Filed: Oct. 08, 2014
Latest Update: Mar. 02, 2020
Summary: , Debtor Vede Jacob Miller (Miller) timely appealed the bankruptcy courts order, dismissing his Chapter 7 petition after the court determined that, when properly, calculated, Millers current monthly income (CMI) disqualified him from, proceeding under Chapter 7 of the Bankruptcy Code.
FILED
U.S. Bankruptcy Appellate Panel
of the Tenth Circuit
October 8, 2014
Blaine F. Bates
PUBLISH Clerk
UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE TENTH CIRCUIT
IN RE VEDE JACOB MILLER, also BAP No. WY-14-002
known as Jake Miller,
Debtor.
VEDE JACOB MILLER, Bankr. No. 13-20384
Chapter 7
Appellant,
v. OPINION
UNITED STATES TRUSTEE,
Appellee.
Appeal from the United States Bankruptcy Court
for the District of Wyoming
Submitted on the briefs: *
Brad T. Hunsicker of Winship & Winship, P.C., Casper, Wyoming, for Appellant.
Ramona D. Elliott, Deputy Director/General Counsel (P. Matthew Sutko,
Associate General Counsel, and Robert J. Schneider, Jr., Trial Attorney, with her
on the brief) Washington, D.C., and Patrick S. Layng, United States Trustee for
Region 19 (Daniel J. Morse, Assistant United States Trustee, with him on the
brief), Cheyenne, Wyoming, for Appellee.
Before NUGENT, KARLIN, and SOMERS, Bankruptcy Judges.
KARLIN, Bankruptcy Judge.
The issue we face is whether a debtor’s wages need to be both earned and
*
The parties did not request oral argument, and after examining the briefs
and appellate record, the Court has determined unanimously that oral argument
would not materially assist in the determination of this appeal. See Fed. R.
Bankr. P. 8012. The case is therefore ordered submitted without oral argument.
received during the applicable six-month “look-back” period in order to be
included as part of his “current monthly income” under 11 U.S.C. § 101(10A).
Debtor Vede Jacob Miller (“Miller”) timely appealed the bankruptcy court’s order
dismissing his Chapter 7 petition after the court determined that, when properly
calculated, Miller’s current monthly income (“CMI”) disqualified him from
proceeding under Chapter 7 of the Bankruptcy Code. 1 When Miller declined to
convert his bankruptcy case from Chapter 7 to Chapter 13, the bankruptcy court
dismissed his petition. We affirm the dismissal.
I. BACKGROUND
The relevant facts are undisputed. Miller filed his Chapter 7 bankruptcy
petition in April 2013. He claimed the § 707(b) presumption of abuse did not
apply to his bankruptcy filing, under § 707(b)(7)(A), which effectively exempts a
filer from the presumption of abuse if his income is less that the median income
for his state and family size. When Miller filed his bankruptcy, he was paid bi-
weekly (26 times annually) and reported gross annual income of $77,705 and
$81,066 in 2011 and 2012, respectively. When he filed, the median income for a
family of three in Wyoming was $73,688; it was $78,733 for a family of four.
Miller’s first Form B22A (the Chapter 7 means test) listed a family size of
3 and a CMI of $4,977, resulting in a calculated annual income of $59,721. Three
months later, Miller filed an amended B22A form, this time claiming a family
size of 4 and a CMI of $6,112—$73,338 annually, still $300 below Wyoming’s
median income for a family of three. The figure was also $5,395 less than the
$78,733 median income for a family of four, the family size Miller claimed on the
amended form. 2
1
Unless otherwise indicated, all statutory references in this decision will be
to the Bankruptcy Code, Title 11 of the United States Code.
2
The UST suggests that Miller changed his family number from 3 to 4
(continued...)
-2-
The United States Trustee (UST) contested Miller’s CMI calculations,
which Miller based on his understanding of the term “current monthly income,” as
defined in § 101(10A). That definition includes, “income from all sources that
the debtor receives . . . without regard to whether such income is taxable income,
derived during the 6-month period.” Miller argued that the “derived during”
language means “earned during,” such that his CMI only need include income he
both received and earned during the look-back period. 3 The UST read the
definition to include all money received during the look-back period, regardless
when it was earned.
These differing definitions led the UST and Miller to dispute the inclusion
of one payment, which Miller received on October 10 in the amount of $2,942.
Those wages were in compensation for work he completed in the two weeks
before commencement of the look-back period—the “10/10 payment.” 4
Eliminating this payment from Miller’s CMI calculation reduced his annualized
2
(...continued)
because his income otherwise would have exceeded the Wyoming median annual
income, even using his calculation. Brief of Appellee Patrick S. Layng, United
States Trustee, at 8. The UST argument is inaccurate. Miller’s amended
calculation reflecting annual income of $73,338 was still below the $73,688
median income for a family of 3 in Wyoming at the time his petition was filed.
http://www.justice.gov/ust/eo/bapcpa/20130401/bci_data/median_income_table.ht
m. Printed copies of this, and all other webpages cited herein, are provided as an
attachment located at the end of this decision. The Court accepts no
responsibility for, and does not endorse, any product, organization, or content at
any hyperlinked site, or at any site to which that site might be linked. The Court
accepts no responsibility for the availability or functionality of any hyperlink.
Thus, the fact that a hyperlink ceases to work or directs the user to some other
site does not affect the Opinion of the Court.
3
The defined look-back period was October 1, 2012, through March 31,
2013.
4
The UST’s analysis of Miller’s pay advices indicates that the pay period
covered by the 10/10 Payment was September 14-30, a period of 17 days. See
Appellant’s Appendix (“Appx”) at 67. Each of Miller’s other checks covered a
14-day period that ended 10 days prior to the payment date. As the 10/10 pay
advice is not contained in the appellate record, the Court assumes the UST’s
stated pay period is simply a transcription error.
-3-
income to nearly $6,000 below the Wyoming annual median for a family of four.
But when the UST included that payment, Miller’s income placed him at above-
median income status. As a result, Miller’s CMI would have resulted in Miller
having to repay (under a 60-month repayment plan required of above median
income debtors) approximately $42,000 to his unsecured creditors. Since he
listed total non-priority unsecured debt of $58,062, creditors would have
potentially received payment of more than 70% of their claims.
Based on this calculation, the UST filed a Statement of Presumed Abuse
pursuant to §§ 707(b) and 704(b)(2), 5 and a motion to dismiss Miller’s case
pursuant to § 707(b)(2) and (3). 6 Miller then filed his own motion for partial
summary judgment, claiming that because the 10/10 payment should be excluded,
he should be allowed to proceed in Chapter 7.
The bankruptcy court agreed with the UST interpretation, holding that all
income received by a debtor in the look-back period must be included in the
calculation of CMI “without relation to when that income was earned.” 7 As a
result, the bankruptcy court dismissed Miller’s case pursuant to § 707(b)(2) 8 when
he declined to convert to a Chapter 13 proceeding.
II. APPELLATE JURISDICTION
This Court has jurisdiction to hear timely filed appeals from “final
judgments, orders, and decrees” of bankruptcy courts within the Tenth Circuit,
5
See Appx at 59.
6
Id. at 60. Section 707(b)(2) is based on a presumption of abuse that arises
from a mathematical calculation of income and expenses, whereas § 707(b)(3)
requires a showing of bad faith but does not require the trustee (or other party in
interest) prove that the debtor exceeded the abuse threshold.
7
Opinion on Motion for Partial Summary Judgment at 7, in Appx at 131.
8
As a result, the bankruptcy court did not reach the UST’s § 707(b)(3) bad
faith claim against Miller.
-4-
unless one of the parties elects to have the district court hear the appeal. 9 A
decision dismissing a bankruptcy case is a final order for purposes of appeal. 10
Miller timely appealed the bankruptcy court’s dismissal of his case as well
as the order denying him summary judgment. 11 Neither party elected to have the
appeal heard by the district court, and the parties have therefore consented to
appellate review by this Court.
III. ISSUE AND STANDARD OF REVIEW
In calculating CMI pursuant to § 101(10A), is income that was
earned before the start of the six-month look-back period
included if it is received during that period?
The sole issue on appeal requires us to interpret a statute, a question of law
that we review de novo. 12
IV. DISCUSSION
Under § 707(b)(1), “the court . . . may dismiss a case . . . or, with the
debtor’s consent, convert such a case to a case under chapter 11 or 13 of this title,
if it finds that the granting of relief would be an abuse of the provisions of this
chapter.” Section 707(b)(2) sets out a means test that creates a presumption of
abuse in many cases, but § 707(b)(7)(A) effectively exempts a debtor from the
9
28 U.S.C. § 158(a)(1), (b)(1), and (c)(1); Fed. R. Bankr. P. 8002; 10th Cir.
BAP L.R. 8001-3.
10
In re Miller, 383 B.R. 767, 770 (10th Cir. BAP 2008) (order of dismissal is
generally final and appealable under 28 U.S.C. § 158(a)).
11
The UST suggests that 10th Cir. BAP L.R. 8001-1 required Miller to pay
two filing fees in order to appeal both the order denying his motion for partial
summary judgment and the order dismissing his case. This local rule is
interpreted to require separate notices of appeal from separate final orders, which
the December 5 order was not. Moreover, an appellant may seek review of all
interim, non-final orders in conjunction with an appeal of the final order resolving
the case. See Koch v. City of Del City, 660 F.3d 1228, 1237 (10th Cir. 2011),
cert. den.,
133 S. Ct. 211 (2012) (interlocutory orders merge into a final judgment
and are reviewable on appeal).
12
In re Woods, 743 F.3d 689, 693 (10th Cir. 2014); In re Ford,
574 F.3d
1279, 1282 (10th Cir. 2009).
-5-
means test presumption of abuse “if the current monthly income of the
debtor . . . and the debtor’s spouse combined . . . when multiplied by 12, is equal
to or less than” the median income for the debtor’s family size in the applicable
state. The term “current monthly income” is defined in § 101(10A) as follows:
(10A) The term “current monthly income”–
(A) means the average monthly income from all sources
that the debtor receives (or in a joint case the debtor and
the debtor’s spouse receive) without regard to whether
such income is taxable income, derived during the
6-month period ending on–
(i) the last day of the calendar month
immediately preceding the date of the
commencement of the case if the debtor
files the schedule of current income
required by section 521(a)(1)(B)(ii)
(emphasis added).
The parties offer differing interpretations of the term “current monthly
income.” Miller reads “derived during” to mean “earned during.” As a result, he
reads § 101(10A) to include only income that he both received and earned during
the 6-month look-back period. In other words, he contends the statute excludes
both income received in the look-back period that he earned outside of that period
and income he earned during the look-back period for which he received payment
outside of it. The UST contends that all income received during the look-back
period must be included in the calculation of CMI, regardless when it was
earned. 13
The Tenth Circuit Court of Appeals has not considered this issue, and our
independent research has produced no other appellate decisions addressing the
meaning of this language. We are thus left to interpret the Code in the first
instance. “[I]nterpretation of the Bankruptcy Code starts ‘where all such inquiries
13
The UST agrees with Miller that income earned in the look-back period—
but received outside of that period—is not included in CMI (such as Miller’s
April 10, 2013 pay).
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must begin: with the language of the statute itself.’” 14 “It is well established that
‘when the statute’s language is plain, the sole function of the courts—at least
where the disposition required by the text is not absurd—is to enforce it according
to its terms.’” 15 Further, “[i]t is a fundamental canon of statutory construction
that the words of a statute must be read in their context and with a view to their
place in the overall statutory scheme.” 16 “If the statute’s plain language is
ambiguous as to Congressional intent, we look to the legislative history and the
underlying public policy of the statute.” 17
The most common definition of “derive” is “to take, receive, or obtain
especially from a specified source,” 18 and both parties rely on this definition. 19
But this definition is actually defining the phrase “derive from.” Using the term
“derive,” as outlined in these definitions, requires the preposition “from.” But
Congress did not choose the phrase “derived from;” instead, it used the term
“derived” in a temporal setting, that is, “derived during.” And a dictionary
definition analogous to the one for “derived from” for the phrase “derived during”
would read as follows: “to take, receive, or obtain, especially during a specified
period.” Using this definition in the statute, then, the primary dictionary meaning
leads us to read “income derived during the look-back period” as “income taken,
received, or obtained during the look-back period.” The meaning of the terms
14
Ransom v. FIA Card Servs., N.A., 562 U.S. 61,
131 S. Ct. 716, 723 (2011)
(quoting United States v. Ron Pair Enters., Inc.,
489 U.S. 235, 241 (1989)).
15
Lamie v. U.S. Trustee, 540 U.S. 526, 534 (2004) (quoting Hartford
Underwriters Ins. Co. v. Union Planters Bank, N.A.,
530 U.S. 1, 6 (2000)).
16
Davis v. Mich. Dep’t of Treasury, 489 U.S. 803, 809 (1989).
17
United States v. Manning, 526 F.3d 611, 614 (10th Cir. 2008) (citation and
internal quotation marks omitted).
18
See, e.g., Merriam-Webster Online Dictionary,
http://www.merriamwebster.com/dictionary/derive.
19
See Appellant’s Brief at 11-12.
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“taken” and “obtained” are subsumed in the broader term “received,” 20 so we read
the definition of “income derived during the look-back period” as “income
received during the look-back period.” This appears to be the plain meaning of
the statute.
Admittedly, construing the words “derived during” to be essentially
synonymous with the word “received” presents a statutory interpretation
challenge, given that Congress used the word “receives” earlier in the same
sentence. If the legislature intended the words to have the same meaning, why
would it use different words?
Miller makes just this argument, asserting that “if different language is
used in different parts of a statute, then a court should presume the legislature
intended a different meaning and effect with respect to each term.” 21 This
argument appears to rely on the idea that courts should not read a statute to render
any portion of the statute redundant, and reading dissimilar terms to mean the
same thing risks creating redundancy. But there is little precedential support for
the alleged rule that different words must have different meanings.
The United States Supreme Court has specifically recognized that
Congress’s use of two different terms in a statute does not preclude the courts
assigning the terms the same meaning, noting that Congress may have used the
terms, “not as contrasting, but as synonymous or alternative terms.” 22 And even if
20
If one takes or obtains money, one still receives that money; the terms
simply provide additional information about how that money is received.
21
Appellant’s Brief at 12.
22
Wachovia Bank v. Schmidt, 546 U.S. 303, 314 (2006) (in reference to the
words “located” and “established” in a statute). Congress certainly does use
synonyms in its drafting, and courts should not strain to interpret words
differently when their ordinary meaning is synonymous. Thus, the rule against
superfluities cannot be used to override the “fundamental canon of statutory
construction . . . that, unless otherwise defined, words will be interpreted as
taking their ordinary, contemporary, common meaning.” Perrin v. United States,
(continued...)
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this purported rule were a canon, “canons are not mandatory rules” but, rather, are
“guides [] designed to help judges determine the Legislature’s intent as embodied
in particular statutory language. And other circumstances evidencing
congressional intent can overcome their force.” 23
Nevertheless, Miller argues “derive” must have a different definition from
“receive”, and so ultimately interprets “derived during” to require that “the
income at issue must originate from, or be earned during, the applicable six-
month “look-back” period (i.e., the “specified source” or “origin” of the income)”
(emphasis added). But there is simply no basis in the statute or the dictionary
definitions for interpreting “derived” as “earned,” the latter being a word Miller
adds to the definition without explanation. This unjustified addition twists the
meaning of the term “derived” and would fundamentally alter the CMI definition.
None of the dictionary definitions of “derive” uses the term “earn.” Even if
Miller is correct that Congress generally does not use two words to mean the
same thing, there is simply no basis to substitute “earned” for “derived,” as Miller
advocates.
Moreover, Miller’s general argument, that reading two different words to
mean the same thing renders portions of the statute redundant, fails in this case.
Careful consideration of this statute indicates that, even when “received” and
“derived” are given the same meaning, every portion of the statute remains
essential. We note that the first portion of the statute, containing the term
“receives,” is in the present tense and explains what kind of income is included in
a CMI calculation, without respect to its receipt. Thus, “income from all sources
that the debtor receives . . . without regard to whether such income is taxable” is
22
(...continued)
444 U.S. 37, 42 (1979).
23
Chickasaw Nation v. United States, 534 U.S. 84, 94 (2001) (citation and
internal quotation marks omitted).
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included in CMI. The second part of the CMI definition sets the time period
applicable to that income; the income must have been “derived during” the look-
back period. When the statute is read as a whole, then, it contains no
surplusage—both portions of the definition of CMI are necessary to the
calculation.
After reviewing the accepted definitions for the term “derived,” in the
context of the phrase “derived during,” the Court concludes that the phrase
“income derived during the look-back period” has the plain meaning “income
received during the look-back period.” This reading does not raise the concerns
about redundancy or surplusage sometimes associated with reading dissimilar
terms to mean the same thing, and this reading directly applies the commonly
accepted dictionary definition of the term “derived” to the question at hand.
Because this is the only reasonable interpretation of the statutory language, the
language is not ambiguous. 24
The Court is aware of the divided case law on this question, 25 and Miller
24
Nat’l Credit Union Admin. Bd. v. Nomura Home Equity Loan, Inc., No. 12-
3295, 2014 WL 4069137, at *31 (10th Cir. Aug. 19, 2014).
25
See, e.g., In re Strickland, 504 B.R. 542, 545-46 (Bankr. D. Minn. 2014)
(holding that “current monthly income” under § 101(10A) means the amount of
income earned during the six months, regardless of the date of receipt); In re
Robrock,
430 B.R. 197, 204 (Bankr. D. Minn. 2010) (same); In re Cruz, No. 08-
23419,
2008 WL 3346583, at *2 (Bankr. E.D. Wis. Aug. 11, 2008) (holding that
“[w]hether income is included in CMI is determined by when the debtor receives
funds, not when they are earned.”), relying on In re DeThample,
390 B.R. 716
(Bankr. D. Kan. 2008); In re Burrell,
399 B.R. 620, 627 (Bankr. C.D. Ill. 2008)
(holding that “derived during” was mere “surplusage adding nothing substantive
to the definition” of CMI); In re
DeThample, 390 B.R. at 721 (holding that
§ 101(10A) “include[s] every dime a debtor gets during the relevant period except
for those amounts specifically excluded”); In re Sanchez, No. 06-40886,
2006 WL
2038616, at *2 (Bankr. W.D. Mo. July 13, 2006) (holding that “derived” is
largely redundant of “received,” meaning “to take, receive, or obtain especially
from a specified source,” and thus that CMI included all money received during
the look-back period).
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relies extensively on two prior Chapter 7 cases, Arnoux and Meade, 26 which merit
additional discussion. First, Miller relies on Arnoux, but the definition of
“derived” was not at issue in Arnoux, as both the Chapter 7 debtor and the UST
apparently agreed that the term meant “earned.” The only dispute was whether
income the debtor received after the look-back period, for work performed during
that period, must be included in CMI. Debtor Arnoux argued (as does Miller) that
income must be both received and earned in the look-back period, whereas the
trustee argued (as does the UST here) that only the term “derived” is actually
limited to the look-back period. The debtor had included all income she received
during the look-back period, but had excluded a two-week payment for work
performed during that period, but received outside of it.
The Arnoux trustee argued that the “natural reading” of § 101(10A)
imposed two conditions on income inclusion (only one of which was subject to a
time parameter): 1) it was received by the debtor, and 2) it was “derived” (i.e.,
earned) during the look-back period. Contrary to that trustee’s plain language
assertion, the Arnoux court determined § 101(10A) to be ambiguous. 27 It then
considered the statute’s legislative history, concluding that the drafters intended
the look-back period to apply to both “receives” and “derived.” 28 Thus, the court
held that income must be both received and earned during the look-back period,
so income the debtor received outside of the look-back period but earned during it
was excluded from the debtor’s CMI.
26
In re Arnoux, 442 B.R. 769 (Bankr. E.D. Wash. 2010); In re Meade,
420
B.R. 291 (Bankr. W.D. Va. 2009).
27
In re Arnoux, 442 B.R. at 776 (but disagreeing with the Burrell court’s
assessment that the phrase “derived during” was in the statute as the “result of
poor sentence construction and inartful drafting”).
28
Id.
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Miller also relies on In re Meade 29 to support his position. In Meade, the
principal dispute centered around whether the entire $9,000 annual bonus
received by one of the debtors during the November 1, 2008 through April 30,
2009 look-back period—theoretically for work done throughout 2008—should be
included. 30 As the entirety of the bonus was received during the look-back
period, the trustee argued that it should all be included in calculating the debtors’
CMI. The Meades countered that “a common sense approach” would be to divide
the bonus into twelve months, rather than six, since it was an annual bonus. 31
Significantly, the Meades had stipulated to their above-median status, and that the
statutory presumption of ability to pay their creditors arose under § 727(b)(2). As
such, the specific issue in Meade was whether debtors’ “disposable income”
(CMI, less allowed expenses, times sixty) exceeded the threshold for presumption
of abuse. 32
The Meade court elected to include only half of the annual bonus in the
debtors’ CMI. It did so based in large part on the parties’ agreement that the term
29
In re Meade, 420 B.R. at 291.
30
The debtor had also received a similar bonus of $9,000 in February 2008,
and $8,500 in February of 2007, corroborating that the debtor’s receipt of annual
bonuses, in this range, was the norm.
31
In re Meade, 420 B.R. at 301. The Meades did not argue, as they might
have, that the entirety of the annual bonus was “earned” in calendar year 2008, in
which case, only two months of the bonus (November and December) were both
“earned” (or “derived”) and received during the look-back period. At most, the
bonus likely was earned in only three months of the look-back period (November
through January), as bonuses are not typically paid in advance. Although this
argument was not made, the fact that it could have been under Miller’s reading of
§ 101(10A) helps illustrate the UST’s argument that requiring income to be both
earned and received in the look-back period would, in many instances, increase
the complexity of determining the amount of income to include in CMI. Thus,
although it is ordinarily simple enough to determine when regular pay (“earned
income”) was “earned” as in the present case, other income, including bonuses,
401(k) distributions, and other “passive income,” might be quite difficult to tie to
a particular date other than when it was received.
32
See § 707(b)(2)(A)(i).
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“derived,” as used in § 101(10A), meant “earned.” This is apparent from the
court’s discussion regarding the difficulty of prorating a bonus that was paid prior
to the look-back period under the parties’ statutory reading. 33 The court then
“acknowledge[d] the conceptual difficulties” of its holding, but found them to be
no greater than the problem of using past income to determine what a debtor will
pay in a future repayment plan. 34 Ultimately, however, the court granted the
trustee’s motion to dismiss the Meades’ case, finding that they had failed to rebut
the statutory presumption. 35 Thus, Meade neither supports Miller’s assertion that
income must be both received and earned in the look-back period, nor does it hold
that the term “derived” means “earned.”
Although the statute is unambiguous, its legislative history and underlying
public policy also support our interpretation of the statute. As several courts have
already noted, the word “derived” was never used in the legislative history of
33
The court noted that there was authority in a Chapter 13 context to include
such a non-look-back period payment in CMI, citing In re Foster, No. 05-50448,
2006 WL 2621080 (Bankr. N.D. Ind. Sept. 11, 2006).
Meade, 420 B.R. at 306.
Because Foster involved facts well beyond the ones presented by the present case,
we do not discuss it here.
34
In re Meade, 420 B.R. at 306-07. It is significant to note that the Meade
court did not have the benefit of the Supreme Court’s 2010 decision in Hamilton
v. Lanning,
560 U.S. 505, 517 (2010), which held that determinations of projected
disposable income should involve a “forward looking approach” that takes into
consideration “known or virtually certain changes to debtors’ income or
expenses.” Although the Lanning decision did not discuss the issue of “receives”
and “derived” with respect to inclusion of income in CMI, its holding is at least
arguably supportive of the UST’s position that while all income received should
be included in CMI, the continued accuracy of that income going forward may be
raised by a debtor (at least in Chapter 13 cases) in connection with the
determination of projected income. Thus, although the debtor in Lanning was
treated as an above-median debtor based on her CMI, which included two
significant, non-recurring buy-out payments from her former employer, the
amount of her actual plan payment was based on her true income at the time of
plan confirmation.
35
One factor that led to dismissal of the Meades’ case was the court’s
conclusion that debtor wife’s school teacher salary should not be prorated over 12
months, but should instead be included in CMI as it had been actually received.
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§ 101(10A), and very little was said about the statute at all. 36 One of only two
nearly identical legislative statements regarding CMI is found in a section-by-
section discussion of BAPCPA’s 2005 overhaul of the Bankruptcy Code:
Section 102(b) of the Act amends section 101 of the Bankruptcy
Code to define “current monthly income” as the average monthly
income that the debtor receives (or in a joint case, the debtor and
debtor’s spouse receive) from all sources, without regard to whether
it is taxable income, in a specified six-month period preceding the
filing of the bankruptcy case. 37
And as the Burrell court noted, “[t]he legislative history only makes reference to
when income is received; nowhere is reference made to when the income is
earned. The phrase ‘derived during’ is completely absent.” 38 The legislative
history thus supports a reading of the terms at issue here as merely synonymous.
Finally, the doctrine that we should be guided by the underlying public
policy of the statute reinforces our interpretation of CMI as requiring inclusion of
all income received by a debtor during the look-back period. As a general matter,
remedial legislation should be construed in a way that effectuates its remedial
purpose:
[R]emedial legislation, like BAPCPA, should be construed broadly to
effectuate its purpose. The means test was intended to screen
Chapter 7 individual debtor filings to determine who could pay a
significant portion of their debts over time. . . . BAPCPA intended to
force these debtors into Chapter 13 filings if they wanted bankruptcy
relief. The impetus behind this law was to ‘combat perceived fraud
and abusive [Chapter 7] filings.’ Thus BAPCPA is remedial in
nature. 39
This Court is well aware of the remedial concerns BAPCPA was intended to
address, and Miller is precisely the type of debtor who the drafters sought to
36
See, e.g., In re Burrell, 399 B.R. 620, at 627 (Bankr. C.D. Ill. 2008).
37
H.R. Rep. No. 109-31, at 122, reprinted in 2005 U.S.C.C.A.N. 88.
38
In re Burrell, 399 B.R. at 626.
39
In re Gentry, 463 B.R. 526, 530 (Bankr. D. Colo. 2011), citing In re
Kucharz, 418 B.R.635, 642 (Bankr. C.D. Ill. 2009) and Tcherepnin v. Knight,
389
U.S. 332, 336 (1967).
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screen from use of Chapter 7—higher income debtors who have the ability to
repay a portion of their unsecured debt, yet seek to instead have that debt
discharged. 40
Miller receives bi-weekly salary payments, a very common employer
payment method. Employees who are paid bi-weekly receive 13 paychecks in any
six-month period. However, Miller’s interpretation of CMI would reduce that
number to 12, thereby reducing the look-back period income of all bi-weekly paid
debtors by nearly 8%, since one of those payments will have been earned before
the period and paid during it, while another will be earned during the period and
paid after it. Reading the statute to only include 12 bi-weekly payments would be
inconsistent with its purpose, as it would not fairly capture an entire six-month’s
worth of income. It was not Congress’s intent in enacting the BAPCPA “means
test” to allow debtors to distort their actual income to avoid paying a fair share of
their future income to their creditors.
Thus, even if we were to hold this statute ambiguous, an analysis of the
legislative history, coupled with an appreciation of the statute’s remedial purpose,
would dictate the same conclusion.
V. CONCLUSION
Although both parties present persuasive arguments on this difficult issue
of statutory interpretation, we conclude that the plain meaning of § 101(10A) is
that the term “current monthly income” includes all income a debtor receives in
the look-back period, regardless when it was earned. Even were we to conclude
that the statute was ambiguous, imposition of an additional requirement—that the
40
Although the math suggests Miller might have been able to pay as much as
72% of his unsecured debt ($42,000/$58,062), the UST contends, using data from
Miller’s own schedules I and J, that Miller could have paid his unsecured
creditors as much as 50% of their claims over a 60-month repayment plan. See
U.S. Trustee’s Analysis of the Debtor(s) Schedules I & J, in Appx at 73-75.
Regardless whether it is 50% or 72%, it is a significant recovery for creditors.
-15-
income also be earned during the look-back period—is supported neither by the
statute’s language nor by legislative history, and we would ultimately define the
term in the same way. Therefore, we affirm the bankruptcy court’s dismissal of
Miller’s Chapter 7 case, pursuant to § 707(b)(2).
-16-
Home » About DOJ » Agencies » U.S. Trustee Program » Means Testing » Means Testing (Cases Filed Between April 1, 2013, and April 30, Printer Friendly
2013, Inclusive) » Census Bureau Median Family Income By Family Size
U.S. Trustee Program CENSUS BUREAU MEDIAN FAMILY INCOME BY FAMILY SIZE E-MAIL UPDATES
About the Program
Meet the Director
(Cases Filed Between April 1, 2013, and April 30, 2013, Inclusive)
Regions and Offices The following table provides median family income data reproduced in a format designed for ease of use
in completing Bankruptcy Forms 22A and 22C.
Private Trustee
Information The State Median Family Income by Family Size data is available for download in MS Excel
Fee Guidelines format. [XLSX - 14 KB ]
Consumer Information
Credit Counseling & . FAMILY SIZE
Debtor Education
STATE 1 EARNER 2 PEOPLE 3 PEOPLE 4 PEOPLE *
Means Testing
Information ALABAMA $40,120 $49,163 $52,215 $64,700
Press & Public Affairs ALASKA $53,804 $71,624 $82,198 $88,373
ARIZONA $42,107 $55,118 $55,654 $61,023
Employment
ARKANSAS $36,505 $46,333 $49,494 $56,591
Opportunities
CALIFORNIA $48,415 $63,030 $67,401 $75,656
What's New COLORADO $49,549 $65,631 $72,259 $86,787
Site Map CONNECTICUT $58,337 $72,878 $86,390 $102,530
DELAWARE $48,284 $62,707 $73,284 $85,150
USTP FOIA DISTRICT OF COLUMBIA $50,186 $81,960 $81,960 $81,960
Contact the Program FLORIDA $41,915 $51,760 $54,934 $65,260
GEORGIA $41,214 $51,954 $56,189 $67,214
HAWAII $49,919 $63,896 $76,001 $84,690
IDAHO $41,785 $49,896 $50,506 $62,322
ILLINOIS $47,485 $59,861 $68,721 $80,776
INDIANA $42,089 $52,618 $58,916 $70,763
IOWA $42,207 $58,852 $64,552 $78,366
KANSAS $42,577 $56,851 $65,907 $76,402
KENTUCKY $40,020 $46,815 $55,613 $67,783
LOUISIANA $37,967 $47,731 $55,863 $70,347
MAINE $41,488 $53,227 $60,425 $79,931
MARYLAND $58,269 $73,685 $87,206 $108,915
MASSACHUSETTS $55,602 $67,443 $82,495 $103,624
MICHIGAN $45,029 $52,621 $61,715 $73,864
MINNESOTA $48,097 $63,654 $76,909 $89,126
MISSISSIPPI $36,240 $43,095 $46,062 $59,248
MISSOURI $41,092 $51,784 $59,549 $72,150
MONTANA $42,301 $54,362 $56,977 $67,055
NEBRASKA $41,861 $59,543 $67,235 $77,057
NEVADA $44,924 $55,674 $55,674 $66,562
NEW HAMPSHIRE $52,588 $65,830 $82,924 $99,457
NEW JERSEY $61,146 $69,697 $85,016 $103,786
NEW MEXICO $38,349 $51,965 $51,965 $61,617
NEW YORK $47,790 $59,308 $69,052 $83,209
NORTH CAROLINA $40,710 $51,812 $56,339 $64,983
NORTH DAKOTA $41,557 $61,492 $68,688 $86,653
OHIO $42,814 $53,218 $60,960 $74,270
OKLAHOMA $40,665 $51,575 $53,500 $64,374
OREGON $43,160 $55,057 $62,202 $67,315
PENNSYLVANIA $47,439 $55,210 $68,848 $82,078
RHODE ISLAND $46,896 $61,607 $76,864 $83,785
SOUTH CAROLINA $39,238 $50,548 $53,532 $61,388
Footnote 2
SOUTH DAKOTA $38,071 $57,188 $65,829 $73,960
TENNESSEE $39,891 $48,617 $55,080 $65,038
TEXAS $41,225 $55,895 $60,503 $67,296
UTAH $50,976 $56,089 $63,430 $66,590
VERMONT $46,019 $61,702 $67,774 $85,750
VIRGINIA $53,328 $65,930 $77,585 $91,661
WASHINGTON $52,724 $65,123 $71,289 $83,270
WEST VIRGINIA $41,499 $44,536 $54,790 $66,756
WISCONSIN $43,661 $58,668 $65,775 $81,296
WYOMING $45,336 $63,193 $73,688 $78,733
* For cases filed on or before March 31, 2013, add $7,500 for each individual in excess of 4.
For cases filed on or after April 1, 2013, add $8,100 for each individual in excess of 4.
COMMONWEALTH OR FAMILY SIZE
U.S. TERRITORY 1 EARNER 2 PEOPLE 3 PEOPLE 4 PEOPLE *
GUAM $38,410 $45,925 $52,334 $63,331
NORTHERN MARIANA ISLANDS $25,793 $25,793 $30,008 $44,137
PUERTO RICO $22,392 $22,392 $23,537 $28,180
VIRGIN ISLANDS $30,475 $36,627 $39,052 $42,785
* For cases filed on or before March 31, 2013, add $7,500 for each individual in excess of 4.
For cases filed on or after April 1, 2013, add $8,100 for each individual in excess of 4.
FRIDAY, SEPTEMBER 27, 2013 10:49 AM
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Footnote 2
Derive - Definition and More from the Free Merriam-Webster Dictionary
de·rive verb \di- ˈrīv, dē-\
: to take or get (something) from (something else)
: to have something as a source : to come from something
de·rived de·riv·ing
Full Definition of DERIVE
transitive verb
1 a: to take, receive, or obtain especially from a specified
source
b: to obtain (a chemical substance) actually or theoretically
from a parent substance
Footnote 18
http://www.merriam-webster.com/dictionary/derive[10/8/2014 3:03:42 PM]
