Johnson, et al. v. Fink, No. 11-6037 (8th Cir. 2011)
Annotate this CaseThis was an appeal from an order of the bankruptcy court overruling debtors' objection to confirmation of their post-confirmation amended Chapter 13 plan. At issue was the extent to which debtors could modify the payments set forth in a confirmed plan. The court agreed with the trustee that when a confirmed plan was modified to reduce payments under 11 U.S.C. 1329(a) due to a substantial change in financial circumstances, the modification must correlate to the change in circumstances. Debtors' proposed reduction in their plan payment from $1,890.00 per month under their original confirmed plan to $100.00 per month was not reflective of their loss of income in the amount of $1,240.00 per month. Therefore, the court affirmed and held that the bankruptcy court did not abuse its discretion in overruling their objection and confirming the plan.
Court Description: Bankruptcy Appellate Panel. When a confirmed Chapter 13 plan is modified to reduce payments under 11 U.S.C. Sec. 1329(a) due to substantial change in financial circumstances, the modification must correlate to the changes in circumstance; where debtors lost $1,240 in wages and salary, they could not reduce their monthly payment from $1,890 to $100, and the bankruptcy court did not err in setting their new monthly payment at $500.
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