Opinion
Case No. 22-cv-06223-BLF
2023-05-15
IN RE: Jorden Marie SALDANA, Appellant.
Michael John Primus, Law Offices of Michael J. Primus, Hercules, CA, for Appellant. Sarah Rae Velasco, Martha G. Bronitsky, Chapter 13 Trustee, Hayward, CA, for Appellee.
Michael John Primus, Law Offices of Michael J. Primus, Hercules, CA, for Appellant. Sarah Rae Velasco, Martha G. Bronitsky, Chapter 13 Trustee, Hayward, CA, for Appellee.
ORDER AFFIRMING THE BANKRUPTCY COURT ORDER ON APPEAL
BETH LABSON FREEMAN, United States District Judge
This matter is before this Court on appeal, pursuant to 28 U.S.C. § 158(a), from the United States Bankruptcy Court for the Northern District of California (the "Bankruptcy Court"). Appellant Jorden Marie Saldana ("Debtor" or "Appellant") appeals from two Bankruptcy Court Orders. Opening Br., ECF No. 9; see Order Sustaining Objection To Confirmation, EOR at 174; Confirmation Order, EOR at 241. On January 5, 2023, Appellee Martha G. Bronitsky, the Chapter 13 Trustee of the bankruptcy estate ("Trustee"), filed a Response Brief. Trustee Br., ECF No. 10. On January 18, 2023, Saldana filed a Reply Brief. Reply Br., ECF No. 11. The Court finds the matter to be appropriate for disposition without oral argument. See Civ. L.R. 7-l(b). For the reasons discussed below, the Court AFFIRMS the Bankruptcy Court Order.
I. BACKGROUND
This case was filed as a voluntary Chapter 13 bankruptcy on April 13, 2022. See EOR at 1-52. Debtor is single, has no dependents, and is employed as a surgical technician with a gross monthly income of $8,081. EOR at 28, 30. Her budget includes an ongoing voluntary retirement contribution of $484 as a payroll deduction in Schedule I and repayment of two retirement loans as an expense on Schedule J. EOR at 28-31. Saldana filed a Chapter 13 Plan that required monthly payments of $300 for 60 months with a corresponding divided of 0% to general unsecured creditors. EOR at 53-59. She also filed Official Forms 122C-1 and 122C-2 ("Means Test"). EOR at 61-73. The initial Means Test included a deduction of $601 at Line 41 representing the monthly payments for two retirement loans, and it arrived at a Disposable Monthly Income ("DMI") of $115.90. EOR at 71. Saldana filed a declaration in support of her Chapter 13 Plan in which she stated: "I have reduced my voluntary retirement shown as TSA Fidelity EE on my paychecks to 6% which equates to $484 per months [sic] in order to make ends meet and perform my plan obligations." EOR at 127-28. This indicated she was making a regular voluntary contribution to her retirement plan but reduced it for her Chapter 13 budget. Id.
"EOR" refers to the Excerpt of Record submitted by Appellant. See ECF Nos. 5-6.
On April 22, 2022, Trustee filed an Objection to Confirmation of Chapter 13 Plan. EOR at 108-13. On April 25, 2022, the Debtor filed amendments to her Form 107, which was included as part of her initial bankruptcy petition. EOR at 117-26. On May 23, 2022, Trustee filed an Amended Objection to Confirmation of a Chapter 13 Plan, which, among other things, changed the Means Test objection to seek a reduction in the amount listed on Line 41 to reflect amortization of the retirement loans over the term of the plan. EOR at 130-34. On June 29, 2022, the Debtor filed an Amended Means Test that increased the monthly deduction on Line 41 from $601 to $747, which reflected amortization of the retirement loans over the term of the plan and the addition of $484 as a go-forward retirement contribution. EOR at 149-62. On July 1, 2022, the Trustee filed another Amended Objection, which raised that Debtor was not entitled to deduct her voluntary retirement contributions from disposable income in the Means Test. EOR at 163-68.
The Joint Prehearing Statement identified as a remaining issue whether the retirement deduction was an allowable deduction on the Means Test. EOR at 169-70. On July 28, 2022, the Bankruptcy Court conducted a confirmation hearing and sustained the Trustee's Objection to Confirmation. EOR at 288-91. The Bankruptcy Court then issued a written Order sustaining the Trustee's Objection to Confirmation. EOR at 174.
Debtor filed amended plans on August 15, 2022 and August 16, 2022, which eliminated the ongoing retirement deductions as a deduction from the means test. EOR at 179-93. On August 23, 2022, Debtor filed an amended means test. EOR at 201-13. It removed the deduction on Line 41 for ongoing retirement contributions and left only the amortized payment for retirement loans in the amount of $281, but it calculated the Trustee's fee incorrectly. EOR at 211. Two days later, the Debtor filed another amended means test to correct the error, which resulted in a DMI of $409.77. EOR at 214-26. On September 19, 2022, Debtor filed the Third Amended Plan, which provided for monthly payments of $300 until August 2023 and monthly payments of $728 for the remainder of the 60-month term. EOR at 228-34. The Bankruptcy Court confirmed the Third Amended Plan on September 26, 2022. EOR at 241.
Debtor appealed. ECF No. 1.
II. ISSUES PRESENTED
Saldana identifies two (related) issues for the instant appeal:
(1) Did the Bankruptcy Court err in sustaining the Trustee's objection to voluntary retirement contributions as a means test deduction? Opening Br. at 2.
(2) Did the Bankruptcy Court err in confirming a plan predicated on an erroneous interpretation of the statutes? Opening Br. at 2.
III. JURISDICTION
28 U.S.C. § 158(a)(1) confers jurisdiction on this Court to adjudicate this bankruptcy appeal. The Bankruptcy Court's Confirmation Order, which resulted in the termination of the adversary proceeding, is a final and appealable order. See Bullard v. Blue Hills Bank, 575 U.S. 496, 502-03, 135 S.Ct. 1686, 191 L.Ed.2d 621 (2015). The Bankruptcy Court's Order Sustaining Objection to Confirmation was interlocutory, but it became appealable upon entry of the final Confirmation Order. Cf. Cato v. Fresno City, 220 F.3d 1073, 1074-75 (9th Cir. 2000).
IV. STANDARD OF REVIEW
The issue before the Court, whether a voluntary contribution to a retirement plan is excepted from disposable income, is a purely legal issue of statutory interpretation, which is reviewed de novo. In re JTS Corp., 617 F.3d 1102, 1109, (9th Cir. 2010); In re Simpson, 557 F.3d 1010, 1014 (9th Cir. 2009).
V. DISCUSSION
The central issue presented in this appeal is whether voluntary contributions to a retirement account constitute disposable income. The Bankruptcy Court answered that question in the affirmative. As the parties recognize, courts in this country have taken varied approaches to this question, with some holding that voluntary contributions to a retirement account are always disposable income; others holding that voluntary contributions to a retirement account are never disposable income; and still others holding that voluntary contributions to a retirement account are not disposable income if made prior to the bankruptcy filing. The Court will identify the relevant statutory provisions and then summarize these approaches.
A. Statutory Framework
Section 1325 of the Bankruptcy Code governs confirmation of Chapter 13 payment plans. See 11 U.S.C. § 1325. Section 1325(b) provides that, after an objection from the Chapter 13 trustee, a Chapter 13 plan cannot be approved "unless . . . [it] 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." 11 U.S.C. § 1325(b)(1)(B). It defines "disposable income" as the debtor's "current monthly income . . . less amounts reasonably necessary to be expended . . . for the maintenance or support of the debtor." 11 U.S.C. § 1325(b)(2)(A)(i). Current monthly income is the average monthly income in the six-month period before the bankruptcy is filed. 11 U.S.C. § 101(10A). For debtors with above the applicable state median income, the "amounts reasonably necessary to be expended" are determined by reference to Section 707(b). 11 U.S.C. § 1325(b)(3). The phrase "projected disposable income" is not defined in the Bankruptcy Code. The Supreme Court has stated that "projected disposable income" is the debtor's disposable income under Section 1325(b)(2) adjusted for any "changes in the debtor's income or expenses that are known or virtually certain at the time of confirmation." Hamilton v. Lanning, 560 U.S. 505, 524, 130 S.Ct. 2464, 177 L.Ed.2d 23 (2010).
In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, which added Section 541(b)(7) to the Bankruptcy Code. Section 541(b)(7) provides:
(b) Property of the estate does not include -
. . . .
(7) any amount -
(A) withheld by an employer from the wages of employees for payments as contributions -
(i) to -
(I) an employee benefit plan that is subject to title I of the Employee Retirement Income Security Act of 1974 [commonly known as a 401(k) retirement plan] or under an employee benefit plan which is a government plan under section 414(d) of the Internal Revenue Code of 1986;
11 U.S.C. § 541(b)(7).. . . .
except that such amount under this subparagraph shall not constitute disposable income as defined in section 1325(b)(2).
Before BAPCPA was passed in 2005, "the 'overwhelming consensus' among bankruptcy courts was that wages voluntarily withheld as 401(k) contributions formed part of a debtor's disposable income." Davis v. Helbling (In re Davis), 960 F.3d 346, 350 (6th Cir. 2020) (collecting cases). But the passage of BAPCPA changed that. The emphasized portion above, known as the "hanging paragraph," has "led to considerable disagreement among courts and litigants nationwide." Id. at 351. "Since [the passage of BAPCPA], courts faced with the question of whether voluntary 401(k) contributions constitute disposable income under Section 1325(b) have reached no less than four different conclusions." In re Aquino, 630 B.R. 499, 548 (Bankr. D. Nev. 2021). "BAPCPA's insertion of the hanging paragraph into § 541(b)(7) has taken us from an 'overwhelming consensus' among bankruptcy courts to four competing views of whether voluntary retirement contributions constitute disposable income in a Chapter 13 bankruptcy." In re Davis, 960 F.3d at 352-53 (internal citation omitted).
B. Approaches Taken by Other Courts
The Court will next summarize how other courts have addressed this question. See generally In re Aquino, 630 B.R. at 548-94 (providing comprehensive summary of case law).
i. Voluntary 401(k) Contributions are Always Disposable Income
Several courts have held that voluntary contributions to a 401(k) are always disposable income. This approach is often traced to In re Prigge, 441 B.R. 667 (Bankr. D. Mont. 2010). Several of the cases adopting this approach—"that voluntary 401(k) contributions are always disposable income under Section 1325(b) in chapter 13 cases filed by above-median income debtors"—come from courts within the Ninth Circuit. In re Aquino, 630 B.R. at 548; see In re McCullers, 451 B.R. 498 (Bankr. N.D. Cal. 2011); Parks v. Drummond (In re Parks), 475 B.R. 703 (B.A.P. 9th Cir. 2012). And it is the approach adopted by the Ninth Circuit Bankruptcy Appellate Panel in Parks, which the Bankruptcy Court in this case followed.
This approach "focuses on the hanging paragraph's location within § 541." In re Davis, 960 F.3d at 351 (citing In re Parks, 475 B.R. at 708). Section 541 defines the property of the estate at the filing of the petition. 11 U.S.C. § 541. This line of cases concludes that the hanging paragraph excludes from property of the estate only 401(k) contributions that were made prior to the filing of the bankruptcy petition. See, e.g., In re Parks, 475 B.R. at 708. These cases conclude that any voluntary retirement contributions made after the filing of the bankruptcy petition thus constitute disposable income. See, e.g., id. at 708-09.
ii. No Voluntary 401(k) Contributions are Disposable Income
Another approach that courts have taken is to hold that voluntary 401(k) contributions are never disposable income. The leading decision for this approach is Baxter v. Johnson (In re Johnson), 346 B.R. 256 (Bankr. S.D. Ga. 2006). The Johnson court stated that Section 541(b)(7) "plainly state[s] that [401(k)] contributions 'shall not constitute disposable income.' " Id. at 263 (quoting 11 U.S.C. § 541(b)(7)). It stated that Congress had "placed retirement contributions outside the purview of a Chapter 13 plan." Id. The court decided that voluntary contributions to a 401(k) plan therefore do not constitute disposable income, regardless of whether they began prior to bankruptcy, as long as they are made in good faith. Id.
iii. Voluntary 401(k) Contributions in Pre-Petition Amounts are Not Disposable Income
Other lines of cases have held that voluntary retirement contributions are not disposable income if they were made regularly prior to the filing of the bankruptcy petition. See In re Davis, 960 F.3d at 352. Courts have followed two different lines of reasoning in reaching this outcome, and the Court will describe each in turn. In 2020, the Sixth Circuit adopted this approach, making clear it did not choose between the lines of reasoning (Seafort-BAP and CMI), as either would produce the same result. Id. at 357.
a. Seafort-BAP Interpretation
The first interpretation is referred to as the Seafort-BAP approach because it comes from the decision of the Sixth Circuit Bankruptcy Appellate Panel in Seafort v. Burden (In re Seafort), 437 B.R. 204 (B.A.P. 6th Cir. 2010). This approach also focuses on the hanging paragraph's placement in § 541 but "construes the hanging paragraph to exclude the debtor's pre-petition contribution amount—rather than merely her accumulated savings—from her disposable income under § 1325(b)(2)." In re Davis, 960 F.3d at 352 (emphasis in original) (citing In re Seafort, 437 B.R. at 210). Under this approach, a debtor could exclude voluntary 401(k) contributions from disposable income if the debtor made an equal or greater monthly voluntary 401(k) contribution prior to filing for bankruptcy. In re Seafort, 437 B.R. at 210.
b. CMI Interpretation
The second interpretation, referred to as the "CMI Interpretation," comes from the Bankruptcy Court of the Western District of Washington. See In re Anh-Thu Thi Vu, No. 15-41405-BDL, 2015 WL 6684227 (Bankr. W.D. Wash. June 16, 2015). This approach "construes the hanging paragraph as excluding the debtor's pre-petition contributions from the calculation of her 'current monthly income'—a subcomponent of § 1325(b)(2)'s disposable-income calculation." In re Davis, 960 F.3d at 352 (citing In re Anh-Thu Thi Vu, 2015 WL 6684227, at *4). As stated above, current monthly income is defined as average income in the six months preceding bankruptcy. 11 U.S.C. § 101(10A). This interpretation would often lead to the same result as the Seafort-BAP approach. But under certain circumstances, such as a debtor who began making contributions less than six months before filing the petition, the outcome would be different than that under Seafort-BAP.
C. This Appeal
At issue is whether Saldana's voluntary retirement contributions, in an amount she made pre-petition, were properly included as disposable income. Saldana encourages the Court to hold that voluntary retirement contributions in an amount made prior to filing for bankruptcy do not constitute disposable income, adopting either the CMI interpretation or the statutory interpretation approach of the Sixth Circuit in In re Davis. Opening Br. at 12-16. Appellee asks the Court to uphold the Bankruptcy Court's decision and follow the Ninth Circuit Bankruptcy Appellate Panel's decision in In re Parks. Trustee Br. at 6-15. The Court recognizes that the decision of the Ninth Circuit Bankruptcy Appellate Panel is not binding, but merely persuasive. See Silverman v. Zamora (In re Silverman), 616 F.3d 1001, 1005 & n.1 (9th Cir. 2010). The Court determines that the interpretation of the statutes determining that voluntary retirement contributions are always disposable income is most persuasive. This approach has been followed by several courts within the Ninth Circuit, including the Bankruptcy Court of the District of Nevada in a recent 2021 decision. See In re Aquino, 630 B.R. 499.
The structure of the Bankruptcy Code is instructive. Section 1306 of the Bankruptcy Code defines property for Chapter 13 bankruptcy filings. 11 U.S.C. § 1306. It defines the property of the estate to include "the property specified in section 541" of the Bankruptcy Code, as well as certain property acquired and earnings from services performed after the commencement of a bankruptcy case but before its closing. Id. In turn, Section 541, which includes the hanging paragraph, defines property of the estate at the time of filing. 11 U.S.C. § 541. "Section 541(a)(1) defines property of the estate as including 'all legal or equitable interest of the debtor in property as of the commencement of the case' and § 541(a)(6) states that 'earnings from services performed by an individual debtor after the commencement of the case' are not brought into the estate." In re Parks, 475 B.R. at 707 (quoting 11 U.S.C. § 541). As summarized by the Sixth Circuit, "Section 1306(a) expressly incorporates § 541. Read together, § 541 fixes property of the estate as of the date of filing, while § 1306 adds to the 'property of the estate' property interests which arise post-petition." Seafort v. Burden (In re Seafort), 669 F.3d 662, 667 (6th Cir. 2012).
Section 1325 of the Bankruptcy Code then governs confirmation of Chapter 13 payment plans. 11 U.S.C. § 1325. It defines "disposable income" as the debtor's "current monthly income . . . less amounts reasonably necessary to be expended . . . for the maintenance or support of the debtor." 11 U.S.C. § 1325(b)(2)(A)(i). For debtors with above the applicable state median income, the "amounts reasonably necessary to be expended" are determined by reference to Section 707(b)(2)(A)-(B), referred to as the "means test." 11 U.S.C. § 1325(b)(3). Section 707(b) provides that "[t]he debtor's monthly expenses shall be the debtor's applicable monthly expense amounts specified under the National Standards and Local Standards, and the debtor's actual monthly expenses for the categories specified as Other Necessary Expenses issued by the Internal Revenue Service." 11 U.S.C. § 707(b)(2)(A)(ii)(I). "[T]he Internal Revenue Manual ("IRM") lists fifteen categories of expenses which may be considered necessary under certain circumstances, such as child care, education and court-ordered payments such as alimony and child support." Egebjerg v. Anderson (In re Egebjerg), 574 F.3d 1045, 1051 (9th Cir. 2009) (citing IRM § 5.15.1.10). As the Ninth Circuit has noted, "the IRS guidelines themselves provide that '[c]ontributions to voluntary retirement plans are not a necessary expense.' " Id. at 1052 (alteration in original) (quoting IRM § 5.15.1.23). With this framework in mind, "the question presented is whether the very specific provisions of subsection 541(b)(7) . . . override the more general provisions of subsections 707(b)(2) and 132[5](b)." In re McCullers, 451 B.R. at 501.
Again, Section 541 states that "[p]roperty of the estate does not include . . . any amount . . . withheld by an employer from the wages of employees for payments as contributions . . . to . . . [a 401(k)] . . . except that such amount under this subparagraph shall not constitute disposable income as defined in section 1325(b)(2)." 11 U.S.C. § 541(b)(7)(A). The Court agrees with the several other courts that have determined that the most reasonable interpretation of section 541(b)(7)(A) is to exclude voluntary 401(k) contributions made before the petition date from the property of the estate. See In re Parks, 475 B.R. at 708 ("[B]y reading § 541(a)(1) and § 541(b)(7)(A) together, the most reasonable interpretation of § 541(b)(7)(A) is that is excludes from property of the estate only those 401(k) contributions made before the petition date."); In re McCullers, 451 B.R. at 503 ("[T]he most natural reading of section 541(b)(7) is that it excludes from property of the estate only those contributions made before the petition date."); In re Prigge, 441 B.R. at 677 n.5 ("[Section 541(b)(7)] seems intended to protect amounts withheld by employers from employees that are in the employer's hands at the time of filing bankruptcy, prior to remission of the funds to the plan"). The "such amount" language in the hanging paragraph means that pre-petition retirement contributions are not disposable income. In re Parks, 475 B.R. at 708; see also In re McCullers, 451 B.R. at 503-04 ("That Congress intended to exclude from disposable income only the same pre-petition contributions excluded from property of the estate is indicated by its specifying the contributions excluded from property of the estate and then stating that "such amount" shall not constitute disposable income.").
And the Court agrees with the meaning of the "except that" language explained by the courts in McCullers and Parks. Prigge held that the "except that" language was limited to excluding from disposable income any amount that had been withheld by the employer but not yet remitted to the retirement plan itself. In re Prigge, 441 B.R. at 677 n.5. The court in McCullers stated that the "except that" language serves "merely to counteract any suggestion that the exclusion of such contributions from property of the estate constitutes postpetition income to the debtor." In re McCullers, 451 B.R. at 504. It went on to state that "Congress's use of the words 'except that' is entirely consistent with the Prigge decision, which held that the purpose of the statute was merely to clarify that the exclusion of certain prepetition contributions from property of the estate did not give rise to disposable income to the debtor." Id. (citing Prigge, 441 B.R. at 677 n.5). The Court recognizes that it has an obligation to give some effect to the statutory language, and it agrees with the McCullers court that this interpretation does just that, noting that the "limited reading is entirely appropriate . . . because the statutory language itself discloses very modest aims." Id. at 505. "In using the words 'except that,' Congress suggests that its only purpose was to negate any inference that the exclusion of such contributions from property of the estate gives rise to income to the debtor." Id.; see also In re Parks, 475 B.R. at 708 ("[W]e are persuaded that the term 'except that' in the hanging paragraph was designed simply to clarify that the voluntary retirement contributions excluded from property of the estate are not postpetition income to the debtor.").
The Court also notes that its position is supported by other sections of the Code. The Court finds instructive the fact that Section 1306 makes post-petition earnings part of the estate, but voluntary retirement contributions are not excluded from disposable income anywhere in Chapter 13. See 11 U.S.C. § 1306(a)(2). Further, the Court notes that in amending BAPCPA, Congress explicitly excluded the repayment of 401(k) loans from disposable income in § 1322(f), but it did not do the same with post-petition voluntary 401(k) contributions. In re Parks, 475 B.R. at 708; see 11 U.S.C. § 1322(f). "[W]here Congress includes particular language in one section of a statute but omits it in another . . . , it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." Keene Corp. v. United States, 508 U.S. 200, 208, 113 S.Ct. 2035, 124 L.Ed.2d 118 (1993) (alterations in original) (quoting Russello v. United States, 464 U.S. 16, 23, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983)). The fact that Congress explicitly excluded repayment of 401(k) loans from disposable income in Section 1322, but did not do the same with voluntary 401(k) contributions, further supports the Court's conclusion that post-petition voluntary retirement contributions do constitute disposable income. See In re Parks, 475 B.R. at 709 ("Simply put, without a clearer direction comparable to the carve out from disposable income for the repayment of retirement loans in § 1322(f), it seems unlikely that Congress intended § 541(b)(7)(A) to bestow a benefit on above-median chapter 13 debtors while their creditors absorbed an even greater loss."); In re McCullers, 451 B.R. at 504 ("Prigge's more limited interpretation is reinforced by the fact that Congress used much more direct language in excluding retirement loan repayments from disposable income. Section 1322(f) was placed within the confines of chapter 13 itself, and states explicitly 'any amounts required to repay such loan shall not constitute disposable income under section 1325.' "); In re Prigge, 441 B.R. at 677 ("No provision similar to § 1322(f) (excluding repayment of 401(k) loans from disposable income) is cited by the Debtor as authority to exclude voluntary 401(k) contributions, and the Court is aware of none . . . . If Congress had intended to exclude voluntary 401(k) contributions from disposable income it could have drafted § 1322(f) to provide for such an exclusion, or provided one elsewhere.").
The Court also looks to Section 707(b) of the Bankruptcy Code. "Disposable income" is defined as the debtor's "current monthly income . . . less amounts reasonably necessary to be expended . . . for the maintenance or support of the debtor." 11 U.S.C. § 1325(b)(2)(A)(i). Where the debtor's monthly income exceeds the state median, as here, the "amounts reasonably necessary to be expended" are determined by the means test in Section 707(b)(2). 11 U.S.C. § 1325(b)(3). And "[v]oluntary contributions to 401(k) retirement plans are not mentioned as 'reasonable and necessary expenses' under the 'means test' set forth in § 707(b)(2)(A) & (B)." In re Parks, 475 B.R. at 709 (citing In re Seafort, 669 F.3d at 672; In re Prigge, 441 B.R. at 676; In re Egebjerg, 574 F.3d at 1052). This "suggests that Congress did not intend § 541(b)(7)(A) to exclude postpetition 401(k) contributions from disposable income." In re Parks, 475 B.R. at 709.
Finally, the Court also agrees that this interpretation is consistent with the Ninth Circuit's decision in In re Egebjerg, 574 F.3d 1045. That case dealt with a different issue—whether the debtor's 401(k) loan repayments qualified as a necessary expense for purposes of the means test in a Chapter 7 bankruptcy proceeding. The Ninth Circuit noted that "[w]hen it introduced the means test, Congress provided, by reference to the IRS guidelines, specific guidance as to what qualifies as a necessary expense for the purposes of applying that test." Id. at 1052. In its analysis, the Ninth Circuit recognized that "the IRS guidelines themselves provide that '[c]ontributions to voluntary retirement plans are not a necessary expense.' " Id. at 1052 (alteration in original) (quoting IRM § 5.15.1.23). The Ninth Circuit explicitly stated that it did "not hold that § 5.15.1.23 is controlling" and that it did not "mean to imply that the IRS standards have been incorporated wholesale into the Bankruptcy Code or that they control outcomes on other issues." Id. at 1052 n.3. The Court also recognizes that the IRS guidelines in the IRM do not prevail over the statute, but merely notes that its reading of the statute is consistent with the Ninth Circuit's statement in Egebjerg. See In re Parks, 475 B.R. at 709.
The Court determines that under the Bankruptcy Code, voluntary contributions to a 401(k) made after filing a petition for Chapter 13 bankruptcy are disposable income. The Court therefore agrees with the Bankruptcy Court's decision, and it holds that Saldana's voluntary retirement contributions were properly included as disposable income.
VI. ORDER
For the foregoing reasons, the Court AFFIRMS the Bankruptcy Court's Order Sustaining Objection To Confirmation and its Confirmation Order.