# Jacob Benjamin Dumas

> United States Bankruptcy Court, N.D. Georgia · October 1, 2019

URL: https://www.frixlaw.com/law-library/cases/10456788

## Case

- **Court:** United States Bankruptcy Court, N.D. Georgia
- **Decided:** October 1, 2019
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10456788

## How later opinions describe it (automated extraction)

- noting that technically attorney’s fees should be deducted as a priority claim pursuant to § 707(b)(2)(A)(iv) even though local practice allowed the pot deduction

## Opinion text

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IT IS ORDERED as set forth below: ij
Date: September 30, 2019 ‘WA
Jeffery W. Cavender
U.S. Bankruptcy Court Judge

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

IN RE: CHAPTER 13
JACOB BENJAMIN DUMAS, CASE NO. 18-62934-JWC
Debtor.

MEMORANDUM OPINION
THIS MATTER is before the Court on confirmation of the Chapter 13 Plan (as modified
at Doc. No. 29, the “Plan’’) filed by Jacob Benjamin Dumas (“Debtor”). Nancy J. Whaley,
Standing Chapter 13 Trustee (“Trustee”) filed objections to confirmation of the Plan at docket
numbers 17 and 23. The Court held a confirmation hearing on March 12, 2019. At the hearing,
Trustee announced that all objections to the Plan had been resolved except one. The sole remaining
issue is whether Debtor may deduct his attorney’s fees in calculating the minimum payment to

nonpriority unsecured creditors under 11 U.S.C. § 1325(b).1 Debtor argues that he may. Trustee
argues that he may not. The Court allowed the parties to submit additional briefs in support of
their positions, which both parties did at docket numbers 35 and 36. The Court has considered the
Plan, the record in Debtor’s case, the arguments at the confirmation hearing, the briefs submitted

by counsel, and the arguments and authority therein. For the following reasons, the Court will
overrule Trustee’s objection and confirm the Plan.
I. JURISDICTION
The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1334. Confirmation of a
plan is a core matter pursuant to 28 U.S.C. § 157(b)(2)(L). Venue is proper pursuant to 28 U.S.C.
§ 1409.
II. INTRODUCTION
To confirm a chapter 13 plan, all chapter 13 debtors must satisfy the requirements of §
1325. At issue in this case are the requirements found in § 1325(b), which provides that, upon
objection by the trustee or an unsecured creditor, the court may not confirm a plan unless, as of

the effective date of the plan, (1) unsecured creditors will be paid in full or (2) “the plan provides
that all of the debtor’s projected disposable income to be received in the applicable commitment
period . . . will be applied to make payments to unsecured creditors under the plan.” Code §
1325(b)(1). Trustee objected to the Plan and argues Debtor satisfies neither provision. There is
no dispute the Plan does not satisfy the first option as Debtor is not paying unsecured creditors in
full. Debtor argues he satisfies option 2—the projected disposable income test (or “PDI Test”).
The PDI Test “establishes a minimum amount to be paid to unsecured creditors based on a
debtor’s income and expenditures.” Drake, Bonapfel, Goodman, Chapter 13 Practice and

1 All further statutory references are to Title 11 of the United States Code (the “Bankruptcy Code” or “Code”) unless
otherwise specified.
Procedure § 8:1 (2019 Ed.). The test has three basic elements: (1) calculation of projected
disposable income (“PDI”); (2) determination of the applicable commitment period (“ACP”); and
(3) payment of all PDI received during the ACP to “unsecured creditors.” The question before the
Court is whether Debtor may deduct his attorney’s fees in calculating the minimum payment to

nonpriority unsecured creditors under the Plan. Debtor offers two theories allowing him to do so.
First, he argues he may deduct his attorney’s fees in calculating his PDI. Second, he argues that
even if he may not deduct the fees in calculating PDI, his attorney is an “unsecured creditor” whose
fees may be paid from PDI before nonpriority unsecured creditors. If he is correct on either theory,
the Plan is confirmable.
III. BACKGROUND
The facts are not in dispute. Debtor filed a voluntary petition under chapter 13 of the
Bankruptcy Code on August 4, 2018 (the “Petition Date”). Before filing, Debtor hired the Law
Office of Jeffrey B. Kelly, P.C. (“Attorney”) to represent him in his bankruptcy case. Debtor
agreed to pay his Attorney $4,500 (the “Attorney’s Fees”) for such representation. The amount

and reasonableness of the Attorney’s Fees are not in dispute. Debtor treats the Attorney’s Fees in
§ 4.3 of the Plan. Upon confirmation, the Attorney’s Fees will be an allowed administrative
expense under § 503(b) to the extent set forth in this Court’s General Order 22-2017 and will be
entitled to priority pursuant to § 507(a)(2). Trustee will pay the Attorney’s Fees pursuant to the
Plan and the General Order, which generally provide that the Attorney’s Fees will be paid before
any other claims except Trustee’s fees and unpaid preconfirmation adequate protection payments.
The sole source of funding for the Attorney’s Fees will be Debtor’s Plan payments.
Debtor is an “above-median” debtor. The term “above-median” is not found in the Code,
but, in simplified terms, it means Debtor has more current monthly income than the median income
of families sharing Debtor’s household size and state of residence. See Code § 1325(b)(3). Debtor
is a resident of Georgia, has a one-person household, and filed his case on August 4, 2018. The
median family income as of August 4, 2018 for a household with one earner in the State of Georgia
was $46,104.2 Debtor’s income is more than $46,104; Debtor is “above-median.” Any debtor

who has less income than the applicable median family income is “below-median.” The difference
is significant because the Code requires above-median debtors to calculate PDI differently than
below-median debtors.
All debtors must first look to § 1325(b)(2) to calculate PDI. That section defines
“disposable income” as “current monthly income received by the debtor . . . less amounts
reasonably necessary to be expended . . . for the maintenance or support of the debtor or a
dependent of the debtor . . . .” Code § 1325(b)(2). Debtor’s current monthly income is not in
dispute. The parties’ main dispute is whether Debtor’s Attorney’s Fees fall within “amounts
reasonably necessary to be expended.” The Code prescribes nothing further for below-median
debtors, and the determination of “amounts reasonably necessary to be expended” is left to debtors,

trustees, creditors, and courts to determine on a case-by-case basis. For above-median debtors,
however, the Code prescribes that “amounts reasonably necessary to be expended . . . shall be
determined in accordance with subparagraphs (A) and (B) of section 707(b)(2).” Code §
1325(b)(3). Subparagraphs (A) and (B) of § 707(b)(2), in turn, spell out what is commonly called
the “means test.”
The means test and its incorporation into the PDI Test for above-median debtors were
added to the Code by The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

2 https://www.justice.gov/ust/eo/bapcpa/20180501/bci_data/median_income_table.htm
(“BAPCPA”).3 The means test is the “heart” of BAPCPA and is designed to ensure that debtors
who can pay their debts do so.4 Subparagraphs (A)(ii), (iii), and (iv) of the means test detail a list
of expenses above-median debtors may deduct from current monthly income to calculate monthly
disposable income. The only deduction under the means test at issue in this case is found at §

707(b)(2)(A)(iv). That section allows a deduction for “debtor’s expenses for payment of all
priority claims (including priority child support and alimony claims) [which] shall be calculated
as the total amount of debts entitled to priority, divided by 60.” Code § 707(b)(2)(A)(iv). Debtor’s
primary argument is that his Attorney’s Fees are a priority claim deductible under this provision
of the means test. The Court refers to this proposed deduction as the “means test deduction.”
Debtor accomplishes the means test deduction by including his Attorney’s Fees as a line
item deduction on his amended Official Form 122C-2, Chapter 13 Calculation of Your Disposable
Income (“Form 122C-2”) filed at docket number 28. Bankruptcy Rule 1007(b)(6) requires above-
median debtors to file “a calculation of disposable income made in accordance with § 1325(b)(3),
prepared as prescribed by the appropriate Official Form.” Fed. R. Bankr. P. 1007(b)(6). Form

122C-2 is the appropriate Official Form for above-median debtors to take applicable deductions
under the means test and is designed to track the deductions listed in § 707(b)(2)(A).5
Line 35 of Form 122C-2 provides a deduction for “priority claims – such as a priority tax,
child support, or alimony – that are past due as of the filing of the bankruptcy case.” Line 35 of

3 The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8, 110 Stat. 23.

4 See Ransom v. FIA Card Servs., N.A., 562 U.S. 61, 64 (2011) (citing H.R. Rep. No. 109–31, pt. 1, p. 2 (2005)).

5 Below-median debtors do not complete Form 122C-2 because the means test is not applicable to them. Instead, they
rely primarily on Schedule J to deduct expenses in calculating PDI. Schedule J, however, does not include deductions
for priority claims, trustee fees, and arrearage payments on secured debt. Nonetheless, in practice these amounts are
generally accounted for in calculating the minimum payment to nonpriority unsecured creditors. See In re Hemker,
2015 Bankr. LEXIS 3122, *8 (Bankr. C.D. Ill. Sep. 8, 2015) (“below median income debtors are allowed to pay
attorney fees from their disposable income before they pay nonpriority unsecured debtors”).
Debtor’s amended Form 122C-2 takes a deduction of $7,651, which includes $3,1516 for two
priority tax claims and $4,500 for the Attorney’s Fees. With the Attorney’s Fees included in the
deduction, Debtor calculates his monthly disposable income at $639.49. Debtor multiplies this
monthly income by 60 (his ACP) to get a total PDI of $38,360.40, which Debtor proposes to pay

to nonpriority unsecured creditors under the Plan.
Trustee’s only objection is that Debtor may not include the Attorney’s Fees in line 35 or
anywhere else in Form 122C-2. Trustee contends that neither Form 122C-2 nor the Code allow
any deduction for attorney’s fees when calculating disposable income. Trustee is correct that line
35 of Form 122C-2 excludes chapter 13 attorney’s fees, as the Committee Notes make clear:
Priority debt, deductible pursuant to § 707(b)(2)(A)(iv), is treated
on a single entry line, also requiring division by 60. The instruction for this
line makes clear that only past due priority debt—not anticipated debts—
should be included. Thus, future support or tax obligations, and future fees
that might be payable to a Chapter 13 debtor’s attorney, are not included.

Official Form 122 (Committee Note C.2). If Attorney’s Fees are excluded from the deduction,
Debtor’s monthly disposable income becomes $714.49, which Trustee multiplies by 60 to get a
total PDI of $42,869.40. Thus, deducting the Attorney’s Fees in line 35 results in a dollar-for-
dollar reduction of total PDI.
In response, Debtor argues that even if Trustee is correct that Form 122C-2 and §
707(b)(2)(A)(iv) do not allow the means test deduction, he may treat his Attorney as an “unsecured
creditor” under § 1325(b)(1)(B) and pay the Attorney’s Fees from the PDI pot of $42,869.40.
Because the Attorney’s Fees must be paid before nonpriority unsecured claims, Debtor argues, the

6 The two priority tax claims are a $1,055.96 claim filed by the Georgia Department of Revenue and a $2,035.72 claim
filed by the IRS, which total $3,091.68 instead of $3,151. No dispute exists as to Debtor’s inclusion of both priority
tax claims in line 35, but it appears Debtor includes approximately $60 of unsecured portions of the two claims. The
total deduction in line 35 should be $7,591.68 instead of $7,651. While this amount is small, confirmation of the Plan
will be conditioned upon Debtor amending his Form 122C-2 and Plan to reflect appropriate changes for the proper
amount of priority tax claims.
Attorney’s Fees should be deducted from the PDI pot before determining the minimum payment
to nonpriority unsecured creditors. The Court refers to this proposed deduction as the “pot
deduction.” Trustee argues the term “unsecured creditors” is limited to nonpriority unsecured
creditors and Debtor’s Attorney is not a “creditor” as defined in the Code.

Importantly, Debtor does not request to use both deductions; he seeks only one or the other.
Either deduction produces the same result: nonpriority unsecured creditors will receive $4,500
less than they would receive if Debtor were not allowed to deduct the Attorney’s Fees under either
theory. The Plan is confirmable if Debtor may deduct Attorney’s Fees under either theory.
IV. ANALYSIS
A. Existing Case Law
Only a few cases have addressed the deductibility of attorney’s fees under the PDI Test
post-BAPCPA, but a clear majority has emerged allowing a deduction for attorney’s fees for
above-median debtors. Most of these cases have adopted or endorsed the pot deduction for
attorney’s fees. See In re Jiter, 2011 WL 477829, *1 (Bankr. E.D. Wis. Feb. 3, 2011); In re

Minahan, 394 B.R. 116, 128 n.27 (Bankr. W.D. Va. 2008); In re Nething, 2008 WL 2246072, *4
(Bankr. E.D. Wis. May 30, 2008); In re Brown, 2008 Bankr. LEXIS 1227 (Bankr. S.D. Ohio Apr.
15, 2008); In re Echemen, 378 B.R. 177, 182 (Bankr. S.D. Ohio 2007); In re Puetz, 370 B.R. 386,
390 (Bankr. D. Kan. 2007). Several cases, however, have adopted, or at least acknowledged the
propriety of, the means test deduction. See In re Williams, 394 B.R. 550, 564 (Bankr. D. Col.
2008) (“Section 707(b)(2)(A)(iv) allows an above-median income debtor to subtract all priority
claims in arriving at PDI. Such deductible priority claims must include those expenses given
administrative expense priority by § 503.”); In re Hemker, 2015 Bankr. LEXIS 3122, *7 (Bankr.
C.D. Ill. Sep. 8, 2015) (technically adopting the pot deduction but basing its ruling in part on
court’s reading of § 707(b)(2)(A)(iv) as including attorney’s fees); In re Johnson, 408 B.R. 811,
814 n.11 (Bankr. W.D. Mo. 2009) (noting that technically attorney’s fees should be deducted as a
priority claim pursuant to § 707(b)(2)(A)(iv) even though local practice allowed the pot
deduction).

While all of the foregoing cases adopt or endorse one of the deductions for attorney’s fees,
the cases struggle to reconcile how the deductions fit into the framework of the PDI Test, the
means test, their respective applications to above and below-median debtors, and Form 122C-2.
The cases are replete with phrases such as “impossible choice,” “dueling absurd results,”
“inconsistent provisions,” and “unfortunate omissions.” It is no secret that “the final version of
BAPCPA has been roundly criticized as poorly crafted, containing a multitude of ‘typos, sloppy
choices of words, hanging paragraphs, and inconsistencies .... [as well as] largely pointless but
burdensome new requirements, overlapping layers of screening, mounds of new paperwork, and
structural incoherence.’”7 The issue before the Court appears to be no exception, and the Court
joins in the apparent frustration of other courts that have previously struggled with the question

before it.
Most of the frustration stems from inclusion of a deduction for “priority claims”8 in §
707(b)(2)(A)(iv) of the means test coupled with use of the term “unsecured creditors” in §
1325(b)(1)(B). Many courts have held the plain meaning of “unsecured creditors” normally
includes both priority and nonpriority unsecured creditors. Applying that plain meaning in the
context of § 1325(b)(1)(B), however, would allow debtors to deduct priority claims in calculating

7 In re Gonzalez, 597 B.R. 133, 141 (Bankr. D. Colo. 2018) (citing Jean Braucher, The Challenge to the Bench and
Bar Presented by the 2005 Bankruptcy Act: Resistance Need Not Be Futile, 2007 U. Ill. L. Rev. 93, 97 (2007)).

8 As discussed below, the term “priority claim” does not appear in any other substantive provision of the Code, and
its only other appearance in the Code is in the heading of a provision applicable only in railroad reorganizations.
PDI (i.e., a means test deduction) while simultaneously paying those same priority claims with
PDI (i.e., the pot deduction). This would allow debtors to double count priority claims to the
detriment of nonpriority unsecured claims, which courts appear to unanimously agree (and this
Court agrees) is an absurd result. Thus, most cases have interpreted “unsecured creditors” as used

in § 1325(b)(1)(B) to mean nonpriority unsecured creditors. E.g., In re Echemen, 378 B.R. at 181-
82; In re Puetz, 370 B.R. at 390; In re McDonald, 361 B.R. 527, 531 (Bankr. D. Mt. 2007); In re
Wilbur, 344 B.R. 650, 654 (Bankr. D. Utah 2006).
This interpretation, however, leads to its own set of difficulties. For instance, below-
median debtors generally still use schedule J to calculate disposable income, but schedule J does
not include any deductions for priority claims. Some courts have expressed concern that
interpreting “unsecured creditors” to include only nonpriority unsecured creditors may lead to the
conclusion that below-median debtors may not pay priority claims with projected disposable
income, meaning their plans would never be feasible without some source of payment outside of
income. See, e.g., Williams, 394 B.R. at 564; Echemann, 378 B.R. at 182 n.7. The solution to the

dueling absurdities of double counting priority claims for above-median debtors and unavoidable
infeasibility for below-median debtors is to somehow read the statute so that “the effective result
[should be] the same for all debtors—priority unsecured claims can be counted once, no more, no
less, in determining which funds are left for nonpriority unsecured creditors.” Williams, 394 B.R.
at 564 (quoting In re Echemann at 82 n.7).
A second difficulty arises in cases in which courts, in apparent reliance on Form 122C-2,
exclude administrative expenses and other post-petition priority claims from the definition of
“priority claims” under § 707(b)(2)(A)(iv).9 See, e.g., In re Puetz, 370 B.R. at 386; In re Minahan,

9 As discussed in detail below, the Court disagrees with this conclusion.
394 B.R. at 128 n.7. While deciding (or at least accepting) that there is no means test deductions
for attorney’s fees and other administrative expenses, they nonetheless find it would be
inconsistent to require debtors to pay such claims as priority claims under a plan while not allowing
such claims to be deducted from the PDI pot. To reconcile the inconsistency, these courts adopt

the pot deduction for any priority claims not otherwise captured by the means test. See In re Puetz,
370 B.R. at 392 (“the Court should logically and, in fact, plainly, read ‘unsecured creditors’ in §
1325(b)(1)(B) as a catchall phrase to address creditors not specifically referenced elsewhere”).
Thus, to reconcile multiple dueling absurdities, some courts have concluded that “unsecured
creditors” under § 1325(b)(1)(B) rests in superposition like Schrödinger’s cat,10 simultaneously
excluding and including priority creditors until measured by an above-median or below-median
debtor. Despite these difficulties, the one thing all but one of the cases agree upon is that attorney’s
fees should be deducted when calculating the minimum payment to nonpriority unsecured
creditors.
Trustee cites, and the Court’s own research has found, only one case allowing no deduction

for attorney’s fees. See In re Amato, 366 B.R. 348, 353 (Bankr. D. N.J. 2007). In Amato, the
Court appears to rely almost exclusively on Form 122C-2 to deny any deduction for attorney’s
fees, despite having apparent misgivings about such a conclusion. The court acknowledged that
the absence of attorney’s fees on the form was an “unfortunate omission,” but the court felt
“constrained by the language of Official Form [122C-2] and, thus, will not read more into the
language of the [sic] set forth in the prescribed Official Form so as to provide for the deduction of
debtor's attorneys fees.” Id. Although Form 122C-2 does not include a means test deduction for
attorney’s fees, the Committee Notes to the form clearly endorse the pot deduction:

10 The famous thought experiment of quantum physicist Erwin Schrödinger imagined a cat simultaneously dead and
alive.
The Chapter 13 form does not provide a deduction from disposable
income for the Chapter 13 debtor’s anticipated attorney fees. No specific
statutory allowance for such a deduction exists, and none appears necessary.
Section 1325(b)(1)(B) requires that disposable income contributed to a
Chapter 13 plan be used to pay “unsecured creditors.” A debtor’s attorney
who has not taken a security interest in the debtor’s property is an unsecured
creditor who may be paid from disposable income.
Official Form 122 (Committee Note D.3). It is not clear why Amato did not follow the Committee
Note endorsing the pot deduction, but it relied in part on two decisions rejecting the pot deduction
for other priority claims and trustee fees. See In re Wilbur, 344 B.R. 650; In re McDonald, 361
B.R. 527.
Neither Wilbur nor McDonald addressed attorney’s fees directly. In Wilbur, the question
was whether a debtor could deduct priority claims twice, once under the means test and again from
the PDI pot. Which priority claims are at issue in Wilbur is unclear, but attorney’s fees are not
mentioned and there is no apparent dispute the priority claims were properly included as means
test deductions. The court determined that allowing the pot deduction as well would be absurd
because it allowed for double counting. The court thus interpreted the term “unsecured creditors”
to exclude priority creditors. In re Wilbur, 344 B.R. at 654-55. In McDonald, the Court similarly
ruled that trustee’s fees are not included in the “unsecured creditors” pool because such fees are
deducted in the PDI calculation and double counting would be absurd. McDonald likewise
concluded the term “unsecured creditors” does not include priority creditors. In re McDonald 361
B.R. at 530-31.
Importantly, Amato did not analyze the language of § 707(b)(2)(A)(iv) and whether
attorney’s fees should be included in the means test deduction. Instead, Amato relied on Form
122C-2’s exclusion of attorney’s fees from the means test deduction. Several courts, however,
have recognized that, despite the absence of a deduction on Form 122C-2, the plain language of §
707(b)(2)(A)(iv) includes allowed attorney’s fees entitled to priority. In re Williams, 394 B.R. at
563-64 (finding that § 707(b)(2)(A)(iv) allows for deduction of attorney’s fees even though the
form omits such a deduction); In re Hemker, 2015 Bankr. LEXIS 3122 at *7 (characterizing the
lack of deduction for attorney’s fees of a chapter 13 debtor on the official form as an “unfortunate
omission”).

In short, the Court disagrees with Amato and concurs with the majority conclusion that
attorney’s fees should be deducted before calculating the minimum amount to be paid to
nonpriority unsecured creditors. Whether that is more appropriately done through a means test
deduction or pot deduction is analyzed below.
B. The Means Test Deduction
1. The Plain Meaning of “Priority Claims” Includes Allowed Administrative Expenses
The Court begins its analysis, as it always must, with the language of the Code. If “the
statute’s language is plain, ‘the sole function of the courts is to enforce it according to its terms.’”
U.S. v. Ron Pair Enters., Inc., 489 U.S. 235, 241 (1989). Debtor first argues that he is entitled to
deduct his Attorney’s Fees as part of the means test, specifically as a “priority claim” under §
707(b)(2)(A)(iv).11

Section 707(b)(2)(A)(iv) allows a deduction for “debtor’s expenses for payment of all
priority claims (including priority child support and alimony claims) [which] shall be calculated
as the total amount of debts entitled to priority, divided by 60.” Code § 707(b)(2)(A)(iv). The
question before the Court thus seems rather simple: do attorney’s fees for a chapter 13 debtor
count as a “priority claim” for purposes of § 707(b)(2)(A)(iv)? The Court finds that they do.

11 See supra, pt. III, p. 5.
“Priority claim” is not defined in the Code, but “claim” is defined broadly as
(A) right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured, or

(B) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured, or unsecured.
Code § 101(5). The definition of claim suffers from few limitations. The only question to answer
when determining whether something is a claim is whether the something is a right to payment. If
so, then the something is a claim. The Court easily concludes that the Attorney’s Fees represent a
right to payment held by Debtor’s Attorney. The Attorney’s Fees are a claim.
“Priority” is not defined by the Code explicitly, but § 507 is titled “Priorities” and provides
in subsection (a) a priority order for claims and expenses. Code § 507(a). Subsection (a)(2)
includes as the second priority category “administrative expenses allowed under section 503(b) of
this title . . . .” Code § 507(a)(2). Section 503(b), in turn, is titled “Allowance of administrative
expenses” and provides that “after notice and a hearing, there shall be allowed administrative
expenses, including—(2) compensation and reimbursement awarded under section 330(a) of this
title . . . .” Code § 503(b). Section 330(a)(4), in turn, provides for the allowance of “reasonable
compensation to [a chapter 13] debtor’s attorney.” Upon confirmation of the Plan, the Attorney’s
Fees will be allowed under § 330(a)(4). The Attorney’s Fees, which no one has challenged as to
reasonableness, will therefore be an allowed administrative expense under § 503(b)(2) entitled to
priority under § 507(a)(2).
Having determined the Attorney’s Fees are a claim entitled to priority, it seems
straightforward to conclude that the Attorney’s Fees easily fall within the meaning of “priority
claims” and may be deducted pursuant to § 707(b)(2)(A)(iv). Several courts have reached the
same conclusion. See In re Williams, 394 B.R. at 564; In re Hemker, 2015 Bankr. LEXIS 3122,
*7; In re Johnson, 408 B.R. at 814 n.11.
Trustee disputes this straightforward analysis of the plain meaning of “priority claims” and
argues for a more nuanced approach. Trustee cites the well-known canon of statutory construction

that “interpretation of a statutory section by examining its plain language requires more than
reviewing words or sub-sections in isolation; it requires consideration of the context, reading all
relevant statutory provisions together as a whole.” In re Echeman, 378 B.R. at 180. The Court
agrees this canon applies but disagrees as to the result it dictates.
Trustee argues that reading “priority claim” in the context of §§ 507, 503(b), and 330
requires an interpretation that excludes all administrative expenses, including attorney’s fees. The
basic reasoning is that § 507 makes a careful distinction between claims and expenses, and neither
§§ 507, 503(b), nor 330 ever refer to an administrative expense or attorney’s fees as a claim.
Therefore, a claim and an expense are something different. By using “priority claims,” Trustee
argues, § 707(b)(2)(A)(iv) harnesses the distinction between a claim and an expense to exclude

administrative expenses. Trustee offers no authority in support of her position that an expense is
something other than a claim or that an administrative expense is not a priority claim, whether
under § 707(b)(2)(A)(iv) or otherwise. The Court’s own research found no case even addressing
this possibility.12 While Trustee’s argument has some facial appeal when considering only §§ 507,
503(b), and 330, reading the terms at issue in the context of the Code as a whole confirms that
administrative expenses are priority claims.

12 Several of the cases adopting the pot deduction implicitly conclude that “priority claims” under § 707(b)(2)(A)(iv)
does not include administrative expenses, but they do so without substantial analysis and appear to rely either on Form
122C-2 or two sentences in an article written by Judge Eugene Wedoff before BAPCPA went into effect. See Eugene
R. Wedoff, Means Testing in the New § 707(b), 79 AM. BANKR. L.J. 231, 273 (Spring 2005). As discussed below,
the Court disagrees with Form 122C-2’s exclusion of attorney’s fees, and the cited portion of Judge Wedoff’s article
is not applicable to chapter 13 cases.
Every priority-implementing provision in chapters 7, 9, 11, 12, and 13 uses the word
“claim” in reference to administrative expenses. For example, § 726 gives top priority to “payment
of claims of the kind specified in, and in the order specified in, section 507 of this title . . . .” Code
§ 726(a)(1) (emphasis added); see also Code §§ 752(a) and 766(h) and (i). No reference to an

“expense” is to be found in § 726(a)(1), but it is beyond dispute that the “claims” in § 726 include
administrative expenses. Sections 943(b)(5) and 1129(a)(9) require all chapter 9 and 11 plans to
pay administrative expenses in full. Those sections reference only “claims” and not “expenses,”
each using the word “claim” four separate times specifically in reference to § 507(a)(2)
administrative expenses. Section 1123(a)(1) uses the single word “claim” to commingle
administrative expenses with other priority claims that need not be classified in chapter 11 plans.
See Code § 1123(a)(1) (requiring plans to “designate . . . classes of claims, other than claims of a
kind specified in section 507(a)(2) [administrative expenses], 507(a)(3) [unsecured 502(f) claims],
or 507(a)(8) [priority taxes]”). All of these Code sections unquestionably consider administrative
expenses to be “claims” and never once use the term “expense.”

Closer to home for chapter 13 cases, § 1322(a)(2) requires chapter 13 plans to “provide for
the full payment, in deferred cash payments, of all claims entitled to priority under section 507 of
this title, unless the holder of a particular claim agrees to a different treatment of such claim . . . .”
Code § 1322(a)(2) (emphasis added). Again, the section uses only the term “claim” in reference
to § 507 without a single mention of “expenses,” yet the section is commonly understood to include
administrative expenses. See, e.g., 8 COLLIER ON BANKRUPTCY, ¶ 1322.03 (16th ed.) (“by virtue
of section 1322(a)(2), the plan must propose that all allowed claims entitled to priority under
section 507, including filing fees and allowed administrative expenses . . . be paid in full”); In re
Busetta-Silvia, 314 B.R. 218 (B.A.P. 10th Cir. 2004); In re Swan, 98 B.R. 502 (Bankr. D. Neb.
1989) (fees for debtor’s counsel are administrative expenses allowed under § 503, entitled to
priority under § 507, and entitled to full payment under § 1322); Cornelison v. Wallace (In re
Cornelison), 202 B.R. 991 (D. Kan. 1996) (post-confirmation attorneys’ fees are priority
administrative expenses entitled to full payment under § 1322(a)(2)); In re Hanson, 223 B.R. 775,

776–81 (Bankr. D. Or. 1998) (“a plan must provide for payment in full of administrative claims.
11 U.S.C. § 1322(a)(2)”). Section 1326(b)(1) specifies when administrative expenses must be paid
under a plan and uses the term “claim” specifically in reference to § 507(a)(2), i.e., administrative
expenses. Chapter 12 is no different. See Code §§ 1222 and 1226 (similarly using the word
“claim” in reference to administrative expenses). The Code is clear that administrative expenses
are in fact claims despite the distinction between claims and expenses in § 507.
Is there a distinction to be made between the foregoing Code sections and §
707(b)(2)(A)(iv), which has the unique distinction of being the only Code section to use the term
“priority claims” in a substantive provision? Nearly every Code section referring to § 507 uses
the phrase “claims of the kind specified in . . . section 507” and, when needed, lists specific

subsections to be included (or excluded). See, e.g., §§ 726(a), 1123(a)(1), 1129(a)(9), 1226(b)(1),
and 1326(b)(1).13 The Code itself offers little insight into any specialized meaning of the term
“priority claim,” but what insight is offered supports a meaning that includes administrative
expenses. The only other appearance of the term “priority claims” in the Bankruptcy Code is in
the heading14 of § 1171, found in subchapter IV of chapter 11 and applicable only to railroad

13 Sections 1222(a)(2) and 1322(a)(2) uniquely use the phrase “claims entitled to priority under section 507,” which
is more like the term “priority claims” than the standard reference of “claims of a kind specified in 507.”

14 While statutory headings “cannot substitute for the operative text of the statute[, they] ‘are tools available for the
resolution of a doubt about the meaning of a statute.’” Florida Dep. of Rev. v. Piccadilly Cafeterias, Inc. 554 U.S.
33, 47 (2008) (citing Porter v. Nussle, 534 U.S. 516, 528, 122 S.Ct. 983, 152 L.Ed.2d 12 (2002)).
reorganizations. That section, which appeared in the original enactment of the Code,15 specifies
two types of claims given priority in railroad reorganizations. The first category of “Priority
Claims” under the section is for personal injury claims that shall be “paid as an administrative
expense.” Code § 1171. Thus, the only other appearance of the term “priority claims” in the Code

predates § 707(b)(2)(A)(iv) by over twenty-five years and explicitly includes an administrative
expense.
2. Legislative History
If any ambiguity remains after reference to the Code itself, the Code’s legislative history
repeatedly confirms that the term “priority claim” includes administrative expenses. The Senate
Report for § 364, as originally enacted, twice uses the term “priority claim” explicitly in reference
to administrative expenses—once to the specific administrative expenses authorized under § 364
and once in reference to all administrative expenses given priority under § 507(a)(1). S. Rep. No.
989, 95th Cong. 2d Sess. at 58, reprinted in 1978 U.S.C.C.A.N. 5844. Likewise, the Senate Report
accompanying § 726 explicitly refers to “priority claimants” without any exclusion for

administrative expense claimants. Id. at 97. The Senate Report accompanying §§ 1123(a) and
1322(a)(2) uses the term “priority claims” in reference to § 507(a)(2) administrative expense
claims. Id. at 119, 141.
The legislative history of BAPCPA further bolsters the Court’s interpretation of “priority
claims.” While the main body of the House Report accompanying BAPCPA says essentially
nothing about § 707(b)(2)(A)(iv) or the term “priority claims” as used therein, footnote 61 makes
clear that “a debtor’s monthly expenses may also include . . . claims and expenses entitled to
priority under section 507 of the Bankruptcy Code . . . .” H. Rep. 31, 109th Cong. at 13 n.61,

15 Bankruptcy Code of 1978, Pub. L. No. 95-598, § 101, 92 Stat. 2643.
reprinted in 2005 U.S.C.C.A.N. 99 (emphasis added). This statement directly contradicts
Trustee’s main thesis—that “priority claims” exclude expenses under § 507—and directly supports
Debtor’s position and the Court’s view. Further, contrary to Trustee’s argument, the fact that the
House Report does not explicitly reference a deduction for attorney’s fees does not indicate an

intent by Congress to exclude attorney’s fees. No priority claims garner mention in the legislative
history specific to § 707(b)(2)(A)(iv) other than child support and alimony claims (which also are
the only two meriting specific mention in the statute). The Court does not read the Trustee’s
argument to be that child support and alimony are the only priority claims worthy of deduction.
The Court reads nothing into the absence of a specific deduction for attorney’s fees in the
legislative history or the statute itself because a specific reference would be redundant.
That attorney’s fees are not specifically mentioned in the legislative history or the statute
supports the Court’s interpretation. While no other provision of the Code referencing § 507 uses
the term “priority claim,” Congress knows how to exclude specific classes of claims under § 507
with clarity and precision. It has never used the general term “priority claim” to exclude a type of

claim entitled to priority. If Congress intended a new paradigm for excluding administrative
expenses from the scope of claims entitled to priority, the Court expects it would do so with clarity,
or at least some mention of such intent in the legislative history. It would be curious for Congress
to do it with a phrase that the Code, its legislative history, and BAPCPA’s legislative history
commonly and historically understood to include administrative expenses.
The purpose behind the means test as incorporated into the PDI Test also supports the
Court’s interpretation of priority claims to include attorney’s fees. In Ransom v. FIA Card Servs.,
N.A., 562 U.S. 61 (2011), the Supreme Court analyzed whether a chapter 13 debtor was entitled to
take a specific deduction under the means test. The question in Ransom was not whether the statute
provided for a specific category of expense, but whether a specific debtor qualified to take the
deduction in a category in which the debtor had no actual expenses. In finding that the debtor
could not take the deduction, the Court stated:
[D]ebtor should be required to qualify for a deduction by actually incurring
an expense in the relevant category. If a debtor will not have a particular
kind of expense during his plan, an allowance to cover that cost is not
“reasonably necessary” within the meaning of the statute.
Finally, consideration of BAPCPA's purpose strengthens our
reading of the term “applicable.” Congress designed the means test to
measure debtors' disposable income and, in that way, “to ensure that [they]
repay creditors the maximum they can afford.” This purpose is best
achieved by interpreting the means test, consistent with the statutory text,
to reflect a debtor's ability to afford repayment.
562 U.S. at 70-71. The Court agrees with Debtor that Trustee’s position places too much emphasis
on “repay creditors the maximum” without sufficient consideration for what debtors can “afford.”
Unlike in Ransom, Debtor here actually has the expense he seeks to deduct. Moreover, that
expense must be paid under the Plan, and it must be paid before all other unsecured creditors. See
Code §§ 1322(b)(2) and 1326(b)(1). The purpose of the means test is “best achieved by
interpreting [it], consistent with the statutory text, to reflect a debtor's ability to afford repayment.
Id. at 71. That purpose is not served by interpreting the means test to exclude actual expenses that
a debtor must pay under a plan before other unsecured creditors.
Pre-BAPCPA practice also supports the Court’s interpretation of “priority claims.” Prior
to BAPCPA, chapter 13 plans “routinely paid the debtor's net income figure first toward priority
claims in the order set forth in § 507—which included . . . postpetition or administrative expenses
(such as attorney's fees and trustee's compensation)—and then applied the balance to the
nonpriority unsecured creditor class.” In re Williams 394 B.R. at 563. Courts should not “read
the Bankruptcy Code to erode past bankruptcy practice absent a clear indication that Congress
intended such a departure.” Hamilton v. Lanning, 560 U.S. 505, 517 (2010). Given the lack of
any clear intention to alter the common understanding of “priority claim” or to specifically exclude
attorney’s fees from the deduction, the Court will not read “priority claims” to erode the pre-
BAPCPA practice of allowing debtor’s to pay attorney’s fees before calculating payments to
nonpriority unsecured creditors.

What, then, is to be made of § 507’s seemingly careful distinction between expenses and
claims? Trustee argues that the distinction between “expense” and “claim” is to emphasize an
intended difference in their treatment. The Court agrees. But Trustee misconstrues which term’s
treatment is being emphasized to the exclusion of the other. While the Code does not use the term
“claim” or “priority claim” to the exclusion of administrative expenses, the Code does use the term
“administrative expense” to specifically designate certain types of claims as administrative
expenses under § 503(b). See, e.g., Code §§ 364(a)-(c), 1114(e)(2), 1116(6)(B), and 1171(a).
Administrative expenses generally must be paid before any other unsecured claims, even most
priority claims, and often are paid during the pendency of cases in advance of other creditors, even
other priority creditors. See, e.g., Code § 1326(b)(1). Administrative expenses are priority claims

with benefits. It makes sense that the Code would employ a unique term to designate which
priority claims are bestowed with these additional benefits. The distinction between claims and
expenses in § 507 is not made for the purpose of excluding administrative expenses from the
benefits of priority treatment. The distinction is made for the converse purpose—to exclude most
priority claims from the additional benefits that attach to administrative expenses.
3. Other Arguments
Trustee also argues that the distinction between “expenses” and “claims” in § 507 is the
result of administrative expenses not meeting the definition of a prepetition claim. In that way,
she argues, they are more like post-petition claims under § 1305, which are not deductible under
the PDI Test. Since § 1305 claims are a type of post-petition claim that do not get deducted, the
argument goes, then attorney’s fees, as a post-petition administrative expense, should not be
deducted either. The Court is not persuaded. Courts have rejected the argument that a chapter 13
debtor’s attorney’s fees (or administrative expenses) are the same thing as § 1305 claims. In re

Hanson, 223 B.R. 775, 776–81 (Bankr. D. Or. 1998) (“The postconfirmation fees and costs of
debtor’s counsel related to the Chapter 13 case are administrative expenses, a specific category of
post-petition debts distinct from the more general types of consumer debts covered by section
1305(a)(2).”); In re Phillips, 219 B.R. 1001, 1009 (Bankr. W.D. Tenn. 1998) (disapproving
practice of debtor’s attorney filing post-petition claims under § 1305 for routine prepetition
attorneys’ fees and reimbursement of expenses). Administrative expenses and § 1305 claims are
two different things, with different characteristics and different treatment under the Code. Unlike
administrative expenses, § 1305 claims are not required to be paid under a plan and obtain no
special priority under the Code. The fact that § 1305 claims are not deductible under the PDI Test
does not mean that administrative expenses are not deductible as priority claims.16

Trustee offers one other statutory argument in support of her position that “priority claims”
exclude administrative expenses. Trustee argues that the separate deduction for the “actual
administrative expenses of administering a chapter 13 plan” (i.e., chapter 13 trustee fees) found in
§ 707(b)(2)(A)(ii)(III) shows that no other administrative expenses should be deducted in a
debtor’s PDI calculation. Trustee invokes the canon of statutory construction expressio unius est
exclusio alterius and cites to a Judge Wedoff article in support. See Eugene R. Wedoff, Means

16 Further, while Trustee’s statements are supported by case law, it is not true that administrative expenses cannot be
prepetition claims. Section 503(b) contemplates numerous administrative expenses that arise prepetition. See, e.g., §
503(b)(9) (value of goods delivered within 20 days before the petition date); § 503(b)(3)(A) (fees of petitioning
creditor); § 502(b)(3)(E) (fees of a prepetition custodian); § 503(b)(4) (professional fees of petitioning creditors or
prepetition custodians); see also In re Busetta-Silvia, 314 B.R. 218 (B.A.P. 10th Cir. 2004) (attorney’s fees for
prepetition work can qualify as administrative expense entitled to priority).
Testing in the New § 707(b), 79 AM. BANKR. L.J. 231, 273 (2005). The Court disagrees the
canon applies here. Judge Wedoff in his article talks about chapter 7 debtors taking deductions
for hypothetical chapter 13 administrative expenses, not actual chapter 13 debtors taking
deductions for actual administrative expenses allowed by the Court. It makes sense that chapter 7

debtors, who do not have administrative expenses, cannot take deductions for hypothetical chapter
13 expenses because, as Trustee states, one must “be clairvoyant in knowing what and how much
the Court may award.” Trustee’s Brief, Doc. No. 35, p. 10.
Not only would it be difficult from a practical perspective, but allowing chapter 7 debtors
to deduct purely hypothetical administrative expenses could lead to all sorts of shenanigans. As
Trustee again points out, however, chapter 13 trustee fees are an exception: “The fact that the list
[of deductions] only includes one type of administrative expense is logical because the Chapter 13
Trustee fee is the only amount that is statutorily mandated for all cases and is neither negotiated
nor controlled by the debtor.” Id. at p. 10. The Court completely agrees with this statement with
one major qualification—the list of deductions in the means test includes only one type of

hypothetical administrative expense. Unlike any other administrative expenses, including
attorney’s fees, all chapter 13 debtors have chapter 13 trustee fees, and they are subject to
reasonable estimation without much room for manipulation. It makes sense that only one
hypothetical administrative expense is allowed as part of the means test.17
The Court disagrees that the canon applies for purposes of the PDI Test in an actual chapter
13 case with actual administrative expenses that Debtor is required to pay “as a claim entitled to

17 While not an administrative expense, the means test also contemplates a deduction for cure payments on secured
debt in a hypothetical chapter 13 case. See Code § 707(b)(2)(A)(iii)(II). Like trustee fees, cure payments are known
at the time of filing a chapter 7 case and would not require significant clairvoyance to estimate or allow much room
for manipulation.
priority under § 507.” Code § 1322(b). There is no need to engage in hypotheticals with respect
to the Attorney’s Fees. Trustee raises no objection to the reasonableness of the fees, and the fees
will be an actual allowed administrative expense immediately upon confirmation of the Plan. The
Court sees a sharp difference between, on the one hand, a chapter 13 debtor with actual attorney’s

fees that Debtor must pay under the Plan, which have ostensibly been negotiated (or at least
shopped), and are subject to review and allowance under § 330, and, on the other hand, a chapter
7 debtor whose chapter 13 attorney’s fees are purely hypothetical and without the benefit of
negotiation, shopping, or review under § 330. The means test contemplates a deduction for actual,
i.e., allowed, administrative expenses in § 707(b)(2)(A)(iv) while foreclosing any deductions for
hypothetical administrative expenses, excepting chapter 13 trustee fees.
The separate deduction for trustee fees in chapter 13 cases may further be explained by the
fact that standing chapter 13 trustee fees work differently than other administrative expenses. In
fact, standing trustee fees technically may not even be administrative expenses because they are
statutorily mandated and not subject to allowance by the Court, even though they are “loosely
referred to” as administrative expenses. Drake, Bonapfel, Goodman, supra, at § 6:7.18 Almost all

administrative expenses must be allowed after notice and a hearing before payment, see Code §
503(a), and entitlement to priority under § 507(a)(2) is conditioned upon allowance under § 503(b).
Not so for standing chapter 13 fees, which never come before the Court for allowance but which
still enjoy priority through § 1326(b)(2). Further, standing trustee fees really do not accrue until
payments are made under the plan, so they remain, for the most part, hypothetical at the time of

18 Use of the term “administrative expense” in § 707(b)(2)(A)(ii)(III) makes this argument harder, but the argument is
supported by the separate provisions in § 1326(b) for administrative expenses and standing trustee fees. It could be
that the use of the term “administrative expense” in § 707(b)(2)(A)(ii)(III) is a conflation between standing chapter 13
fees and appointed trustees, or just sloppy drafting.
confirmation. But unlike every administrative expense claim that is not known at the time of
confirmation, it is certain that trustee fees will arise during the term of the plan, and a reasonably
accurate way to estimate them exists. Thus, the means test allows for a separate deduction of all
trustee fees that are likely to arise over the course of a plan, even though they will never be allowed

by the Court and remain hypothetical at the time of confirmation.
Even if the separate deduction for the “administrative expense” of chapter 13 trustee fees
in the means test creates a small redundancy vis-à-vis the deduction for “priority claims,” the Court
finds any mild redundancy to be the unfortunate result of inartful drafting and the wholesale
incorporation of the chapter 7 means test into chapter 13. The Court is satisfied that its analysis
of the term “priority claim,” the policies behind the PDI Test and means test, pre-BAPCPA
practice, the reasons analyzed above for including a separate deduction for trustee fees, and policy
concerns discussed below significantly outweigh any minor redundancy.19
Ultimately, the Court discerns no disciplined explanation for why Congress used the term
“priority claims” in § 707(b)(2)(A)(iv) other than expedience and inartful drafting. If Congress

intended to exclude the actual administrative expenses of a chapter 13 debtor in § 707(b)(2)(A)(iv),
it could have done so explicitly in several different ways, such as a simple parenthetical: “priority
claims (excluding administrative expenses),” or it could have indicated somewhere in the text of
BAPCPA or its legislative history that Congress intended to exclude administrative expenses from
the scope of “priority claims.” Instead, Congress picked a term commonly understood to include
administrative expenses with no indication that the common understanding is wrong. The Court
concludes that “priority claim” as used in § 707(b)(2)(A)(iv) includes actual attorney’s fees of a

19 Debtors should not view this redundancy, if it exists, as license to count trustee fees twice when calculating PDI, as
such a result would be absurd. It is perhaps inevitable that in a long list of expenses available for deduction, there
may be categories with some overlap, and certain types of claims may fit into more than one category.
chapter 13 debtor allowed as an administrative expense and entitled to priority under § 507(a)(2),
and such expenses may be deducted as a reasonably necessary expense when calculating an above-
median debtor’s PDI.
C. Form 122C-2

Having concluded that the Code itself allows the means test deduction, the Court next
addresses Form 122C-2. Trustee relies heavily on Form 122C-2, which clearly limits the
deduction for priority claims at line 35 to priority claims “that are past due as of the filing date of
your bankruptcy case.” The limitation to “past due” claims generally excludes attorney’s fees and
other administrative expenses, and the Committee Notes to Form 122, last updated in 2015, clearly
indicate that the deduction for priority claims excludes chapter 13 attorney’s fees.20 Based on its
analysis set forth above, the Court disagrees that the deduction is limited to “past due priority
debt.” Nothing in the language of § 707(b)(2)(A)(iv) creates such a limitation, nor is it clear how
the Committee arrived at its conclusion that only past due priority debts are deductible. The
limitation may make some sense for chapter 7 debtors because most types of priority claims under

§ 507 are, by definition, limited to claims that were due as of the petition date, or that have accrued
and can be liquidated as of the petition date. Administrative expenses are the notable exception,
but chapter 7 debtors generally have no actual administrative expenses, and there is no room in the
deduction for hypothetical claims. Thus, the limitation seems mostly correct for chapter 7 cases.21
The limitation goes too far for chapter 13 cases, at least for attorney’s fees that will be
allowed as an administrative expense at confirmation and paid by a debtor through regular plan

20 See supra pt. III, p. 6.

21 The past due limitation does not necessarily preclude all administrative expenses and could preclude some other
types of priority claims for debtors running businesses. Would § 503(b)(9) claims of a debtor running a business
qualify as a priority debt so long as the invoices on the goods were past due on the petition date? Or is the limitation
intended to exclude all administrative expenses whether owed or not as of the petition date? Likewise, would the
limitation preclude a deduction for priority employee wage claims earned by an employee as of the petition date but
payments.22 By eliminating known, undisputed, and allowed administrative expenses such as
attorney’s fees, Form 122C-2 ignores the plain language of the Code that allows for a deduction
of all priority claims, regardless of when they may be “due.”
The Committee theoretically softens the effect of its conclusion by endorsing the pot
deduction,23 and several courts have taken this endorsement to heart. See, e.g., In re Hemker, 2015

Bankr. LEXIS 3122. The Court, however, declines to ignore its analysis of § 707(b)(2)(A)(iv) in
reliance on the pot deduction and prefers the approach found in In re Williams, 394 B.R. 550. The
Williams court determined the term “priority claims” does include attorney’s fees and allowed the
debtor to calculate PDI with attorney’s fees deducted, even though the official form omits the
deduction. Id. at 563-64. The Court prefers this approach because it is based on the plain language
of the Code and because of potential difficulties of deferring to the pot deduction discussed below.
One difficulty with the pot deduction is whether it is viable under the language of §
1325(b)(1)(B), which requires that all PDI received during the ACP be “applied to make payments
to unsecured creditors under the plan.” The term “creditor” is defined in the Code as an “entity

that has a claim against the debtor that arose at the time of or before the order for relief concerning
the debtor . . . .” Code § 101(10). “Thus, by definition, this term would only include creditors
holding prepetition claims.” In re Williams, 394 B.R. at 563. This interpretation makes the Court
less inclined to follow cases like Puetz and the Committee Notes that seem to treat the pot
deduction as a catchall for any post-petition claim or expense. See In re Puetz, 370 B.R. at 391-
92. In this way, the Committee Notes are contradictory by holding steadfastly to a prepetition

not yet “due” because the debtor filed the petition before pay day? While these examples may be rare in practice, they
highlight the difficulty of the artificial limitation to “past due” amounts.

22 The Court’s ruling is limited to attorney’s fees allowed at or prior to confirmation and paid with a debtor’s income
through regular plan payments.

23 See supra pt. IV.A., p. 11.
limitation appearing nowhere in § 707(b)(2)(A)(iv) while simultaneously endorsing the pot
deduction despite a clear textual basis in the Code limiting “unsecured creditors” to prepetition
claims.
Another difficulty with the pot deduction is the issue of double counting. The Court agrees

with the cases that have interpreted “unsecured creditors” to be limited to “nonpriority unsecured
creditors” because allowing double counting would be absurd. Further, some have found that by
adding the term “unsecured creditors” in § 1325(b)(1)(B) with BAPCPA, Congress intended to
exclude priority claims. In re Williams, 394 B.R. at 565; Drake, Bonapfel, Goodman, supra at §
8:3. The issue of double counting exists for priority claims regardless of whether attorney’s fees
are included in the means test deduction, and including attorney’s fees in the means test deduction
mitigates the need to interpret “unsecured creditors” to include some types of priority claims but
not others. The Court believes the better approach is to interpret the language of § 707(b)(2)(A)(iv)
as written and allow a deduction for “all priority claims” “as of the effective date of the plan”
regardless of the omission on Form 122C-2.

While the Court is hesitant to find that the form is simply wrong, it is not the first court to
do so. See In re Williams, 394 B.R. at 563-64 (finding that § 707(b)(2)(A)(iv) allows for deduction
of attorney’s fees even though the form omits such a deduction); In re Hemker, 2015 Bankr. LEXIS
3122 at *7 (characterizing the lack of deduction for attorney’s fees of a chapter 13 debtor on the
official form as an “unfortunate omission”). Other Courts have found that Official Form 122C-1,
which calculates a debtor’s current monthly income, does not comply with the Code. See, e.g., In
re Gonzalez, 597 B.R. 133, 141 (Bankr. D. Colo. 2018) (“Courts and commentators alike have
called for revisions to the Official Form so that it better aligns with the Code, but no change has
occurred, even though the Judicial Conference revised this form in 2015” and citing cases
concluding the form is wrong). Bankruptcy Rule 9009 requires that “the forms shall be construed
to be consistent with these rules and the Code.” The Court will not bend its construction of the
Code to match the form. “When an Official Bankruptcy Form conflicts with the Code, the Code
always wins.” In re Gonzalez, 597 B.R. 133, 141 (Bankr. D. Colo. 2018) (citing Drummond v.

Wiegand (In re Wiegand), 386 B.R. 238, 242 (9th Cir. B.A.P. 2008)). Here, the Code wins. The
Court finds that the absence of a deduction for allowed attorney’s fees on Form 122C-2 does not
preclude Debtor from deducting his Attorney’s Fees to calculate PDI.
D. Pot Deduction Not Foreclosed Except for Double Counting
Because the Court finds that the Attorney’s Fees may be included in the deduction for
“priority claims” pursuant to § 707(b)(2)(A)(iv), it need not determine whether, as an alternative,
Debtor may use the pot deduction. While, as discussed above, the Court recognizes some
difficulties in the pot deduction, it is not ruling one way or another on whether it is available to
any debtor,24 with one important caveat: the pot deduction may not be used to double count
attorney’s fees or any other claim deducted in the PDI calculation. Priority claims, including
attorney’s fees, may be deducted “once, no more, no less.” In re Williams, 394 B.R. at 564

(quoting In re Echemann, 378 B.R. at 182 n.7). Debtor seeks no such double counting.
E. Policy Arguments
Trustee offers several policy arguments in favor of her position, most of which, in the
Court’s view, compel a different result. Trustee argues that allowing above-median debtors to take

24 While the Court declines to reach any conclusion on the issue, commentators have suggested below-median debtors
should be able to deduct attorney’s fees and other priority claims as reasonably necessary expenses, see Drake,
Bonapfel, Goodman, supra at § 8:3, which also mitigates the need to interpret “unsecured creditors” in a way that both
includes and excludes priority claims. Such an interpretation does not solve all issues, however, such as the
deductibility of unknown or anticipated but not allowed administrative expenses at confirmation. The flexible PDI
Test adopted in Hamilton v. Lanning, 560 U.S. 505 (2010) might capture some of these expenses if “known or virtually
certain at the time of confirmation,” but Hamilton is not a panacea as it is intended to apply only to “unusual cases.”
Id. at 519. The Court agrees with Trustee that there is nothing unusual about attorney’s fees.
a deduction for attorney’s fees leads to inequitable treatment between above-median debtors and
below-median debtors. The basis of her argument is that some cases, such as Hemker, justify a
deduction of attorney’s fees for above-median debtors, at least in part, on the notion that the means
test is designed to calculate all a debtor can afford to pay. If attorney’s fees are not deducted in

that calculation, then the debtor must not have any means to pay the attorney’s fees, which creates
feasibility issues. Trustee argues that this reasoning means that below-median debtors and above-
median debtors with negative disposable income will not be able to confirm feasible plans if they
hire attorneys. The Court disagrees that above-median debtors are getting an unfair benefit.
First, allowing above-median debtors to deduct attorney’s fees pursuant to §
707(b)(2)(A)(iv) does not preclude below-median debtors from deducting their attorney’s fees
when calculating PDI, they just do not have the ability to do so under § 707(b)(2)(A)(iv) because
that section does not apply to them. Indeed, the only decisions the Court has found on the issue
allow below-median debtors to deduct their attorney’s fees in the PDI Test, albeit some allow it
under the pot deduction. See, In re Williams, 394 B.R. at 564; In re Puetz, 370 B.R. at 391-92; In

re Echemann, 378 B.R. at 182; and In re Hemker at *8. Not allowing above-median debtors to
take a similar deduction leads to inequitable treatment, not the other way around.
Second, above-median debtors with negative PDI do get to deduct their attorney’s fees
under the Court’s ruling, even though they may not need the benefit of the deduction because they
have no PDI that must be paid to unsecured creditors.
Third, the Court does not base its ruling on the premise that the means test is coextensive
with feasibility. Its ruling is based on the language of the Code and the pervasive Code policy of
giving priority to attorney’s fees and other administrative expenses. While the means test may
have been designed to ensure above-median debtors pay unsecured creditors “the maximum they
can afford,” it often does a poor job, which “is the inevitable result of a standardized formula like
the means test.” Ransom, 562 U.S. at 78. Deficiencies notwithstanding, if the purpose of the
means test is “best achieved by interpreting [it] . . . to reflect a debtor's ability to afford repayment,”
then allowing deductions for actual priority claims such as attorney’s fees best achieves that goal.

Trustee also argues that allowing a deduction for attorney’s fees will allow manipulation
when negotiating attorney’s fees for above-median cases. The Court appreciates Trustee’s point:
if a deduction is allowed, then above-median debtors will have no incentive to negotiate lower
counsel fees so long as the fee is less than the resulting unsecured claim pool in the absence of the
deduction. It’s a wash from an above-median debtor’s perspective because the funds will be paid
either to counsel or to unsecured credits. The Court, however, does not share Trustee’s concern.
First, the Court does not believe that most debtors when negotiating fees with counsel appreciate
the intricacies of the PDI Test and how it affects payments in a chapter 13 case. The Court has
trouble believing that chapter 13 attorneys will be able to convince many debtors to pay
significantly higher fees than they otherwise would be willing to pay. But even if they could, this

type of manipulation is exactly what § 330 is designed to prevent. If Trustee sees an increase in
counsel fees in the wake of this decision, this Court stands ready to address any suspected
manipulation.
The Court is more concerned with the potential message sent to above-median debtors by
Trustee’s position: don’t hire an attorney. Chapter 13 (indeed every chapter of the Code) works
better for all parties, trustees and creditors included, when debtors are represented by competent
counsel. The Code’s priority scheme recognizes this fact by placing administrative expenses,
including attorney’s fees, at or near the top of the priority list in every chapter. See, e.g., §§ 507,
726, and 1129(a)(9)(A). Chapter 13 is no different. Attorney’s fees (to the extent allowed) must
be paid under a chapter 13 plan and before nearly all other claims. See §§ 1322(a)(2) and
1326(b)(1). Trustee’s position is contrary to this pervasive Code policy and singles out attorney’s
fees as the only common priority claim in chapter 13 essentially placed on equal footing with
general unsecured creditors. It is illogical to require above-median debtors to honor the priority

of attorney’s fees through actual payment while simultaneously ignoring that priority when
calculating the minimum payment to nonpriority unsecured creditors. Nothing in the plain
language of BAPCPA or its legislative history suggests a goal of making it harder for above-
median debtors to hire counsel. The Court will not extrapolate such a goal through the oblique
devices of expressio unius and artificial limitations on commonly understood terms.
The ultimate policy question boils down to this: who should foot the bill for above-median
debtors’ attorney’s fees—debtors or unsecured creditors? Trustee’s position collects from the
debtors. Debtor’s position sends the bill to unsecured creditors. If the primary goal of the means
test is to ensure that debtors are channeled into chapter 13 cases instead of chapter 7 for the benefit
of unsecured creditors, then it makes sense for unsecured creditors to pay the extra freight that

comes with a chapter 13 case meant to serve them. The better policy is the one that eliminates
barriers to hiring counsel, not raises them. Trustee’s position erects such a barrier.
V. CONCLUSION
For the foregoing reasons, Trustee’s objection to confirmation is overruled and a separate
order confirming Debtor’s Plan will enter once Debtor amends his Form 122C-2 and the Plan to
account for the correct amount of priority claims as indicated in footnote 6 of this opinion.
END OF DOCUMENT

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10456788. Public record. Not legal advice.