The Tenth Circuit issued its opinion in Anderson vs. Cranmer on Tuesday, October 23, 2012.
In 2010, Cranmer filed a petition for relief under Chapter 13 of the Bankruptcy Code. In connection with the petition, he filed a Form 22C (Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income). As allowed, he did not include his Social Security income (SSI) on the Form. Cranmer also filed Schedules I & J. On Schedule I, which represents his monthly income, Cranmer included $1940 of Social Security income. On Schedule J, which represents his monthly expenses, Cranmer deducted a portion of that Social Security income as exempt social security funds. The Chapter 13 repayment plan Cranmer ultimately proposed, therefore, allowed him to keep a portion of his SSI rather than commit it to the repayment of creditors.
The Trustee objected to the plan. While the Trustee acknowledged SSI is excluded from the calculation of current monthly income (Form 22C) he argued SSI should be included in the calculation of projected disposable income, which is based on Schedules I and J. The bankruptcy court denied confirmation of the plan, concluding that SSI must be included in calculation and Cranmer’s failure to do so meant he did not propose his plan in good faith. Cranmer appealed and the district court reversed. The Trustee appealed to the Tenth Circuit.
The Bankruptcy Code does not define “projected disposable income.” The Trustee does not dispute SSI is expressly excluded from disposable income. Instead, he insists that it should be included in the calculation of projected disposable income. Although the term “projected disposable income” is not defined, it incorporates the term “disposable income,” which is defined and which expressly excludes SSI. The mere placement of the adjective “projected” in front of the words “disposable income” does not imbue the term “disposable income” with different substantive components. Thus, the plain language of the Bankruptcy Code demonstrates SSI is excluded from the projected disposable income calculation.
The Tenth Circuit concluded that Social Security income need not be included in the calculation of projected disposable income, and that Cranmer’s failure to include it is not grounds for finding he did not propose his plan in good faith.
The district court’s order is AFFIRMED.