Flores v. Danielson

Summarized by:

  • Court: 9th Circuit Court of Appeals Archives
  • Area(s) of Law: Bankruptcy Law
  • Date Filed: 08-29-2013
  • Case #: 11-55452
  • Judge(s)/Court Below: Circuit Judge Graber for the Court; Dissent by Circuit Judge Pregerson; Chief Judge Kozinski; Circuit Judges O'Scannlain, Thomas, Silverman, Wardlaw, Paez, Murguia, Christen, and Nguyen
  • Full Text Opinion

Under 11 U.S.C. § 1325(b)(1)(B), a bankruptcy court may confirm a Chapter 13 plan if it is at least as long as the period set forth in § 1325(b)(4); Maney v. Kagenveama’s holding that “§ 1325(b)(1)(B) does not impose a minimum duration for a Chapter 13 plan” for debtors with no projected income is overruled.

Cesar and Ana Flores (“Debtors”) filed for Chapter 13 bankruptcy and proposed a reorganization plan obligating them to pay $122 per month for three years. The Trustee objected, arguing that 11 U.S.C. § 1325(b) had a five-year minimum duration requirement for those in the Debtors' circumstances. The bankruptcy court sustained and confirmed a five-year plan. The Debtors argued that while their monthly income was "above-median and that subsection 1324(b)(4)(B)'s exception ... does not apply," their three-year plan was nevertheless permissible "because § 1325(b)(1)(B) does not set forth a minimum plan duration for debtors who, like them, have no projected disposable income." On appeal, the Ninth Circuit, reviewing the case en banc, considered two issues: "(1) whether, under § 1325(b)(1)(B), the applicable commitment period acts as a temporal requirement that defines a plan’s minimum duration; and (2) if it does, whether that requirement applies to debtors who have no projected disposable income." Addressing the first issue, the panel held that the statute defines a temporal requirement for confirmation under § 1325(b)(1)(B); this requirement is distinct from a monetary requirement. With regards to the second issue, the panel held "that the temporal requirement of § 1325(b) applies regardless of the debtor's projected disposable income." The panel’s opinion overruled in part Maney v. Kagenveama. AFFIRMED.

Advanced Search