## Facts

- Stephanie Kay Lanning filed for Chapter 13 bankruptcy with approximately $36,793.36 in unsecured debt.
- In the six months before filing, she received a one-time employer buyout that significantly increased income in April and May 2006.
- The statutory “current monthly income” calculation on Form 22C averaged the prior six months and produced $5,343.70, above the state median for a one-person household.
- Using statutory expense deductions, Form 22C showed disposable income of $1,114.98 per month.
- At confirmation, Lanning’s actual income at a new job was $1,922 per month (Schedule I) and her actual expenses were $1,772.97 (Schedule J), leaving about $149.03 per month.
- She proposed a plan payment of $144 per month.
- The Chapter 13 trustee objected, arguing that “projected disposable income” required a mechanical approach that would compel payments based on the Form 22C figure, even though the parties agreed she could not afford that amount from current income.

## Issues

1. Whether “projected disposable income” under 11 U.S.C. § 1325(b)(1)(B) must be calculated mechanically by multiplying Form 22C “disposable income” by the number of plan months.
2. Whether a bankruptcy court may consider known or virtually certain changes in the debtor’s income or expenses at confirmation when determining “projected disposable income.”

## Decision

- The Supreme Court affirmed the judgment below.
- A bankruptcy court may start with the Form 22C disposable-income figure as a presumptive baseline.
- The court may adjust that figure to account for changes in income or expenses that are known or virtually certain at the time of confirmation.
- The Court rejected a rule requiring confirmation decisions to follow an unadjusted, backward-looking average when it would produce payments the debtor cannot make due to a nonrecurring income spike.

## Legal Principles

- “Projected disposable income” in § 1325(b)(1)(B) is not limited to a simple multiplication of historical “disposable income” defined in § 1325(b)(2).
- Form 22C (based on § 101(10A)’s six-month income average and the statutory expense framework for above-median debtors) supplies an ordinary starting point and presumptive figure.
- The presumption may be rebutted by evidence showing significant changes to income or expenses that are known or virtually certain at confirmation.
- The “known or virtually certain” standard limits adjustments to non-speculative circumstances while permitting courts to avoid confirmation outcomes disconnected from the debtor’s actual ability to fund a plan.

## Conclusion

The Court held that Chapter 13 “projected disposable income” is generally based on the Form 22C calculation but may be adjusted at confirmation to reflect income or expense changes that are known or virtually certain, allowing confirmation decisions to align plan payments with realistic future finances rather than a rigid historical average.


Hamilton v. Lanning, 560 U.S. 505 (2010)