Determining When Projected Disposable Income Test May Be a Basis for a Post-Confirmation Modification

(Excerpt) In order for a chapter 13 plan to be confirmed, the plan must provide that the debtor will contribute his projected disposable income towards his plan payments. However, circumstances may change after confirmation of the chapter 13 plan, and the debtor or trustee may find themselves in need to modify the plan payment. Under section 1329 of the Bankruptcy Code, the debtor, trustee, or an unsecured creditor may request to modify the plan after confirmation of the plan but before completion of the payments. Generally, bankruptcy courts have broad discretion to approve or disapprove a post-confirmation modification of a chapter 13 plan. The bankruptcy courts’ broad discretion “must be guided by a respect for the finality of the confirmation process.” The finality of the confirmation process should not be disturbed unless it is shown that the debtor has acted in bad faith, is not in compliance with the plan, or is unable to comply with the plan. However, some courts held that the debtor having an increased projected disposable income may be the basis of a post-confirmation modification