Since the CARES Act has expired, the bankruptcy court cannot now amend a confirmed chapter 13 plan while retaining an 84-month duration of the plan. For reasons explained in an opinion by Bankruptcy Judge Peter C. McKittrick of Portland, Ore., a plan that’s amended now must revert to 60 months.

In response to the pandemic, Congress added Section 1329(d) in 2020. Originally intended to have a one-year lifespan, the new section allowed an extension of the duration of a plan as long as it was not “more than 7 years after the time that the first payment under the original confirmed plan was due.” When the virus did not subside, Congress extended the life of Section 1329(d) for another year, with final sunset on March 27, 2022.

To save their home from foreclosure, a couple filed a chapter 13 petition 2019 and confirmed a 59-month plan in September 2019. Utilizing Section 1329(d), the debtors filed an amended plan in October 2020 that extended the plan duration to 84 months. When no objections were filed, the court confirmed the amended plan.

When no one objected, the debtors confirmed a third-amended plan in February 2023, which retained the 84-month term. For an extension of time to sell their home, the debtors filed a fourth-amended plan in June 2024, again aiming to retain the 84-month duration.

After Judge McKittrick raised a question about compliance with Section 1329, the mortgage-holder objected to confirmation, contending that retention of the 84-month term violated Section 1329(c), which caps chapter 13 plans at 60 months. The debtors contended that their 84-month plan should be “grandfathered.”

Judge McKittrick found no Ninth Circuit caselaw and a “limited number of opinions” elsewhere in the country that answered the question. He found only one opinion, from Colorado, allowing retention of an 84-month plan.

“Without exception,” Judge McKittrick said, “the other cases declined to approve modified plans that proposed to continue the term of the plan past 60 months.” As an example of cases calling for a reversion to 60 months, he cited In re Nelson, 646 B.R. 810 (Bankr. E.D. Wis. 2022). To read ABI’s report on Nelson, click here.

Judge McKittrick said that he was facing “a straightforward question of statutory interpretation” and that he “agree[d] with the line of cases represented by the Nelson decision.” For statutory authority, he cited Section 1329(b)(1), which says that Section 1325(a) applies to modified plans. In turn, Section 1325(a)(1) requires that a plan comply “with the provisions of this chapter.” Among those requirements is Section 1329(c) and its prohibition of plans with durations longer than 60 months.

Judge McKittrick found “no ambiguity in the statute because subsection (d) of § 1329 is no longer an applicable provision of the Bankruptcy Code.” He added, “The statute in its current form has no savings provision allowing for” the retention of a plan longer than 60 months.

The debtors argued that cutting back the length of the plan would be “manifestly unjust,” because their plan was paying creditors in full. Although the appeal to equity was “understandable,” Judge McKittrick cited Law v. Seigel, 571 U.S. 415 (2014), in saying that he could not disregard “an unambiguous statute for the purpose of accomplishing equity in a particular case.”

Judge McKittrick denied approval of the fourth-amended plan.