In re Zellmer, 465 B.R. 517, 521–25 (Bankr. D. Minn. 2012) (O’Brien)

Modified plan can reduce amount of monthly payment to reflect higher expenses and loss of income from nonfiling spouse, but reduction of number of monthly payments from 36 to 31 was without cause and violated good faith. Confirmed plan for debtor with CMI less than applicable median family income required monthly payments of $716 for 36 months. Postconfirmation the debtor failed to make five payments because of garnishment of nonfiling spouse’s income and increased expenses. Debtor moved to modify plan to reduce the monthly payment to $500. Modified plan did not provide for payments missed during the five months of default. Trustee objected to modification. “The language in § 1325(b)(1)(B) connecting the duration of the plan (the applicable commitment period) with the due date of the first payment arguably suggests that the number of payments is the core, defining element of plan length. A plan life of thirty-six months creates a schedule for thirty-six payments. The minimum term of a plan and the number of plan payments are the same number. . . . Zellmer’s proposed modified plan provides 31 payments instead of 36 payments as contemplated by the applicable commitment period of 36 months, without cause. . . . Understanding the plan duration limits as based on a number of plan payments and not simply total months of an active Chapter 13 case does not offend the policy of protecting debtors from an enslaving Chapter 13 process of indefinite length; but it does not count months in which payments are not made, unless cause would require otherwise. . . . In the Eighth Circuit, ‘applicable commitment period’ is understood to be a ‘temporal’ requirement when the debtor has actual projected disposable income . . . . To allow Zellmer to confirm the amended plan as proposed presents the same problem occasioned by debtors who would, post-confirmation, seek to ‘pay off’ their Chapter 13 plans with proceeds realized post-confirmation as a result typically of an exempt asset. It would allow evasion of the minimum plan length mandated by the statutory applicable commitment period. . . . For Zellmer, the time period over which payments must be made is thirty-six months. The months during which the case was active but payments were not made do not run against the applicable commitment period. . . . Zellmer has not suffered an ongoing substantial change in circumstances that precludes completion of the applicable commitment period of thirty-six months of payments. . . . [T]he plan proposes to limit total payments to thirty-one months, thereby melting down the overall final percentage distribution to unsecured creditors. . . . [R]educing the total number of plan payments to less than the original applicable commitment term, without cause, is an attempt to unfairly manipulate the provisions of the Bankruptcy Code. While Zellmer has documented an unanticipated substantial change in circumstances affecting his ability to proceed with payments as required under the terms of the original Chapter 13 plan, that does not warrant a reduction in the plan’s duration. There is no cause why Zellmer cannot cure the default of the applicable commitment period by extending the post-confirmation modified plan by five additional months. While the reduction in the amount of each plan payment is reasonable, Zellmer’s good faith is called into question by his willingness to enjoy the benefits of Chapter 13 without contributing his projected disposable income by making the full thirty-six payments of the commitment term.”

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