IN RE OKAZAKI

EDWARD D. JELLEN, Judge.

Martha G. Bronitsky, chapter 13 trustee (the "Trustee"), has moved for a modification of the debtor's chapter 13 plan pursuant to Bankruptcy Code § 1329(a)(1) Bankruptcy Code § 1329(a)(1) provides:

At any time after confirmation of the plan but before the completion of payments under such plan, the plan may be modified, upon request of the debtor, the trustee, or the holder of an allowed unsecured claim, to —

(1) increase or reduce the amount of payments on claims of a particular class provided for by the plan. . . .

All further section references herein are to the United States Bankruptcy Code, 11 U.S.C. § 101 et seq.

The court will grant the motion.

The debtor's chapter 13 plan, as filed and confirmed, requires the debtor to make monthly payments to the Trustee of $430 over a period of 36 months, and to pay unsecured claimants 25 cents on the dollar. The Trustee's motion alleges that the debtor scheduled unsecured claims totaling $26,918, and that the unsecured claims filed total only $9,288. The motion requests that the plan be amended to require the debtor to continue her monthly payments of $430 for the original plan period of 36 months. If so amended, the unsecured claimants who filed claims could receive a dividend of 70 cents on the dollar. Absent the amendment, the debtor would be able to benefit from the creditors' failure to file claims by obtaining a discharge after only approximately 20 months in chapter 13.

Three clear principles emerge from the case law. First, the amendment requested by the Trustee is not legally mandated. As the court explained in In re Than, 215 B.R. 430, 437-38 (9th Cir. BAP 1997), the obligation of a chapter 13 debtor to commit his or her disposable income to a chapter 13 plan for a period of 36 months comes into play only at the time of plan confirmation, and only if a creditor objects to confirmation. Section 1325(b)(1)(B) Section 1325(b)(1) provides:

(b)(1) If the trustee or the holder of an allowed unsecured claim objects to the confirmation of the plan, then the court may not approve the plan unless, as of the effective date of the plan —

(A) the value of the property to be distributed under the plan on account of such claim is not less than the amount of such claim; or

(B) the plan provides that all of the debtor's projected disposable income to be received in the three-year period beginning on the date that the first payment is due under the plan will be applied to make payments under the plan.

The requirement is not applicable when a party, such as the Trustee in the present case, seeks to modify a confirmed plan pursuant to § 1329(a). Than, 215 B.R. at 437-38.

Second, to prevail, the Trustee is not required to demonstrate changed circumstances. In re Powers, 202 B.R. 618, 622 (9th Cir. BAP 1996); see also In re Witkowski, 16 F.3d 739 (7th Cir. 1994). In Powers, the court observed that § 1329 does not mention "changed circumstances" as a condition to a plan modification, and declined to engraft any such requirement into the statute. Powers, 202 B.R. at 622. (Moreover, even if § 1329(a)(1) were construed to include a "changed circumstances" requirement, the BAP has stated that an unanticipated failure of creditors to file claims would meet the requirement. Than, 215 B.R. at 436.)

Third, grant or denial of a motion to modify a chapter 13 plan is a matter of court discretion, so long as the plan, as modified, meets the applicable confirmation requirements of chapter 13. Powers, 202 B.R. at 622-23. In exercising its discretion, the court may, of course, take into account any changed circumstances. Id.

Here, the court believes that the applicable factors weigh in favor of granting the Trustee's motion. The failure of some of the debtor's creditors to file claims is a changed circumstance that will enable the creditors who did file claims to receive a higher dividend, without additional cost to the debtor relative to the terms of the plan she proposed and which the court confirmed. The debtor proposed the plan in the expectation of paying her disposable income to creditors over a period of 36 months, and the proposed amendment does nothing other than preserve this feature of the confirmed plan. The debtor has not suggested that any countervailing considerations are present.

For the foregoing reasons, the court will grant the Trustee's motion. The court requests the Trustee to submit a proposed order within 10 days.