Foreword to Third Edition

• Jurisdiction: United States

Foreword to Third Edition

In revising Tom Yerbich's text in the Second Edition, the authors have tried to maintain the original format and spirit of the book while providing updated information on the changes in the law since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8, 119 Stat. 23 (BAPCPA). Many of the issues Tom foresaw are today's most litigated questions. For example, appellate reviewers are, or may soon be, considering whether the applicable commitment period requirement for a chapter 13 plan applies to a debtor whose disposable income is zero or less; whether a chapter 13 debtor must include Social Security income in her projected disposable income notwithstanding that the Code specifically excludes it from current monthly income; whether a chapter 13 debtor whose car or house payment is less than the IRS standard amount may expense the standard or only her actual payment when calculating her projected disposable income; and whether a debtor who owns an older car outright may expense a vehicle ownership allowance permitted by the IRS, albeit not found in their allowance standards.

A few contested issues have found resolution by the U.S. Supreme Court, which decided two cases bearing on the calculation of a chapter 13 debtor's projected disposable income that must be paid into a plan. One of the cases analyzed the topic more broadly, and the other decided a more narrow question about the permissibility of a virtually ubiquitous expense: that of owning or leasing a car. On June 7, 2010, the Supreme Court decided Hamilton v. Lanning,¹ opining, "When a bankruptcy court calculates a debtor's projected disposable income, the court may account for changes in the debtor's income or expenses that are known or virtually certain at the time of confirmation."² On Jan. 11, 2011, the Court decided Ransom v. FIA Card Servs. N.A.,³ holding that a debtor who owns a car unencumbered by loan or lease shall not expense an allowance for car ownership costs in the means test.

On other topics, in Milavetz, Gallop & Milavetz, P.A. v. United States,⁴ the Court decided that a debt relief agency, including an attorney advising a consumer debtor, may not advise an assisted or prospective assisted person to incur more debt when the impelling reason is anticipation of filing bankruptcy (see Chapter IX). Earlier, in Marrama v. Citizens Bank of Massachusetts (In re Marrama),⁵ the Court determined that a chapter 7 debtor does not hold an...