- Case Type:
- Case Status:
- Reversed and Remanded
- 19-8004 (6th Circuit, Nov 25,2019) Published
- The Sixth Circuit Bankruptcy Appellate Panel has identified a flaw in the national Chapter 13 plan form. The BAP reversed the bankruptcy court's decision overruling an objection to confirmation and remanded. The objection to confirmation was based on the debtors' failure to include a special provision in the Chapter 13 form plan providing that creditor's lien survived until full payment of its claim or entry of discharge. The BAP held that Section 1325(a)(5)(B) required the inclusion of such a provision, even though the national Chapter 13 plan did not.
- Procedural context:
- The bankruptcy court initially confirmed the debtor's chapter 13 plan, but preserved the creditors' objection. The bankruptcy court later overruled the objection, as well as creditors' motion to reconsider, and creditor appealed. The BAP found that the combination of the orders confirming the plan and overruling the objection and motion to reconsider constituted final orders.
- The debtor financed a 2013 Buick Verano with Santander Consumer USA, Inc. within 910 days of his bankruptcy petition. The debt to Santander was included in section 3.3 of Official Form 113 - the national Chapter 13 Plan Form. However, section 3.3 of the national form does not include language which states that a secured creditor retains their lien until their claim is paid in full or the debtor receives a discharge as required by 11 U.S.C. Sec. 1325(a)(5)(B)(i). The debtor also declined to include such language in the special plan provisions. The bankruptcy court overruled Santander's objection, holding that the lien remained by operation of law, and thus no specific plan provision was required.
- Buchanan, Harrison and Wise; opinion by Wise
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