48:2 Final Score on “Projected Disposable Income”: Forward-Looking Approach (8), Mechanical Approach (1)



In the landmark case of Hamilton, Chapter 13 Trustee v. Lanning, the United States Supreme Court recently decided the most controversial issue in bankruptcy law since the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). In a well-reasoned 8–1 opinion, the Court held that, in calculating a debtor’s “projected disposable income” in a Chapter 13 case, a bankruptcy court may consider “changes in the debtor’s income or expenses that are known or virtually certain at the time of confirmation” of the debtor’s plan. This issue had divided every level of federal courts and had been the subject of six differing interpretations, and the Court’s vitally important holding in favor of a forward-looking approach is consistent with the language of the Bankruptcy Code, the legislative history of BAPCPA, and the majority of the cases interpreting “projected disposable income.”

This Article analyzes each of the Supreme Court’s reasons for its interpretation of “projected disposable income,” respectively critiques the dissenting opinion, and concludes that the Court correctly held that a forward-looking approach is what Congress intended.