In re Green, 348 B.R. 601 (Bkrtcy.M.D.Ga. 2006)
language of §1325(a)(9) (hanging paragraph) makes §506 inapplicable to a “910” debt
Debtor proposed to pay PMSI debt on motor vehicle in full through plan without interest. creditor objected, asserting that its secured claim it was entitled to interest. The court, adopting what it acknowledged was the minority view, held that as a “910” debt, section 506, which determines secured status, did not apply, and therefore debt was not entitled to interest through the plan.
In re Brown, 348 B.R. 583 (Bkrtcy.N.D.Ga. 2006)
§1326(a)(1) MSI creditor objected to chapter 13 plan. Creditor argued that the payment had to be made directly to creditor rather than through the trustee, and should be applied to interest rather than the principal. The court pointed to the language in §1326(a)(1) stating “Unless the court orders otherwise …” and held that this language gives the court discretion to alter the requirements of the remainder of the section which provides adequate protection payments to be paid within 30 days of filing the petition directly to the creditor with proof of payment to the trustee. And, payment could be made to the trustee rather than the creditor. The opinion offers a thorough exploration of the history of the general rule regarding post-petition interest and concludes “past bankruptcy practice supports the conclusion and the Court holds that these pre-confirmation adequate protection payments are to compensate for any depreciation in the collateral and should be applied to principal only.”
In re Osborne, 348 B.R. 500 (Bkrtcy.W.D.Mo. 2006)
§§1325(a)(9) (hanging paragraph), 1325(a)(5)(C)
” … the plain language of §1325(a)(5) and the hanging paragraph mandate that, as a matter of law, a secured creditor of the kind described in the hanging paragraph has a secured claim for the full amount due as of the date of the filing of the petition, regardless of whether the debtor intends to retain the collateral or surrender it. That being the case, these creditors are not entitled to a deficiency claim if the collateral is surrendered under § 1325(a)(5)(C).”
In re Rowley, 348 B.R. 479 (Bkrtcy.S.D.Ill. 2006)
§506(a), 1325(a)(9) (hanging paragraph)
Debtor’s chapter 13 plan proposed to strip down an undersecured purchase-money security-interest on her car. The debtor’s theory was that she had no equity in the vehicle and was therefore not subject to constraints against cramdown prescribed at § 1325(a)(9). The court rejected this theory observing that the applicable code sections do not mention equity as a prerequisite to prohibiting cramdown.
In re Davis, 348 B.R. 449 (Bkrcy.E.D.Mich. 2006)
§1325(b)(1)(B): “applicable commitment period” determines length of chapter 13 plan
In case where the debtor’s income was over the state median, Chapter 13 trustee objected to debtor’s plan proposing to make payments for 36 months rather than 50 months. The debtor argued that the term “applicable commitment period” found at § 1325(b)(1)(B) does not determine the actual length of the plan but only functions as a multiplier pursuant to § 1325(b)(4). The court rejected this theory primarily based on the dictionary definitions of the words “period” and “commitment,” and concluded “… a debtor’s applicable commitment period, as determined by § 1325(b)(4) does impose a minimum length of a plan, rather than a calculation of a minimum amount…”