RESPONDENT: Stephanie Kay Lanning
DOCKET NO.: 08-998
DECIDED BY: Roberts Court (2009-2010)
LOWER COURT: United States Court of Appeals for the Tenth Circuit
CITATION: 560 US 505 (2010)
GRANTED: Nov 02, 2009
ARGUED: Mar 22, 2010
DECIDED: Jun 07, 2010
Jan Hamilton - for the petitioner
Sarah E. Harrington - Assistant to the Solicitor General, Department of Justice, for the United States as amicus curiae, supporting the respondent
Thomas C. Goldstein - for the respondent
Facts of the case
A Kansas federal bankruptcy court denied objections to a Chapter 13 debtor's repayment plan. The Bankruptcy Appellate Panel of the Tenth Circuit affirmed the lower court's decision. On appeal, the U.S. Court of Appeals for the Tenth Circuit affirmed, holding that the starting point for calculating a Chapter 13 debtor's "projected disposable income" is presumed to be the debtor's current monthly income. However, the court stated that the calculation is subject to a showing that there is a substantial change in circumstances. The court remanded the case to the bankruptcy court to determine whether the debtor had shown there was a substantial change in her circumstances.
In calculating a debtor's "projected disposable income," may the bankruptcy court consider evidence suggesting that the debtor's income or expenses during that period are likely to be different from the debtor's income or expenses during the pre-filing period?
Media for Hamilton v. LanningAudio Transcription for Oral Argument - March 22, 2010 in Hamilton v. Lanning
Audio Transcription for Opinion Announcement - June 07, 2010 in Hamilton v. Lanning
John G. Roberts, Jr.:
Justice Alito has an opinion in this morning in case 08-998, Hamilton versus Lanning.
Samuel A. Alito, Jr.:
This case comes so us on writ of certiorari to the United States Court of Appeals for the Tenth Circuit.
If an unsecured creditor or a bankruptcy trustee objects to the confirmation of the Chapter 13 debtors plan for the repayment of deaths, 11 U.S.C., Section 1325(b)(1) requires the debtor either to pay unsecured creditors in full or to pay all “projected disposable income” to be received by the debtor over the duration of plan.
We hold that a bankruptcy court may calculate projected disposable income by taking into account foreseeable changes in the debtor's income or expenses.
This approach is consistent with the ordinary meaning of the undefined word projected which does not require courts to assume that a debtor's past income and expenses will necessarily continue unchanged into the future.
It is also consistent with Congress' use of the word projected elsewhere in the United States Code as well as with bankruptcy practice before Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which did not eliminate judicial discretion to take into account known or virtually certain changes in the debtor's income or expenses.
An alternate interpretation of projected disposable income premised upon a mechanical extrapolation of the debtor's past income and expenses into the future would clash with certain terms of Section 1325 and lead to anomalous outcomes in which, in cases in which a debtor experiences unusually high or unusually low income during the period immediately preceding the filing of the petition.
We therefore affirm.
Justice Scalia has filed a dissenting opinion.