26 Oct Applicable Commitment Period with No Disposable Income
The Bankruptcy Appellate Panel for the Eighth Circuit recently held that an above-median income debtor’s applicable commitment period is 0 months when the debtor has no disposable income. In re Frederickson, — B.R. —-, 2007 WL 2752769 (8th Cir.BAP 2007).
An applicable commitment period is defined as the period of time that Chapter 13 debtor must pay his disposable income to the bankruptcy trustee for payment to his unsecured creditors. For above-median income debtors the applicable commitment period is usually five years. However, the BAP Panel held that if a debtor has no disposable income, there is no applicable commitment period. Consequently, in circumstances such as these an above-median income debtor can obtain confirmation of a plan that is shorter than five years.
Nicholas Ortiz, Boston Bankruptcy Attorney
Latest posts by Nicholas Ortiz, Boston Bankruptcy Attorney (see all)
- Bankruptcy and Arrest Warrants - August 23, 2013
- Massachusetts Mortgage 150-Day Right to Cure and Bankruptcy - July 23, 2013
- Unauthorized Practice of Law Gains Attention of U.S. Trustee - June 23, 2013
- What is a Prepackaged Chapter 11 Bankruptcy? - May 23, 2013
- Marital Adjustment Allowed to Set Commitment Period - April 25, 2013