IN RE: Latwoin Evon Taylor (2024)

Chapter 13

ORDER DENYING MOTION TO USE EXCESS CHAPTER 13 TRUSTEE FEES TO COMPLETE PLAN

THIS CASE came on for hearing on March 27, 2024, upon the Debtor's “Motion to Use Excess Chapter 13 Trustee Fees to Complete Plan” (the “Excess Fee Motion”) (Doc. No. 147), and the Chapter 13 Trustee's response thereto (the “Response”) (Doc. No. 148). For the following reasons, the Court denies the Excess Fee Motion.

On October 5, 2018, the Debtor filed this Chapter 13 case. (Doc. No. 1.) The Debtor's Chapter 13 plan (the “Plan”) was confirmed on June 12, 2019 (Doc. No. 92) and later modified on July 10, 2020 (Doc. No. 107). Allowed unsecured claims total $144,186.37, not including the IRS's general unsecured claim of $65,529.61. (Doc. No. 107 at 2.) Under the modified Plan, unsecured creditors received de minimis monthly “pro rata” payments (ranging from 96 cents to $5.90) (Doc. No. 105-1 at 1; Doc. No. 107 at 2), for a total of $84.34 over the life of the Plan.

On February 14, 2024, the Debtor filed a “Motion to Complete Plan and Entry of Discharge” (“Discharge Motion”), stating he completed all Plan payments and requesting discharge despite the existence of a nondischargeable 2018 income tax liability of approximately $2,220, which he would arrange to pay immediately after his case was closed. (Doc. No. 141 ¶ 1.)¹ The Trustee did not oppose the Discharge Motion, as the liability pertained to a single tax year. (Doc. No. 142.) Subsequently, the Debtor withdrew the Discharge Motion (Doc. No. 146) and filed the Excess Fee Motion claiming the Chapter 13 Trustee holds excess fees of $4,850.92 (the “Excess Fees”) (Doc. No. 147 ¶ 5).

The Debtor seeks to use the Excess Fees to pay his 2018 income tax liability and monies owed to his homeowners’ association (“HOA”), and to use the remaining amount to pay his attorney. (Doc. No. 147.) The 2018 tax debt is $2,220.00, and the HOA is owed $1,588.80. (Id. ¶¶ 4, 7.) The Debtor asserts that if both obligations are paid from the Excess Fees, $631.20 remains for his attorney. (Id. ¶ 8.) (The actual difference, however, is $1,042.12.² ) Both the tax debt and the HOA debt arose post-petition. (Id. ¶ 7.)

The Trustee asks the Court to deny the Excess Fee Motion because the Debtor's income increased every year without a corresponding increase in plan payments, and neither the tax liability nor the HOA debt was included in an allowed claim or the confirmation order (the “Order”). (Doc. No. 148 ¶¶ 5, 6.) Moreover, the Order specifically provides how such fees will be used. (Doc. No. 92 ¶ 5.) The Order states, “If the Trustee's actual fee is less than provided for in the Plan, any unused portion of the fee may [be used to] fund the Plan or to increase the distribution to unsecured creditors.” (Id.) Because the Debtor's request is not to fund the Plan or to increase distribution to unsecured creditors, the Motion is, as argued in the Response, seeking to modify the completed Plan. (Doc. No. 148 ¶ 7.)

Pursuant to § 1329, a Chapter 13 plan may be modified after confirmation but before payments are completed upon the debtor's request to—

(1) increase or reduce the amount of payments on claims of a particular class provided for by the plan;

(2) extend or reduce the time for such payments;

(3) alter the amount of the distribution to a creditor whose claim is provided for by the plan to the extent necessary to take account of any payment of such claim other than under the plan; or

(4) reduce amounts to be paid under the plan by the actual amount expended by the debtor to purchase health insurance for the debtor ․

11 U.S.C. § 1329(a).

The Debtor does not meet the statutory requirements to modify the Plan. First, the Debtor completed Plan payments in October 2023 (Doc. No. 151), prior to filing the Excess Fee Motion in March 2024, so the request comes too late. Second, the Debtor seeks to use the Excess Fees to pay obligations arising post-petition, which is not a permitted reason for post-confirmation plan modification under § 1329(a) insofar as such obligations were not provided for by the Plan; thus, even if the Excess Fee Motion had come prior to Plan completion, none of the remaining bases for modification would apply. Because the Debtor fails to meet the requirements to modify the Plan under § 1329, the Motion must be denied. See In re Guillen, 972 F.3d 1221, 1229 (11th Cir. 2020) (modification of confirmed plans may only be sought by specific parties for the express, limited purposes set forth in § 1329).

Accordingly, it is ORDERED that the Excess Fee Motion (Doc. No. 147) is DENIED.

FOOTNOTES

1.   On April 25, 2024, the Trustee filed a Notice of Final Cure Payment, noting that the final month of the Plan was October 2023. (Doc. No. 151.)

2.   Adding the HOA debt ($1,588.80) to the difference the Debtor suggests would remain for payment to his attorney ($631.20) equals the amount of the tax debt ($2,220.00) ($1,588.80 plus $631.20 equals $2,220.00).

Tiffany P. Geyer United States Bankruptcy Judge