Baud v. Carroll

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In Baud v. Carroll, 634 F.3d 327 (6th Cir.2011), the Sixth Circuit considered a claim made by a Michigan trustee under similar circumstances. The Baud trustee was also trying to convince the court to recognize social security benefits as projected disposable income. See id. at 330.

Baud v. Carroll, 2011 U.S. App. lexis 2182 (6th Cir. Mich. 2011). Where a Chapter 13 plan does not propose to pay unsecured creditors in full and an objection to confirmation is filed, a debtor with positive projected disposable income must propose a plan which extends for the applicable commitment period.

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Today the Supreme Court denied certiorari in the case of Baud v.Carroll, which raised the issue of the appropriate applicable commitment period for an above-median income debtor with no "projected disposable income." The Sixth Circuit Court of Appeals held below that above-median income debtors with no projected disposable income must propose five year plans if the trustee or unsecured.

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V. Conclusion For the foregoing reasons, the Bankruptcy Court’s February 14, 2009 order confirming debtors’ amended Chapter 13 plan is REVERSED and the case is REMANDED to the Bankruptcy Court to allow Debtors to modify their amended Chapter 13 plan in a manner consistent with this opinion.

The Sixth Circuit in Baud v. Carroll similarly concluded that "a debtor with zero or negative projected disposable income may propose a confirmable plan by making available income that falls outside of the definition of disposable income . . . ."

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See Kibbe v. Sumski (In re Kibbe ), 361 B.R. 302, 311-12 (1st Cir.BAP 2007) ("[I]n its adherence to Schedule I, the bankruptcy court abandoned the new definition for `disposable income.’ But Congress apparently intended to exclude certain categories of income when it defined `disposable income’ generally and then in the chapter 13 context.

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