Opinion ID: 150901
Heading Depth: 1
Heading Rank: 7

Heading: The Congressional Intent Behind the Bankruptcy Abuse Prevention Consumer Protection Act Supports a Temporal Interpretation of Applicable Commitment Period

Text: While we find that a plain reading of § 1325(b)(4) is more than enough to support Whaley's interpretation of applicable commitment period, we also note that the legislative intent behind the BAPCPA amendments compels the finding that applicable commitment period be read as a temporal requirement for the length of the bankruptcy plan. The heart of [BAPCPA's] consumer bankruptcy reforms ... is intended to ensure that debtors repay creditors the maximum they can afford. H.R. Rep. 109-31(I), p. 2, 2005 U.S.C.C.A.N. 88, 89. The House Report goes on to discuss the BAPCPA amendments to 1322(d) and 1325(b): Sec. 318. Chapter 13 Plans To Have 5-Year Duration in Certain Cases. Paragraph (1) of section 318 of the Act amends Bankruptcy Code sections 1322(d) and 1325(b) to specify that a chapter 13 plan may not provide for payments over a period that is not less than five years if the current monthly income of the debtor and the debtor's spouse combined exceeds certain monetary thresholds. If the current monthly income of the debtor and the debtor's spouse fall below these thresholds, then the duration of the plan may not be longer than three years, unless the court, for cause, approves a longer period of up to five years. The applicable commitment period may be less if the plan provides for payment in full of all allowed unsecured claims over a shorter period. Section 318(2), (3), and (4) make conforming amendments to sections 1325(b) and 1329(c) of the Bankruptcy Code. H.R. Rep. 109-31(I), p. 79, 2005 U.S.C.C.A.N. 88, 146. The applicable commitment period is referenced in the above House notes in a section that is discussing amendments to the duration of Chapter 13 bankruptcy. We believe this reflects Congress' intent that the applicable commitment period be construed as a temporal term, not a multiplier. Further, allowing Tennyson to confirm a plan for less than five years would deprive the unsecured creditors of their full opportunity to recover on their claims from Tennyson by way of post confirmation plan modifications. See 11 U.S.C. § 1329. For example, if Tennyson's projected disposable income were to increase to a positive number in years four or five, § 1329 would allow unsecured creditors to file for a plan modification. However, if Tennyson obtained confirmation of a three-year plan, unsecured creditors would be deprived of an opportunity to collect on their unsecured claims since Tennyson's plan would have terminated prior to year four. The Congressional intent to make sure that debtors repay creditors up to their maximum ability would be contravened by permitting confirmation of a bankruptcy plan for less than five years when unsecured claims have not been paid in full.