se he a l th insura nc e . Id. Se c tion 1329(c ) re ite ra te s tha t e v e n though a

pla n m ay be e xte nde d a fte r it is
c onfirm e d, a “ c ourt m ay

not a pprove a [C ha pte r 13 pla

n] pe riod tha

t e xpire s a fte r five y e ars.” The re is no sta

t utory la ngua ge to support the

m a jority ’ s finding tha

t whe n Truste e Da

nie l son obje c te d to the Flore se s’ propose d pla n le ngth of thre e y e ars, the ba nkruptc y c ourt wa s sta

tutorily prohibite d from a

pproving a

pla n shorte r tha

n five y e ars in le ngth. CO NCL USIO N Unde r the m a

jority ’ s re a ding of § 1325(b)(1)(B ), a bove m e dia

n de btors with no proje c te d disposa

ble inc om e will be forc e d to proposefive y e ar pla ns in
c ontra ve ntion of C ongre ss’ s purpose whe n it im ple m e n te d C ha

pte r 13 to m ake

“ ba nkruptc y a m ore e ffe c tive re m e dy

for the unfortuna

t e c onsum e r de btor.” H.R
. 1 0RE P . N O . 95-595, a t 5966 (1977). The

m a jority m isre a ds § 1325(b)(1)(B ) to
re quire tha

t the ba nkruptc y c ourt a pprove a C ha pte r 13 pla

n only if a l l of a de btor’ s C ha pte r 13 pa ym e nts— ra the r tha n proje c te d disposa

b le inc om e
—

will be re c e ive d during the a

pplic a ble c om m itm e nt pe riod. Afte r Truste e Da

nie lson obje c te d to the Flore s e s’ propose d pla n, the ba nkruptc y c ourt wa s not sta

tutorily pre c lude d from

a pproving theFlore se s’ thre e y e ar C h a p te r 13 re pa

ym e nt pla n. The re fore , I re spe c tfully disse nt.

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