(Bankr. S.D. Ind. Oct. 22, 2015)
The bankruptcy court holds that the Chapter 13 debtor cannot cram down a portion of the auto lender’s secured claim because it represents a purchase money security interest (“PMSI”) for a vehicle the debtor purchased for personal use within 910 days of bankruptcy, which is protected from cram down by the hanging paragraph of 11 U.S.C. § 1325(a). However, the lender had paid off a prior loan as part of the current secured loan, but that did not pay off negative equity in collateral for the prior loan and was otherwise unrelated to the current loan transaction. Thus, the lender could not protect from cram down that portion of the claim. Opinion below.
Author: Matt Lindblom