Colbourne v. Ocwen (In re Colbourne)
- Summarized by Stephen Starks , Phelan Hallinan Diamond & Jones PLLC
- 9 years 7 months ago
- Greg F. Colbourne v. Ocwen 12-14722(11th Cir Oct, 2013) (unpublished)(per curiam)
- Circuit Court affirmed bankruptcy court ruling that because Debtor ineligible for a Chapter 13 discharge he could not cram down the value on first-priority liens on investment properties in his Chapter 13 plan.
- Procedural context:
- Appeal from the Middle District Court of Florida's ruling affirming bankruptcy court's denial of Debtor's Motions to Value the collateral.
- Debtor received a chapter 7 discharge and one month later filed a Chapter 13. His Chapter 13 plan attempted to cram down first-priority mortgage liens on two investment properties. Under 1325(a)(5)(B)(I)(1) the plan must provide that the secured lienholder retain the lien until either payment of the underlying claim under nonbankruptcy law or discharge under 1328.
Absent debtor's ability to obtain a discharge any modification to the creditor's rights would be ineffective when the plan is completed. Creditor is therefore entitled to full payment on the underlying claim prior to having to release its lien.
- Circuit Judges Martin, Fay, Edmondson
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