Charles Edward Maier and Carolyn June Maier

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The court incorporates by reference in this paragraph and adopts as the findings and orders
of this court the document set forth below.

Russ KHendig
United States Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

IN RE: ) CHAPTER 13
)

CHARLES EDWARD MAIER AND ) CASE NO. 07-62130

CAROLYN JUNE MAIER, )
) JUDGE RUSS KENDIG

Debtors.

) MEMORANDUM OF OPINION
) (NOT INTENDED FOR
) PUBLICATION)

On January 5, 2011, Debtors filed a modification to discontinue payments to their
unsecured creditors. The trustee objected to the modification. The court conducted a hearing
on March 9, 2011, attended by Toby L. Rosen, chapter 13 trustee (“Trustee”) and John H.

Hornbrook, counsel for Debtors.

The court has jurisdiction of this matter pursuant to 28 U.S.C. § 1334 and the general
order of reference entered in this district on July 16, 1984. Venue in this district and division

is proper pursuant to 28 U.S.C. § 1409.

This opinion is not intended for publication or citation. The availability of this
opinion, in electronic or printed form, is not the result of a direct submission by the court.

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FACTS

Debtors filed a joint chapter 13 case in July 2007. At filing, they earned above-
median incomes. Their plan was confirmed on December 13, 2007. Under its terms,'
Debtors had to contribute a minimum of $32,400, the chapter 7 value. Debtors proposed
to pay $900 per month for 60 months. Although the plan provided for Trustee to make
payments on the second mortgage, the secured creditor did not file a proof of claim. Asa
result, Trustee is paying only administrative and unsecured claims. Excluding Trustee’s

poundage, the administrative expenses are paid in full.

At the time of filing, Debtors’ monthly net income was $4,018 and their expenses
were $3,118. Debtors have one dependent, a daughter aged eighteen at the time of filing.

In May 2010, Mrs. Maier was laid off from her job. Although she received
unemployment benefits, Debtors’ income declined.

In September 2010, Debtors filed amended schedules I and J. At that point, they
listed income of $3,279 and expenses of $2,379. Their daughter is still listed as an

eighteen year old dependent.

Debtors have not made payments since October 2010 and are delinquent. A
motion to dismiss is pending.

Debtors filed a modification on January 5, 2011 to stop further payments to the
unsecured creditors. Trustee objected, arguing that Debtors had the ability to continue to
make payments. Debtors filed new schedules I and J in March 2011. The latest
schedules indicate Debtors earn $3,136 per month net and have expenses of $3,136.7 As
a result, they show no ability to fund a plan. If the modification is approved, Debtors will

not have to make any payments to Trustee.

LAW AND ANALYSIS

Pettiness abounding, the parties have raised multiple issues. All will be
addressed.

The matter before the court is the modification filed on January 5, 2011.
Although Trustee’s motion to dismiss, filed on January 3, 2011 is pending, and was set
for hearing with Debtors’ modification in March 2011, the hearing primarily focused on
the modification. The briefing schedule pertained to only the modification. The court
finds the motion to dismiss was shelved pending the outcome of the modification.

' The court incorporates the agreed order resolving Trustee’s objection to confirmation
into the “terms” of the confirmed plan.

* Debtors’ daughter is listed as an 18 year old dependent.

2

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Consequently, the motion to dismiss will not be considered at this time.

Debtors’ modification proposes to stop further distribution to unsecured
creditors.’ In their brief, however, Debtors argue that the question is whether Debtors can
shorten the applicable commitment period. This is not the issue presented to the court in
the modification. Debtors did not seek to modify the plan to reduce the term, they sought

to stop further payments to unsecured creditors.

The court acknowledges the overlap in the issues. Since all other allowed claims
have been paid in full, only the unsecured creditors remain. If the percentage is reduced to
zero, Debtors will not have no one to pay. Debtors’ position is based on the perception
that reducing the applicable commitment period is the logical progression of their
modification. The court disagrees. The natural understanding of Debtors’ modification is
that they cannot currently make plan payments. It does not follow that they may not be
able to make further plan payments during their commitment period. Consequently,
requesting a reduction, even to the point of cessation, in payments does not automatically
result in truncation of the term of the plan. The court’s determination will be limited to

the payment issue.

Since filing her objection, Trustee has consistently argued that Debtors have
“sufficient disposable income to require plan payments in some amount even after the
unemployment of Mrs. Maier.” (Trustee’s Brief at 1.) At the hearing, Trustee
specifically referenced Debtors itemization for $200 in miscellaneous expenses and $250
for clothing. This position is reiterated in her brief.

Trustee’s position is not well-taken. When the case was filed, Debtors’ Schedule
J included the exact expenses Trustee now challenges. No objection was raised to the
expenses in 2007, making Trustee’s objection to the modification disingenuous.

Debtors’ hands, however, are not clean. In September 2010 they filed an amended
Schedule J to reduce their expenses from $3,118 to $2,379 in light of Mrs. Maier’s
unemployment. At the time of the amendment, Debtors may not have met the chapter 7
value of their plan. Based on information from bankruptcylink.com, it appears Debtors
have managed to just clear this hurdle. Now, they filed a second amended Schedule J to
increase payments to $3,136. Basically, what Debtors are saying is that they were willing
to exercise austerity to meet the minimum required of this case, the chapter 7 liquidation
value, but are no longer willing to continue the sacrifice to pay prepetition unsecured
creditors. While Trustee may be disingenuous, Debtors are not guileless.

Looking at the most recent Schedule J, the court notes the addition of two
expenses which were not on either of the previous filings: $13.00 for recreation expenses
and $200.00 in taxes. There is nothing before the court to justify the addition of either of
these expenses to the budget. Debtors can fund the plan with this $213.00.

> Reducing the future percentage to zero is the equivalent of ceasing to provide a further
dividend to unsecured creditors.

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As a final matter, Debtors allege that Trustee’s motion to extend the briefing
schedule was somehow nefarious. The court does not know what conversation transpired
between the parties as to the reason for the briefing extension. What is clear is that the
motion referenced the provision of additional documentation by Debtors and the order
identified the documents Trustee wanted. Mr. Hornbrook signed the order and cannot
now claim to be surprised or deem a “foul” in Trustee’s request. Debtors have no

grounds for noncompliance.

The court does not find Trustee’s request for documentation to be unseemly.
Debtors filed an amended I and J on March 7, 2010, two days prior to the hearing. The
hearing was scheduled for March 9, 2011 at 2:00 p.m. At 3:16 p.m. on the day of the
hearing (one hour and sixteen minutes after the scheduled time of the hearing), Debtors

again amended Schedule J to reduce their expenses $200. It is not unreasonable to seek
information on changes which occurred after the hearing.

An order in accordance with this opinion will be issued immediately.

# # #

Service List:

Toby L. Rosen

Charter One Bank Building, 4" Floor
400 W. Tuscarawas St.

Canton, OH 44702

John H Hornbrook

1400 N Market Ave
Canton, OH 44714-2608

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