In re Perkins

(Bankr. W.D. Ky. Feb. 1, 2017)

The bankruptcy court denies the creditor’s request for default rate interest on the secured claim. The value of the real property securing the claim was in excess of the claim amount. Case law establishes that there is a presumption in favor of the contractual rate of interest, but it is subject to rebuttal when evidence establishes the default rate is significantly higher without justification. Here, the default rate doubled the non-default rate and the court finds there was no justification under the evidence presented. Opinion below.

Judge: Lloyd

Attorney for Debtor: Sandra D. Freeburger

Attorneys for Creditor: Stites & Harbison PLLC, Brian H. Meldrum, Brian R. Pollock

2017-02-01-in-re-perkins

Author: Matt Lindblom

In re Neace

(Bankr. E.D. Ky. Jan. 6, 2017)

The bankruptcy court overrules the creditor’s objection to confirmation of the Chapter 13 plan. The creditor argued its claim, secured by the debtors’ mobile home, should be increased by the cost of delivery and set-up of the home. The court holds that set-up and delivery costs may not be used as a means to increase the replacement value as a matter of law. Opinion below.

Judge: Wise

Attorney for Debtor: Daryle M. Ronning

Attorneys for Creditor: McBrayer, McGinnis, Leslie & Kirkland, Zachary A. Horn

2017-01-06-in-re-neace

Author: Matt Lindblom

In re Thornton

In re Thornton

(Bankr. S.D. Ind. May 23, 2016)

The bankruptcy court sustains the creditor’s objection to the proposed Chapter 13 plan, finding the creditor’s expert more credible than the debtor’s expert as to valuation of the debtor’s mobile home. Thus, the the creditor’s secured claim was higher than the amount provided for in the plan. The court also holds that certain of the appliances in the home are not accessions and thus are not subject to the creditor’s lien. Opinion below.

Judge: Moberly

Attorney for Debtors: Albright and Albright, Attorneys at Law, Jonathan Lamoin Albright, Jr.

Attorney for Creditor: Timothy J. O’Connor

2016-05-23 – in re thornton

Author: Matt Lindblom

In re Snowden

(Bankr. E.D. Ky. Feb. 12, 2016)

The bankruptcy court overrules the creditor’s objection to confirmation of the debtors’ chapter 13 plan. The creditor argued that its secured claim could not be modified pursuant to 11 U.S.C. § 1322(b). The collateral real property consisted of five parcels of real property that were contiguous, except for one intervening lot also owned by the debtors. That fact, along with the fact that the debtors purchased the parcels at separate times from different sellers, supported a finding that the lots were not solely the debtor’s principal residence. Thus, the anti-modification provision of § 1322(b) does not apply. Opinion below.

2016-02-12 – in re snowden

Author: Matt Lindblom

In re Ridings

(Bankr. E.D. Ky. Dec. 22, 2015)

The court denies the Chapter 13 debtors’ motion to modify the confirmed plan to reduce the secured claim of the IRS. The debtors argued that the collateral was not worth the amount of the claim, but the Court holds that reducing an allowed secured claim is not a modification permitted by the code. Opinion below.

2015-12-22 – in re ridings

Author: Matt Lindblom

Matteson v. Bank of America, N.A. (In re Matteson)

(6th Cir. B.A.P. Aug. 10, 2015)

The Sixth Circuit B.A.P. reverses the bankruptcy court’s finding that the mortgagee’s claim should be reduced by the amount the mortgagee would have received under the Chapter 13 plan if it had filed a proof of claim. The plan required the filing of a proof of claim in order to receive distributions under the plan. The mortgagee did not receive payments under the plan, and the debtor did not make the loan payments outside of the plan. After completion of the plan, the bankruptcy court held that, while the mortgagee’s liens remained, the amount of the debt must be reduced by the amount that would have been paid on the claims through the plan. The B.A.P. holds that there is no justification for this result, as the debtor or the trustee could have filed a proof of claim for the mortgagee if the debtor wished to pay the claim through the plan and avoid defaulting by not making payments outside the plan. Opinion below.

2015-08-10 – matteson v bank of america

Author: Matt Lindblom

Bank of America, N.A. v. Caulkett

(U.S. Sup. Ct. June 1, 2015)

The Supreme Court holds that a Chapter 7 debtor may not void a junior mortgage lien when the senior lien exceeds the value of the collateral. The Court recognizes that 11 U.S.C. § 506(a)(1) provides that an allowed claim is only a secured claim to the extent of the value of such creditor’s interest in the collateral. Section 506(d) provides that to the extent a lien secures a claim that is not an allowed secured claim, it is void. The Court suggests that the Code could be interpreted such that § 506(d) would allow the voiding of the junior mortgage lien, if not for the Court’s prior decision in Dewsnup v. Timm, 502 U.S. 410 (1992). There, the Court held that for purposes of § 506(d) a claim is a secured claim regardless of whether the collateral value is less than the lien amount. Thus, Dewsnup controls here and the debtors are not permitted to void the junior mortgages. Opinion below.

2015-06-01 – bank of america v caulkett

Author: Matt Lindblom