Carrion v. Rivera (In re Rivera)

Summarized by David Baker , Law Office of David G. Baker
12 years 10 months ago

Citation:

2013 WL 1406209

Tag(s):

Ruling:

The BAP affirmed the bankruptcy court's decision to confirm the debtor's chapter 13 plan.

Procedural context:

This is an appeal from an order confirming a chapter 13 plan and overruling the chapter 13 trustee's objection to confirmation.

Facts:

The debtor proposed a rather specific treatment not only of secured and priority claims, but also proposed to separately classify a certain general unsecured claim because his mother-in-law was a guarantor on that claim. The claim at issue also represented 9.78% of the total general unsecured claims. By separately classifying it based on the co-debtor obligation, the debtor was proposing to pay that specific unsecured claim 100%, while all other general unsecured claims would receive a dividend estimated at 4.51%. The trustee objected to confirmation, calling the discrimination unfair within the meaning of § 1322(a)(3) and b(1). Essentially, the trustee was arguing that a debtor has no authority to specify how the trustee is to distribute projected disposable income. The bankruptcy court disagreed, and the BAP affirmed, holding, in essence, that so long as a separate classification of a co-debtor claim is not proposed in bad faith, the plan must be confirmed.

Judge(s):

Haines, Feeney (author) and Hoffman.

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