Charles Burnett Johnson and Mary Hester Johnson

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
WILSON DIVISION
IN RE:
RICHARD EUGENE HOWARD AND KATRINA
MILLS HOWARD
ROBERT TYRONE DUDLEY AND DEBRA
MARIE DUDLEY
RAYMOND LEE BOONE
GLENN ALAN HUTCHINSON AND LISA
WINSTEAD HUTCHINSON
JUSTIN ALAN GALEAZZI AND SAMANTHA
GAIL GALEAZZI
WYLIE ROGERS WILLIAMS AND ELOISE
BELLAMY WILLIAMS
CLAXSTON EUGENE SMITH AND LARENE
BATTLE SMITH
DAVID MATTHEW JARRETT AND JENNIFER
LYNN JARRETT
MILTON ROY KELLY AND IDA RUTH KELLY
JEFFREY MERRITT AND TERRY MONIQUE
MERRITT
ADAM RAY BAKER AND SHELIA GAIL
BAKER
CLYDE CARLTON SPENCE AND KAREN
KELLY SPENCE
JOHN LEWIS PERRY
CHARLES BURNETT JOHNSON AND MARY
HESTER JOHNSON
CASE NO:
06-00675-8-RDD
06-01106-8-RDD
06-01107-8-RDD
06-01225-8-RDD
06-01233-8-RDD
06-01258-8-RDD
06-01281-8-RDD
06-01369-8-RDD
06-01376-8-RDD
06-01405-8-RDD
06-01411-8-RDD
06-01464-8-RDD
06-01485-8-RDD
06-01496-8-RDD
SO ORDERED.
SIGNED this 15 day of September, 2006.
________________________________________
Randy D. Doub
United States Bankruptcy Judge
____________________________________________________________
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1The court notes that the practice of the trustee’s motion for confirmation of plan has been the
practice in the Eastern District of North Carolina for many years.
2
MICHAEL KEITH WINDERS AND GAYLE
LETCHWORTH WINDERS
JESSICA LYNN MARKER
WILLIAM JOSEPH SMITH
WILLIAM RANDY HOWELL AND DEBRA
GRIMES HOWELL
HAZEL RUTH REID
DEBTORS
06-01522-8-RDD
06-01571-8-RDD
06-01624-8-RDD
06-01728-8-RDD
06-01768-8-RDD
ORDER REGARDING CONFIRMATION
These cases are before the court on the debtors’ objections to the trustee’s motions for
confirmation. On September 12, 2006, the court conducted a hearing in Wilson, North Carolina.
In each of these cases, the debtor filed a petition pursuant to chapter 13 of the Bankruptcy Code.
Each of the petitions contains a proposed plan submitted by the debtor. After the meeting of creditors
required by 11 U.S.C. § 341, the trustee moved to confirm a plan in each case,most of which proposed
plan payments identical to those proposed by the debtor.1
Thereafter counsel for the debtors filed an objection to the motion for confirmation in each case.
Debtor’s counsel objected to the requirement in the trustee’s plans that the debtors remain in the plans for
a specific period of time. The debtors propose that they be allowed to be discharged from the plan at any
time so long as “all allowed secured, priority, administrative claims required to be paid ‘inside’ the plan,
plus any required dividend to nonpriority, unsecured creditors, are paid
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2The debtors also objected to the re-vesting of property of the estate in the debtor under
certain circumstances. However, this objection was withdrawn by the debtors for further negotiations
with the trustee and therefore is not an issue ripe for decision.
3
in full.” 2 The newly proposed plan terms set out in the objection follow In re Alexander, 344 B.R. 742
(Bankr. E.D.N.C. 2006), which allows debtors to propose plans that may pay little or nothing to unsecured
creditors based on the definition of “projected disposable income.” The cases before the court involve
debtors both above and below the median family income. No objections were filed by unsecured
creditors.
At the hearing, it became apparent that the debtors and the trustee had reached a compromise
regarding the plans pending before the court. The trustee proffered that he would be submitting an
amended motion for confirmation in each case, modifying his originally proposed plan to incorporate the
agreed-upon terms. These modifications would bring the proposed plans into compliance with In re
Alexander, 344 B.R. 742 (Bankr. E.D.N.C. 2006).
11 U.S.C. § 1325(b)(1) states
If the trustee or the holder of an allowed unsecured claim objects to the confirmation of the
plan, then the court may not approve the plan unless, as of the effective date of the plan –
(A) the value of the property to be distributed under the plan on account of such claim is
not less than the amount of such claim; or
(B) the plan provides that all of the debtor’s projected disposable income to be received
in the applicable commitment period beginning on the date that the first payment is due
under the plan will be applied to make payments to unsecured creditors under the plan.
This section requires that, unless the debtor proposes to pay an objecting unsecured creditor’s claim in full,
the debtor must propose to pay into the plan all of the debtor’s projected disposable income for the
applicable commitment period. However, this section only applies if there is an objection to the proposed
plan by the trustee or an unsecured creditor. Based upon the language of § 1325(b) and because there
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3The court recognizes the logistical problems that would result from different opinions regarding
confirmation requirements for chapter 13 plans in the Eastern District of North Carolina and has
considered those potential problems in rendering this decision. However, the court reserves the right to
rule differently if faced with different circumstances, namely a dispute between the trustee and debtor’s
counsel regarding the amount to be committed to unsecured creditors or an objection to the proposed
plan by an unsecured creditor pursuant to 11 U.S.C. § 1325(b).
4The court notes that for below-median debtors, the plans should also conform to Judge
Leonard’s ruling in In re Braswell, No. 06-00318-8-JRL (Bankr. E.D.N.C. August 23, 2006).
END OF DOCUMENT
4
do not appear to be any issues in dispute between the trustee and the debtors regarding confirmation of
these plans, the plans to be proposed by the trustee in his amended motions for confirmation must be
confirmed, absent an objection to any of the amended plans by an unsecured creditor. However, if any
amended plan is objected to by an unsecured creditor, the court will set the objection on for hearing.3 The
court directs the trustee to file and serve upon all required parties in interest and all creditors the amended
motions for confirmation for each case setting forth the terms agreed upon by the trustee and debtors’
counsel, which terms follow the calculation of “projected disposable income” in accordance with In re
Alexander.4
SO ORDERED.
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