Burden v. Seafort (In Re Seafort)

MARILYN SHEA-STONUM, Bankruptcy Judge,

dissenting.

This case is before the Panel on an appeal of the bankruptcy court’s confirmation of the Debtors’ chapter 13 plans. Confirmation of plans is governed by 11 *214U.S.C. § 1325. The Trustee has alleged that the Debtors’ plans do not comply with § 1325(b)(1)(B), the “best efforts” requirement, which provides:

(b)(1) If the trustee ... objects to the confirmation of the plan, then the court may not approve the plan unless, as of the effective date of the plan—
(B) the plan provides that all of the debtor’s projected disposable income to be received in the applicable commitment period beginning on the date that the first payment is due under the plan will be applied to make payments to unsecured creditors under the plan.

The basis of the Trustee’s objection is the assertion that the Debtors’ plans do not apply all of their projected disposable income to the payment of unsecured creditors. However, in framing this question, the Trustee masked her objection as something in addition to the best efforts analysis. Relying on a series of statutory provisions that are not relevant to the best efforts determination, the Trustee urged the Panel to adopt an irrebuttable presumption that chapter 13 debtors who increase or commence contributions to retirement savings plans described in 11 U.S.C. § 541(b)(7) (“Qualified Plans”) after their cases are filed are deemed not to be applying all projected disposable income to pay their unsecured creditors under their chapter 13 plans. For chapter 13 debtors who were not making contributions to Qualified Plans (“Qualified Contributions”) when they filed for bankruptcy, this would automatically foreclose any ability to make Qualified Contributions during the three to five year period that their chapter 13 cases will be pending. Even for debtors who had been making Qualified Contributions prior to filing, this would cap their Qualified Contributions at those pre-filing levels. In short, acceptance of the Trustee’s argument gives rise to an irrebuttable presumption that the level of chapter 13 debtors’ Qualified Contributions as of the filing of their cases is all that is necessary to the support of debtors and their dependents. There simply is no mention of any such cap or fixed limit on Qualified Contributions in the relevant Bankruptcy Code provisions.1 Because I am convinced that the Bankruptcy Code neither requires nor lends statutory support to the creation of such an irrebuttable presumption, I respectfully dissent.

The assertion in the majority opinion that their holding does not equate to the adoption of an irrebuttable presumption does not withstand examination. The question raised in these appeals, reduced to its most basic form, is whether the Debtors are devoting all of their projected disposable income to fund their chapter 13 plans. The bankruptcy court processed this factual inquiry, determined that the plans in both cases satisfied this statutory requirement, and, no other objections remaining outstanding, confirmed the plans. The majority does not find that the bankruptcy court’s factual determination was incorrect based upon the Debtors’ various individual circumstances. Rather, the majority processes this factual inquiry by substituting a legal conclusion, i.e., that their reading of the Bankruptcy Code prohibits per se chapter 13 debtors from increasing Qualified Contributions over the life of their plans.

Resolution of this appeal should turn on the interpretation of the phrase “projected disposable income,” which defines the “best efforts” test. The Trustee instead initially framed the issue in this case to be about property of the estate, arguing from *215a variety of Code sections, including 11 U.S.C. §§ 541(a), 1306, and 1322. These sections are not relevant to the issue now before the Panel because, although she does her best to obscure her statutory predicate, the Trustee’s objection is based on § 1325(b)(1)(B), which does not reference property of the estate or any of these Code sections.

Since the Panel heard argument in this case, the Supreme Court decided Hamilton v. Lanning (In re Lanning), — U.S. -, 130 S.Ct. 2464, 177 L.Ed.2d 23 (2010), in which it determined that courts are to take a “forward-looking approach,” rather than a mechanical approach, to the calculation of projected disposable income. Id. at 2475, and the Sixth Circuit decided the direct appeal in Darrohn v. Hildebrand (In re Darrohn), No. 09-5499, 615 F.3d 470 (6th Cir.2010), in which it applied Lanning to both the revenue and expense factors in the projected disposable income calculation. As addressed in Lanning and Darrohn, the starting point for analyzing what is projected disposable income in any chapter 13 case is identified in 11 U.S.C. § 1325(b)(2):

(2) For purposes of this subsection, the term ‘disposable income’ means current monthly income received by the debtor.... less amounts reasonably necessary to be expended—
(A)(i) for the maintenance or support of the debtor or a dependent of the debtor, or for a domestic support obligation, that first becomes payable after the date the petition is filed;

11 U.S.C. § 1325(b)(2). Because the Trustee did not raise the good faith of the Debtors in either case, see infra, her objection rests entirely on her assertion of an irrebuttable presumption. In its starkest terms, that presumption is that contributions to Qualified Plans are never reasonably necessary to the debtor’s maintenance or support, except to the extent that they are ongoing at the time of filing. However, the definition of “disposable income,” as augmented by § 541(b)(7), belies this assumption by explicitly providing:

(b) Property of the estate does not include—
(7) any amount—
(A) withheld by an employer from the wages of employees for payment as contributions — •
(i) to—
[three different forms of retirement savings plans that qualify for tax deferment under the Internal Revenue Code of 1986]
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) (emphasis added). Central to the resolution of this appeal is determining the meaning of the final phrase that begins with “except” and will be referred to as the “hanging phrase.” Section 541(b)(7) is one of a number of BAPCPA amendments addressing debtors’ Qualified Contributions and debtors’ participation in Qualified Plans. One thrust of these provisions was to legislatively overrule decisions that had construed the Bankruptcy Code as prohibiting both unaltered repayment of loans from debtors’ retirement plans and participation in such plans by debtors during the chapter 13 plan period. See, e.g., Behlke v. Eisen (In re Behlke), 358 F.3d 429 (6th Cir.2004); Anes v. Dehart (In re Anes), 195 F.3d 177 (3d Cir.1999); Harshbarger v. Pees (In re Harshbarger), 66 F.3d 775 (6th Cir.1995); In re Heffeman, 242 B.R. 812, 818 (Bankr.D.Conn.1999). By “expressly removing [401 (k) contributions] from the definition *216of disposable income under § 1325(b), ... Congress has implemented a policy of protecting and encouraging retirement savings.” In re Mati, 390 B.R. 11, 17 (Bankr.D.Mass.2008). As courts outside the Sixth Circuit repeatedly have observed,2 chapter 13 debtors may increase or begin Qualified Contributions during the course of their chapter 13 plans.

Indeed, from the time BAPCPA was enacted five years ago until the majority’s opinion in these two appeals, no court had adopted the interpretation advocated by the Trustee. The Trustee’s interpretation strays far from the applicable Code provisions and reaches a harsh and uneven result. Adoption of that interpretation by the majority ignores the proof that these amendments provide of Congress’ determination that retirement savings generally are reasonably necessary for consumer debtors.3 As discussed infra, the majority’s assertion that the Fifth and Eighth Circuits have interpreted § 1325(b)(1) to *217prohibit an upward change in Qualified Contributions from the filing date level is simply inaccurate.

The proper analysis of this issue is straightforward. Disposable income does not include any amount withheld as a Qualified Contribution. This exception from disposable income is found in the hanging phrase, which, by its reference to § 1325(b)(2), is necessarily forward-looking and makes no distinction between pre-fil-ing and post-filing Qualified Contributions. To make sense of the hanging phrase, it is important to keep in focus that the issue on appeal is satisfaction of the best efforts requirement. In contrast, the Trustee’s argument depends on property of the estate. In confirmation of chapter 13 plans, property of the estate is material to the best interests test, not the best efforts test; the Trustee did not argue in either case that the best interests requirement was not met, i.e., that the Debtors’ plans do not propose payments in an amount at least equal to the non-exempt property that would be available to satisfy claims were the case to proceed in chapter 7. The hanging phrase explicitly provides that the Debtors’ Qualified Contributions are not disposable income; its reference to § 1325(b)(2) is appropriately read as forward-looking. It contains no requirement that Qualified Contributions had to have been withheld before the case commenced and does not indicate that they are capped as of the date of filing. Because the Trustee failed to show that the plans do not provide that all of the Debtors’ projected disposable income will be paid into their plans, the bankruptcy court did not err when it confirmed the Debtors’ plans over the Trustee’s contention that the best efforts test had not been satisfied.

The majority begins its analysis with § 541(a) rather than § 1325(b), even though the Trustee’s objection is that the Debtors’ plans do not satisfy the best efforts requirement. The majority’s analysis first addresses the question of whether post-petition Qualified Contributions are property of the estate without explaining what relevance this question has to confirmation of a chapter 13 plan, stating “the bankruptcy court concluded that ... contributions which commence after the filing of the case must also be excluded from property of the estate.” However, this statement is in error; the bankruptcy court had no need to address or resolve the question of whether such contributions are property of the estate. Rather, the bankruptcy court addressed only how such Qualified Contributions should be treated in determining what is projected disposable income, which is the only question on appeal. Continuing with a discussion of property of the estate, the majority then considers § 1306, which defines property of the estate in a chapter 13 case. Noting the fact that Congress did not reference Qualified Contributions in § 1306, the majority concludes that Congress did not intend for Qualified Contributions “to be excluded from property of the estate or from projected disposable income.” The first prong of that statement is correct. The second prong assumes a conclusion that goes beyond the operation of § 1306. Section 1306 does not discuss, define, or address either projected disposable income or disposable income in any way. Relying on § 1306 as any indication of congressional intent on the question of disposable income is a non sequitur.4 Further, if *218Congress had intended to create the Trustee’s irrebuttable presumption, that presumption would logically have been included in § 1325(b) or, at a minimum, in § 541(b)(7).5 The majority also reasons that if Congress had intended to exclude Qualified Contributions from projected disposable income, it could have easily tacked the words “or projected disposable income under § 1325(b)(1)(B)” to the end of the hanging phrase in § 541(b)(7). This suggestion ignores the fact that projected disposable income is not defined in § 1325(b)(1). Rather, the term “disposable income” has been specified not to include Qualified Contributions and with regard to the statutory phrase, projected disposable income, the word “projected” is to be given its ordinary meaning. Lanning, 130 S.Ct. at 2471 (“When terms used in a statute are undefined, we give them their ordinary meaning.”). Indeed, the majority’s suggestion that Congress should have tacked their phrase onto § 541(b)(7) brings into clearer focus their erroneous assumption that “projected disposable income” has some meaning different than a projection of “disposable income” through application of § 1325(b). Application of § 1325(b) *219calls for a case-specific analysis of what is needed for the support of the debtor and the debtor’s dependents.

The majority then reaches the question of disposable income and cites two purportedly supporting eases. However, neither of these cases support the majority’s holding. Although many cases (see supra note 2) have similar facts to the cases in this appeal, there are no cases that have reached the conclusion that a debtor may make Qualified Contributions during the course of a chapter 13 bankruptcy only to the extent that such contributions were ongoing at the time the petition was filed.

In Nowlin v. Peake (In re Nowlin), the debtor was contributing to her 401 (k) plan and repaying a 401(k) loan at the time of filing. 576 F.3d 258 (5th Cir.2009) (cited in Lanning, 130 S.Ct. at 2474, 2475). However, the Fifth Circuit did not disturb the bankruptcy court’s holding that “after Nowlin had paid off her 401(k) loan, she could contribute an additional $187.49 to her 401(h) plan, which would bring her monthly 401(k) contributions to the maximum of $1,250.00 per month.” Nowlin, 576 F.3d at 261 (emphasis added). Rather, the Fifth Circuit agreed with the district and bankruptcy courts’ conclusion that the additional amounts that would be available to the debtor after repaying her 401(k) loan, beyond what was used to maximize her 401(k) contributions, should be included in projected disposable income that must be distributed to unsecured creditors. Noivlin is inconsistent with the majority’s position. In Nowlin, the debtor was permitted to increase her Qualified Contribution to the maximum allowable under her employer’s plan. It was only amounts in excess of that payment that were considered projected disposable income and required to become part of the chapter 13 payment after the 401 (k) loan was repaid. Id.

Similarly, in McCarty v. Lasowski (In re Lasowski), the debtor was making payments on a 401(k) loan that would be fully repaid during the chapter 13 plan. 575 F.3d 815, 817-18 (8th Cir.2009). In that case, the record is silent as to whether or not the debtor proposed to maintain, commence, or increase her Qualified Contributions to a Qualified Plan during the course of her bankruptcy. Id. The Eighth Circuit reached only the question of whether the “calculation of a debtor’s projected disposable income can take into account changes in the debtor’s financial circumstances that are reasonably certáin to occur during the term of the debtor’s proposed plan.” Id. at 819. That question was resolved by the Supreme Court’s holding in Lanning and is not at issue in this case. Lasowski does not support the majority’s irrebuttable presumption that a debtor may not use income available after repayment of a 401(k) loan to commence or increase Qualified Contributions.

The Supreme Court held in Lanning that “the court may account for changes in the debtor’s income or expenses that are known or virtually certain at the time of confirmation.” 130 S.Ct. at 2478 (emphasis added). Application of Lanning does call for consideration of how to deploy the portion of the debtors’ wages once the 401 (k) loans have been repaid. The trial court determined, implicitly at least, that the Debtors’ proposed Qualified Contributions are necessary to the support of Debtors or their dependants. The bankruptcy court therefore correctly took into account fluctuations in the Debtors’ disposable income resulting from the completion of the 401(k) loan repayments and the changes to the Debtors’ Qualified Contributions. The majority does not defer to the trial court’s factual determination, not only in these two cases, but would substitute its across the board determination in all future cases.

*220 Legislative History

The language now the source of dispute in these cases was added to the Bankruptcy Code as part of BAPCPA. The majority emphasizes Congress’ intention to ensure “debtors repay creditors the maximum they can afford,” (H.R.Rep. No. 109-31, pt. 1, at 2 (2005), U.S.Code Cong. & Admin. News 2005, pp. 88, 89) in support of its holding, claiming its decision mirrors the clear legislative intent of BAPCPA. It is an unfortunate fact that there exists virtually no real legislative history for the detailed provisions of BAPCPA. See Susan Jensen, A Legislative History of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, 79 Am. Bankr.L.J. 485 (2005).

Because the plain meaning of the statute unambiguously provides that Qualified Contributions are excluded from disposable income, as discussed above, there is no need to consider legislative history, were any such history available for the provisions under consideration. Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6, 120 S.Ct. 1942, 1947, 147 L.Ed.2d 1 (2000) (“[Wjhen the statute’s language is plain, the sole function of the courts — at least where the disposition required by the text is not absurd — is to enforce it according to its terms.”) (internal quotation marks omitted). Moreover, the legislative history does not evince congressional intent on this specific issue. The language of the statute shows that Congress appears to have balanced the competing policy priorities of (1) ensuring that unsecured eredi-tors receive the most debtors can afford to pay and (2) promoting participation in Qualified Plans. As BAPCPA determined how that was to be done, i.e., by allowing chapter 13 debtors to exclude Qualified Contributions from disposable income, it is not appropriate for the majority to determine that Congress has not struck the right balance between competing policies.6 As succinctly stated elsewhere:

Congressional intent on this point is sufficiently plain and is a matter of policy; as such, it does not lead to an absurd result. The goal to expand retirement savings is clear and the result is reasonable. Accordingly, amounts withheld from wages for contribution to a qualified retirement plan are not included in § 1325(b)(l)’s calculation of projected disposable income.

In re Shelton, 370 B.R. at 866.

The majority concludes that to allow debtors to start or to increase Qualified Contributions after repaying a 401 (k) loan, but while still in the chapter 13 case, would tip “the delicate balance struck by BAPC-PA impermissibly in favor of debtors.” This assertion suggests that chapter 13 debtors would use the exclusion created by § 541(b)(7) to begin or increase Qualified Contributions in order to abuse the bankruptcy process and avoid paying their unsecured creditors. It also assumes that this abuse can be fairly prevented by the irrebuttable presumption the majority now adopts. However, in light of the clear statutory language, the balancing of competing policy interests is not appropriately *221done by the courts. See SEC v. U.S. Realty & Improvement Co., 310 U.S. 434, 468, 60 S.Ct. 1044, 1059, 84 L.Ed. 1293 (1940) (“[The bankruptcy court’s] function is to make an equitable distribution of the estate among the creditors, but the principle has not been applied in the sense that the court may, in its better judgment, refuse to award the relief which Congress has accorded the [debtor].”); Gonzalez-Ruiz v. Doral Fin. Corp. (In re Gonzalez-Ruiz), 341 B.R. 371, 383 n. 15 (1st Cir. BAP 2006) (“[A] court may not alter rights that a debtor has been granted by Congress ... by determining that those rights are unfair or inequitable based on the court’s distaste for Congress’ choices.”).

Abuse of the bankruptcy process is prohibited by other provisions of the Bankruptcy Code and would not be abetted by any ruling this Panel makes in these cases. See 11 U.S.C. § 1307; 11 U.S.C. § 1325(a)(3), (a)(7); Alt v. United States (In re Alt), 305 F.3d 413, 419 (6th Cir.2002) (“The key inquiry [in a motion to dismiss a chapter 13 case] is whether the debtor is seeking to abuse the bankruptcy process.”). Predictably, most of the cases considering a debtor’s proposed commencement or increase of Qualified Contributions have focused on whether the facts of the particular case showed a lack of good faith. See supra note 2. There is no reason to think that abuse of the bankruptcy system is now unchecked because BAPCPA statutorily overruled earlier case law that applied blanket prohibitions. What BAPCPA did not change was the good faith requirement. The majority’s reasoning does not explain why a court should refuse to confirm a plan that a debtor has proposed in good faith if it provides for the debtor’s best efforts to repayment of creditors, meets the “best interests of creditors” test of § 1325(a)(4), and is otherwise in compliance with the requirements of the Bankruptcy Code, simply because it involves an increase in the debtor’s Qualified Contributions.

As other cases illustrate, debtors frequently have unusual circumstances either before or after their bankruptcy cases begin. The totality of the circumstances approach to the good faith inquiry is a more effective way of balancing two congressional purposes — to prevent abuse and to encourage retirement savings — -than is the Trustee’s irrebuttable presumption that the majority now adopts.

In re Lavin, for example, involved a debtor who had at one time made large Qualified Contributions, but reduced them as his debts rose and he struggled to pay creditors. He eventually stopped making the contributions and, after losing his job, filed for bankruptcy. He was able to find employment post-petition and began making very large contributions (19% of his salary) because he suffered from a medical condition that would force him to retire early due to disability. Lavin, 424 B.R. 558, 561-62. Under the majority’s holding, this debtor would not be able to make any Qualified Contributions during the life of his plan because he was unemployed at the moment of his bankruptcy filing and consequently not contributing to a Qualified Plan. The bankruptcy court would have no discretion to make an exception to this rule that the Trustee and the majority have conjured. Indeed, all debtors whose bankruptcy filings had been precipitated by an ongoing job loss would be absolutely prohibited from making Qualified Contributions from their post-petition employment wages, even if they had been making those contributions, or had not been eligible to make contributions, at their prior employment.

Similarly, in In re Jones, the debtors started making Qualified Contributions to the wife’s Qualified Plan after filing. The *222court found there was no absence of good faith based on the circumstances:

Both Debtors are fast approaching retirement age, and also have medical conditions that might hasten their retirements. After Debtors filed for bankruptcy, the Wife’s employer changed its retirement plan from one where it made contributions even if the Wife did not to one where it would match the Wife’s contributions but otherwise make none.

Jones, No. 07-10902, 2008 WL 4447041, at *5 (Bankr.D.Kan. Sept. 26, 2008). Under the majority’s interpretation, these debtors’ plans could not be confirmed. These cases do not evidence the abuse that Congress sought to eradicate with BAPCPA. See also In re Gibson, No. 09-01196, 2009 WL 2868445, at *8 (Bankr.D.Idaho Aug.31, 2009) (comparing factual circumstances relevant to debtors’ good faith in various cases involving post-petition increase or commencement of Qualified Contributions).

The suggestion that “[tjhere is nothing in the majority opinion that would prevent a debtor from making an argument after confirmation that a change in debtor’s circumstances justified committing income to a Qualified Plan” ignores several obvious points. See supra. First, that is precisely the type of factual inquiry that is appropriately addressed in the confirmation process pursuant to § 1325(b)(2)(A)(i), but the majority’s adoption of the Trustee’s reading that §§ 541(a)(1) and 1306 conclusively inform the amount of Qualified Contributions that debtors may allot in constructing chapter 13 plans inappropriately stops that inquiry at the starting block. The majority does not articulate why their method of calculating projected disposable income in the context of a post-confirmation motion to amend a chapter 13 plan would not be met with precisely the same brick-wall response. Indeed, given our recent holding in In re Storey, 392 B.R. 266 (6th Cir. BAP 2008), which addressed the limits of relief appropriately granted pursuant to 11 U.S.C. § 1329, such a course of action would be ineffective with respect to evidence that could have been presented in the confirmation process.

The majority’s rule, while preventing confirmation of good-faith debtors’ plans, would not be an effective method of eradicating abuse. High-income debtors who had made large Qualified Contributions as their debts mounted would be able to continue such payments during their bankruptcy regardless of whether they had any compelling reason to make large contributions. On the other hand, debtors who had reduced or stopped their Qualified Contributions in an attempt to pay creditors and avoid bankruptcy, like the debtor in Lavin, would be prohibited from contributing — truly a part of the “fresh start” for older debtors nearing retirement — until after they had completed their plans. See, e.g., In re Devilliers, 358 B.R. 849, 865 (Bankr.E.D.La.2007) (“Congress has determined that contributions to a qualified retirement account are, by their very nature, reasonable and necessary. By providing for a debtor’s eventual retirement, retirement contributions become part of debtor’s fresh start.”). The majority’s ruling also offers no accommodation to debtors for whom changed circumstances make new or increased post-petition Qualified Contributions reasonable and necessary.

The majority’s fear of growing gamesmanship presumes that courts, trustees, and creditors are unable to recognize unfair manipulation of the bankruptcy system. It replaces the bankruptcy courts’ discretion and judgment with an irrebutta-ble presumption that is not articulated in the Bankruptcy Code. Furthermore, it unfairly discriminates against low-income *223debtors in favor of high-income debtors. High-income debtors are more likely to have made Qualified Contributions prior to filing their bankruptcy petitions and more likely to have the ability to engage in pre-petition planning, such as by beginning their Qualified Contributions in anticipation of the filing. Low-income debtors, by comparison, are less likely to have made Qualified Contributions pre-petition and will probably be the most frequently disadvantaged were the majority’s holding in this case to become binding.7 The majority’s holding also does not prevent a debtor from dramatically increasing Qualified Contributions pre-petition so as to meet the requirement that contributions be in place before the petition is filed. Of course, such debtors may fail to show the good faith required by the Bankruptcy Code. However, the good faith requirement is also well-suited to avert abuse commenced after the petition date. See, e.g., Soc’y. Nat’l. Bank v. Barrett (In re Barrett), 964 F.2d 588, 592 (6th Cir.1992) (holding that a bankruptcy court should consider many pre- and post-petition factors in making a good faith determination).

In fact, the good faith analysis that courts already apply to confirmation of plans would apply well to situations like those presented here. Though Qualified Contributions are not part of disposable income, they are still relevant to good faith:

While it is apparent that Congress removed certain streams of income from being considered disposable income, it does not necessarily follow that Congress intended to handicap the courts’ good faith inquiries or unintentionally create a proverbial “loophole”.... BAPCPA expressly limited the application of § 541(b)(7) to one particular paragraph, § 1325(b)(2).... Had Congress sought to soften the good faith requirement, a statement to that effect is conspicuously absent.

Shelton, 370 B.R. at 867; see also Jones, 2008 WL 4447041, at *4 (weighing debtors’ post-petition commencement of retirement savings as a factor in analysis of good faith); but see Johnson, 346 B.R. at 263 (“Debtors are not required to contribute [retirement savings contributions] to their Chapter 13 plans. Consequently, in determining good faith under § 1325(a)(3), I may not consider them.”). Courts should consider the totality of the circumstances to determine debtors’ good faith. See Barrett, 964 F.2d at 591 (citing “totality of the circumstances” test for good faith inquiry in a chapter 13 case). A debtor’s proposal to increase or to begin Qualified Contributions post-petition is one of many circumstances that may be considered by a court assessing the debtor’s good faith. See, e.g., Shelton, 370 B.R. 861 (holding that plan proposing large payments to secured creditors and large contributions to retirement savings, but 0% payout to unsecured creditors, invites scrutiny of the debtor’s good faith); Gibson, 2009 WL 2868445, at *3 n. 5 (suggesting a situation in which a debtor proposes to commence, rather than *224increase, retirement contributions post-petition may merit heightened scrutiny). However, the court might be equally suspicious of a high-income debtor who seeks to maintain excessive Qualified Contributions throughout the bankruptcy process, although such a debtor would not be affected by the majority’s holding in this case. In either situation, upon an objection, the court would have to determine how much weight to give this factor and could consider the needs of individual debtor’s with respect to retirement savings, such as those noted in the cases cited in note 2, supra. Among the circumstances that bankruptcy courts have considered are:

1. Debtors’ proximity to retirement, by virtue of age or medical condition;
2. Debtors’ prior retirement savings and whether amounts already saved could be sufficient to support the debtors after retirement;
3. The likely cost of living during debtors’ retirement, considering medical conditions and other relevant concerns;
4. Whether debtors made contributions previously and decreased them due to job loss, reduced income, or attempts to pay creditors;
5. Whether debtors are contributing amounts in excess of what their employers will match, if an employer offers matching contributions, e.g., whether requiring debtors to forego some of their contributions would essentially force them to forego an employer-sponsored benefit;
6. Whether debtors have recently experienced a change in circumstances relevant to their retirement savings (new options from employer, new employer plan, new employer, sudden decrease in value of retirement savings, etc.); and
7.The relative percentages of debtors’ income being contributed to retirement savings and payments to creditors.

However, it does not appear that the issue of good faith is properly before the Panel in these cases.

Good Faith

The Trustee asserts that the Debtors have not proposed their plans in good faith, but this argument was raised for the first time on appeal. Generally, issues raised for the first time on appeal are not properly determined by the appellate court. Lockhart v. Napolitano, 573 F.3d 251, 261 (6th Cir.2009). The Trustee claims that the following language, in the objections to confirmation, makes clear reference to Debtors’ good faith:

In essence, the debtors are proposing that unsecured creditors chip in some $9,790.00 for Mr. Schuler’s retirement. The plan must be amended to show that plan payments will increase by the full amount of the [401(k) ] loan payment in the month after the loan is paid off. Schedule I reflects a deduction for a 401K/retirement loan payment. The loan will be paid in full in June 2010. The plan must be amended to show that plan payments will increase by $255 per month starting in July 2010.

These statements most directly reference the calculation of disposable income and do not mention good faith. This issue was therefore not preserved in these appeals.

Appellate courts may consider arguments first presented on appeal in “exceptional cases or particular circumstances, or when the rule [against doing so] would produce a plain miscarriage of justice.” Foster v. Barilow, 6 F.3d 405, 407 (6th Cir.1993) (cited in McFarland v. Henderson, 307 F.3d 402, 407 (6th Cir.2002)). The most common instance is *225when the issue is purely one of law that is presented to the appellate court with sufficient clarity and completeness that it may be resolved on appeal. Foster, 6 F.3d at 407 (noting that the exception to the rule that appellate courts will not consider issues first presented on appeal “is most commonly applied where the issue is one of law, and further development of the record is unnecessary”). The issue of good faith, in contrast, is a fact-specific inquiry not appropriately addressed for the first time on appeal, especially where the bankruptcy court record shows no discovery and the court made no factual findings on the issue. See Hardin v. Caldwell (In re Caldwell), 851 F.2d 852, 858 (6th Cir.1988) (identifying good faith as a factual finding reviewed for clear error). The Trustee argues that all the facts necessary to determine that the Debtors lack good faith are properly before the Panel based on the bankruptcy court’s record. Because the determination of a debtor’s good faith is a factual determination based on the totality of the circumstances, this is simply not the case. “[N]o one factor should be viewed as being a dispositive indication of the debtor’s good faith.... [T]he ‘totality of the circumstances’ means what it says: It exacts an examination of all the facts in order to determine the bona fides of the debtor.” Id. at 860 (citation omitted). Such an examination not having been sought from the bankruptcy court, the Panel may not now consider the Trustee’s argument regarding the Debtors’ good faith.

For these reasons, I would affirm the ruling of the bankruptcy court.

. For other purposes, Qualified Contributions are capped by ERISA.

. See, e.g., Nowlin v. Peake (In re Nowlin), 576 F.3d 258 (5th Cir.2009) (see infra); In re Lavin, 424 B.R. 558 (Bankr.M.D.Fla.2010) (seeking relief under chapter 7 did not constitute abuse where debtor obtained employment post-petition and thereafter began making 401(k) contributions, because such amounts would not be disposable income available to creditors in a chapter 13); In re Gibson, No. 09-01196, 2009 WL 2868445, at *2 (Bankr.D.Idaho Aug.31, 2009) ("Even if Debtors had not decided to begin making contributions to their 401(k) plan until after they filed their bankruptcy petition, the contributions would still not be classified as disposable income."); In re Jones, No. 07-10902, 2008 WL 4447041 (Bankr.D.Kan. Sept. 26, 2008) (refusing to find lack of good faith based on post-petition commencement of 401(k) contributions alone, where retirement plan changed post-petition so that employer would no longer contribute unless debtor also contributed); Mati, 390 B.R. 11, 17 (analyzing debtor’s proposed pían, which provided for increased 401(k) contributions, under the § 1325(a)(3) good faith requirement and concluding that the "Debtor is merely taking advantage of what the law allows.”); In re Shelton, 370 B.R. 861 (Bankr.N.D.Ga.2007) (holding that date that debtor began contributions would be relevant to good faith, not to disposable income); Baxter v. Johnson (In re Johnson), 346 B.R. 256, 263 (Bankr.S.D.Ga.2006) (debtors who increased their 401(k) contributions "may fund 401(k) plans in good faith, so long as their contributions do not exceed the limits legally permitted by their 401(k) plans.”); but see In re Prigge, No. 09-61545, 2010 WL 817282, at *9 n. 5 (Bankr.D.Mont. Mar. 4, 2010) (finding that debtors may not make 401(k) contributions during the life of a chapter 13 plan, regardless of when contributions commenced).

. In limiting its inquiry to 401(k) contributions, the majority ignores the potentially far-reaching consequences of its holding if applied to all Qualified Contributions. During oral argument, Trustee's counsel was adamant that there could be no increase in Qualified Contributions. The holding of the majority would be applicable to all forms of Qualified Plans identified in § 541(b)(7). Such a strict application of the irrebuttable presumption that abrogates the bankruptcy court's inquiry into reasonably necessary expenses would prohibit increases in contribution that are a condition of debtors' employment, which would occur if a debtor received a raise in a position that required mandatory percentage contribution, thereby increasing the actual dollar amount of the debtor’s contributions. Such a result would actually be more restrictive of chapter 13 debtors’ ability to participate in Qualified Plans than some pre-BAPCPA case law. See, e.g., New York City Employees Ret. Sys. v. Sapir (In re Taylor), 243 F.3d 124 (2d Cir.2001) (providing that whether contributions are mandatory should be a factor in the bankruptcy court's assessment of whether they are reasonably necessaty); In re Davis, 241 B.R. 704, 707 (Bankr.D.Mont.1999) (“[EJxpenses over which the debtor has no control, or which are necessary to the debtor's employment, are undoubtedly 'reasonably necessary.' ”) (quoting 8 Collier on Bankruptcy, § 1325.08[4][b][i]). Such a result is certainly at odds with Congress' intent to overrule pre-BAPCPA case law, which it viewed as overly restrictive of debtors' ability to participate in Qualified Plans.

. Section 1306(a)(1) includes "all property ... the debtor acquires after the commencement of the case, but before the case is closed, dismissed, or converted to a case under chapter 7, 11 or 12...The debtor’s post-petition wages are included in property of the estate by § 1306(a)(2). Qualified Contributions are taken from the debtor's wages and *218are therefore property of the estate under § 1306(a)(2). However, as discussed above, what constitutes "property of the estate” is not relevant to § 1325(b)(1)(B), the Code section controlling confirmation. As § 1306(b) provides, the debtor remains in possession of all property of the estate, except as otherwise provided in the plan. The plan, in turn, must provide for the distribution of all projected disposable income to creditors. There is no requirement that all property of the estate must be made available to creditors in a chapter 13 case. The definition of the estate remains important in a chapter 13 case. For example, the estate continues to define part of the scope of the automatic stay. 11 U.S.C. § 362(a)(3). However, it is not relevant to the debtor’s projected disposable income, which is the inquiry of § 1325(b)(1)(B).

. When Congress established two categories of consumer debtors based upon whether their income is determined to be above or below median income, it clearly articulated the two classifications and further eschewed the establishment of any irrebutta-ble presumptions, instead allowing for consideration of numerous individual facts and circumstances. 11 U.S.C. § 707(b)(3). Certainly in providing for those two classifications, Congress was dealing with a rational distinction between consumer debtors of differing income levels. In contrast, under the majority’s acceptance of the Trustee’s argument, debtors would be classified, at best, by random circumstances and at worst, as an inverse measure of their need to begin retirement savings. To put it mildly, this irrebuttable presumption raises due process questions which the majority simply ignores. See Vlandis v. Kline, 412 U.S. 441, 447, 93 S.Ct. 2230, 2234, 37 L.Ed.2d 63 (1973) ("Statutes creating permanent irrebuttable presumptions have long been disfavored under the Due Process Clauses of the Fifth and Fourteenth Amendments.”).

In Darrohn, the Sixth Circuit took note of the information that consumer debtors are directed to provide on Form B22C. That form was developed by the Administrative Office of the United States Trustee program in order to implement the Means Test. Part VI of that form directs debtors to "[l]ist and describe any monthly expenses, not otherwise stated in this form, that are required for the health and welfare of you and your family and that you contend should be an additional deduction from your current monthly income under § 707(b)(2)(A)(ii)(I).” Part VI thus provides debtors with the opportunity to describe, inter alia, circumstances that justify maximizing their Qualified Contributions beyond amounts reported in item 31 of Form B22C. As the Sixth Circuit observed in Darrohn, “[wjhile much of the [Supreme] Court’s analysis in Lanning focused on the income side of the projected disposable income formulation, the holding clearly applied to 'changes in the debtor’s income or expenses...” Darrohn, 615 F.3d 470 (emphasis added in the Sixth Circuit opinion) (citation omitted). Neither Lanning nor Darrohn support adoption of the Trustee’s irrebuttable presumption with respect to a particular category of expense. And I note again the presumption is not articulated in the Bankruptcy Code.

. The majority opinion states:

In regard to retirement savings, Congress clearly intended to strike a balance between protecting debtors' ability to save for their retirement, and requiring that debtors pay their creditors the maximum amount they can afford to pay. This balance is best achieved by pennitting debtors who are malc-ing contributions to a 401(h) plan at the time their case is filed, to continue making contributions, while requiring debtors who are not making contributions at the time a case is filed to commit post-petition income which becomes available, to the repayment of creditors rather than their own retirement plan.

See supra (emphasis added).

. See, e.g., Regina T. Jefferson, Redistribution in the Retirement System: Who Wins and Who Loses?, 52 How. L.J. 283, 299 (2010) (“Participation rates among low-income workers in the private retirement system is relatively low, and continues to decline.”). See also Hatty Yip, Double "Whammy: How the New Credit Card Nondischargeability Provision and the New Means Test Hit Single Mothers Over the Head, 15 Buff. Women's L.J. 33 (2006) (“To the extent that lower income debtors ... [proceed without counsel] they will get caught more than debtors who have the means to consult attorneys. Most of the 'traps’ are manageable for debtors who obtain competent legal advice pre-petition. Low income debtors get caught because no one warned them to either wait to file or not to do certain things before they file.” (quoting Bankruptcy Judge Maureen Tighe)).