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Does the Means Test Control Your Chapter 13 Plan Payment?

The United States Supreme Court rejected the argument that the means test has to be applied rigidly and controlled the disposable income calculation without exception.  Hamilton v. Lanning 130 S. Ct. at 2478 (2010).  The Court recognized that in some cases, a Debtor’s financial circumstances have changed significantly from the prior six (6) months to filing a bankruptcy case and the values used in calculating the means test do not strictly apply to actual disposable income, ID at 1274.  In order to determine how much money a Debtor truly has to contribute to the Chapter 13 plan as demonstrated by their allowable disposable income, a Bankruptcy Court should take into account for “known or virtually certain information about the Debtor’s future income and expenses” ID at 1278.  Based upon the foregoing, notwithstanding the implementation of a uniform formula and many standardized expense amounts, the means test is not to be inflexibly applied.  Rather, the factual circumstances of each individual debtor are legally relevant.