The following is for the exclusive use of attorneys. This firm does not make any representations as to the accuracy or current status of any case cited herein. Please do your own due diligence.
If you are not an attorney it is very important that you obtain legal advice from an experienced attorney regarding your particular situation. Consultation before you take action will certainly cost you less than what it will cost to fix your unintentional errors.
The information in this web site is not intended to constitute legal advice or to create an attorney-client relationship.
VIOLATION OF THE AUTOMATIC STAY:
The following is for the exclusive use of attorneys. This firm does not make any representations as to the accuracy or current status of any case cited herein.
In Re: Lansaw, April 10, 2017 (United States Third Circuit) – In a case arising out of repeated violations of the bankruptcy automatic stay of debt collection activities, 11 U.S.C. section 362(a), committed by debtors’ landlord, the district court’s judgment in favor of debtors and award of damages under section 362(k)(1) are affirmed where:1) section 362(k)(1) authorizes the award of emotional-distress damages and the debtors presented sufficient evidence to support such an award; and 2) debtors were properly awarded punitive damages.
Civil Contempt proceedings not violation of automatic stay;
Dingley v. Yellow Logistics, LLC, (9th Cir, March, 2017)
Read Dingley v. Yellow Logistics, LLC, 14-60055 In an Chapter 7 bankruptcy case, the BAP’s decision is affirmed on different grounds where the bankruptcy court erred by sanctioning creditors for violating the automatic stay by pursuing civil contempt proceedings against the debtor based on his failure to pay discovery sanctions in a state court action, because civil contempt proceedings are exempted from the automatic stay under the Bankruptcy Code’s government regulatory exemption, 11 U.S.C. section 362(b)(4), when, as here, the contempt proceedings are intended to effectuate the court’s public policy interest in deterring litigation misconduct.
Section 362(C)(3)&(4) – Multiple Filers: VIOLATION OF AUTOMATIC STAY:
In re Schwartz-Tallard, No. 1260052 (9th Cir. Oct. 14, 2015). A debtor may recover all attorney fees incurred in prosecuting an action for damages under § 362, not just those incurred until the stay violation ceases.
In re Perl CC-13-1328-KiTaD (B.A.P. 9th Cir. May 30, 2014) Purchaser of debtor’s property at foreclosure sale violated the automatic stay by not advising the Sheriff to desist in its efforts to lock out and evict Perl from the Residence. We further note that changing the locks on the Residence, locking inside Perl’s personal property, which was also property of the estate, was an act to exercise control over property of the estate in violation of § 362(a)(3). See In re Gagliardi, 290 B.R. 808, 815 (Bankr. D. Colo. 2003).
VI. CONCLUSION Based on the foregoing reasons, we AFFIRM the portion of the Order ruling that the postpetition lockout/eviction by the Sheriff of the debtor from his residence on June 27, 2013, violated the automatic stay and is void.
Rupanjali v. Check into Cash of Washington, Inc Matter of Snowden, No. 13-35291 (9th Cir. Sep. 12, 2014) Ruling: For an automatic stay violation, the chapter 7 debtor was entitled to receive emotional distress damages, punitive damages, and attorney fees incurred to end the violation, but not fees incurred to recover damages.
The bankruptcy court awarded the debtor emotional-distress damages, punitive damages, and attorney fees incurred through the date the creditor made a conditional offer to return the funds improperly taken from the debtor’s bank account after the petition date. The district court affirmed. The court of appeals affirmed the bankruptcy court’s decisions on emotional-distress damages and punitive damages, but it reversed the bankruptcy court’s award of attorney fees because the award excluded some fees incurred to end the stay violation.
America’s Servicing Co. v. Schwartz-Tallard, No. 12-60052 (9th Circuit, 04/16/2014) The Bankruptcy Appellate Panel’s reversal of the bankruptcy court’s decision is affirmed where the bankruptcy debtor was not precluded from recovering, as damages, attorney fees for defending against a creditor’s appeal of a finding that the creditor violated the automatic stay.
Gasprom, Inc v. Fateh, et al. (In re Gasprom, Inc) CC-12-1567-KuKiTa, (9th Cir. BAP 10/29/13) Ruling: Foreclosure of real property was in violation of automatic stay where chapter 7 trustee abandoned real property but bankruptcy case was still open and creditor had not obtained relief from stay. The bankruptcy court here concluded that the August 1, 2012 foreclosure sale had not violated the automatic stay. The bankruptcy court reasoned that the Trustee’s abandonment of the Gas Station earlier that same day had fully terminated the stay as to the Gas Station. We disagree. By operation of law, the August 1, 2012 Abandonment Order only terminated one aspect of the stay, the aspect protecting the Gas Station as “property of the estate.” Upon abandonment, the Gas Station no longer was property of the estate; title to the Gas Station reverted to Gasprom. See Catalano v. Comm’r, 279 F.3d 682, 685 (9th Cir. 2002). Hence, the aspect of the stay protecting estate property no longer applied. See § 362(c)(1).
But the abandonment did not by operation of law terminate the aspect of the stay arising from § 362(a)(5), which protects “property of the debtor.” Absent a ruling by the court granting relief from stay under § 362(d) so as to permit foreclosure to occur, § 362(a)(5) continued to protect the Gas Station from foreclosure, at least until the bankruptcy court closed Gasprom’s bankruptcy case on August 16, 2012. See § 362(c)(2).
Failure to return vehicle after chapter 13 filed
Weber v. SEFCU, No. 12-1632 (2nd Cir, 05/08/2013) Judgment finding that defendant violated the Bankruptcy Code’s automatic stay provision, 11 U.S.C. section 362, is affirmed, where: 1) defendant exercised control over property of the debtor’s bankruptcy estate in contravention of section 362 when it failed to relinquish the debtor’s vehicle promptly after it learned that a Chapter 13 petition was filed; and 2) because defendant willfully violated section 362(a), it is liable under section 362(k) for debtor’s actual damages, costs, and attorney’s fees and the matter is remanded for a determination of the same. Read more…
Garnishment of Wages
When there is a pending garnishment to file a Motion to Quash the Garnishment with the Order telling the Creditor to release any monies to the Trustee. The garnishing creditor, and attorney, have an affirmative duty to quash the wage garnishment. See Sternberg vs. Johnson, 582 F.3d 1114 (9th Cir. 10/2009)
Wells Fargo freezing bank accounts: In re MWANGI and MWICHARO vs Wells Fargo Bank Bk. No. 09-24057-BAM (9th Cir. BAP NV-09-1408-DHPa) The bankruptcy court erred when it determined that Wells Fargo did not exercise control over property of the estate when it placed its administrative freeze on Appellants’ account funds. Appellants have standing to seek sanctions against Wells Fargo pursuant to § 362(k) for willful violation of the stay with respect to their interest in estate property. We REVERSE and REMAND to the bankruptcy court for further proceedings in light of our conclusions herein. See also, Zavala and Catbagan vs Wells Fargo, case number 10-91718-E-7, E.D. CA
Creditor files complaint or moves for judgement after bankruptcy filed – attorney must take immediate affirmative action to undo the stay violation. A motion in the civil court to vacate the judgment is a starting point. See Sternberg v. Johnston (9th Cir. Nos. 07-16870 & 08-15721)
In re Anderson, (Bkrtcy.S.D.Iowa) July 13, 2010: Debtor Protections – Creditor’s conduct in repeatedly contacting debtor in violation of the stay warranted punitive damages of $10,000.00. The Chapter 7 debtor-husband was entitled to an award of punitive damages in the amount of $10,000.00 as a result of a creditor’s conduct in continuing its collection efforts postpetition, in willful violation of the automatic stay. The creditor, an entity with an extremely large volume of bankrupt accounts that was sophisticated in the industry, contacted the debtor regarding the debtors’ credit card account several times, even after it was given notice of the debtors’ bankruptcy filing and despite the fact that the debtors’ counsel provided the creditor with written verification of the filing and with requested documentation. Although the creditor was informed repeatedly of the filing, it ignored this information without considering the possibility of computer error or initiating follow-up with the debtors’ counsel, thereby engaging in egregious misconduct. The failure of the creditor to take any initiative to check the accuracy of its database’s information rose to the level of total disregard of the debtor’s right.
What Damages Is a Debtor Entitled to for a Creditor’s Violation of the Automatic Stay, After Sternberg v. Johnston? Last October a Ninth Circuit panel upset a series of the circuit’s Bankruptcy Appellate Panel precedents and what had appeared to be the Ninth Circuit’s own precedents by greatly limited the attorney fees which a debtor could receive for a creditor’s “willful violation” of the automatic stay under §362(k).
Then on Monday, February 8, in response to petitions for a panel rehearing and for a hearing en banc, the panel issued an order amending its earlier opinion by adding to it one clarifying footnote. It emphasizes that the opinion focuses only on the damages permitted under §362(k), leaving open “the availability of contempt sanctions, including attorney fees, for violation of the automatic stay, where otherwise appropriate.” The footnote points to the 2003 Ninth Circuit opinion, In re Dyer, 322 F. 3d 1178 (9th Cir. 2003), for guidance on this civil contempt authority of the bankruptcy court.
What do the combination of the Sternberg v. Johnston and In re Dyer opinions tell us about the damages that a debtor is entitled to after a creditor violates the automatic stay?
Actual Damages: Attorney Fees & Emotional Distress under §362(k) §362(k) states, in pertinent part, that: an individual injured by any willful violation of [the automatic] stay . . . shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.
Attorney Fees Sternberg v. Johnston dealt almost exclusively with the approximately $70,000 in debtor’s attorney fees that the bankruptcy court had awarded under §362(k). The Ninth Circuit panel held that a creditor is liable only for debtor’s “attorney fees related to enforcing the automatic stay and remedying the stay violation.”
The debtor could NOT recover his or her attorney fees “incurred in prosecuting the bankruptcy adversary proceeding in which he pursued his claim for those damages.” CLICK HERE FOR MORE STORY
In re McMahon, 129 F.3d 93, (Utility could apply deposit against debtor’s unpaid bill for prepetition services without violating the automatic stay since the application was a recoupment).
REVOCATION OF LICENSE
Does the automatic stay stop this action? The stay does not apply to administrative proceedings so it is possible that a realtor would lose her license and that the automatic stay does not prevent it. You could try to argue that it is a “back door” collection action. See In re Games, 213 BR 773 (Bankr. ED Wash, 1997) where the Court held that the automatic stay bars revocation of a driver’s license for failure to pay civil fines if the revocation constitutes a collection effort). BUT see In re FCC 217 F3d 125 (2nd Cir., 2000) where the automatic stay does NOT preclude the FCC from re-auctioning a spectrum license when the debtor failed to make timely payments.
Section 362(C)(3)&(4) – Multiple Filers:
In re Brandon, 349 B.R. 130 (Bkrtcy.M.D.N.C. 2006) CATHERINE R. CARRUTHERS, Bankruptcy Judge AUTOMATIC TERMINATION OF STAY IN CASE OF REPEAT FILER TERMINATED STAY AS TO PROPERTY OF THE DEBTOR BUT NOT AS TO PROPERTY OF THE ESTATE §362(c)(3)(A) Where debt had a prior case pending within a year of filing the present case. Pursuant to newly added § 362(e)(3)(A) the automatic stay automatically terminated on the 30th day following the petition filing. The court held that the stay was not terminated as to property of the estate. The court also reiterated the rule that the stay is not terminated as to any creditor’s action unless it was taken prepetition, pursuant to the language ” … with respect to any action taken.”
In re Striblin, 349 B.R. 301 (Bkrtcy.M.D.Fla. 2006) JERRY A. FUNK, Bankruptcy Judge NEW EXCEPTION TO AUTOMATIC STAY APPLIES ONLY TO POSTPETITION TRANSFERS INITIATED BY THE DEBTOR § 362(b)(24) Third party, in ignorance of debtor’s recently filed bankruptcy, purchased debtor’s homestead property at a scheduled foreclosure sale. The transfer was a violation of Code § 549, unauthorized transfer of property of the estate, and was avoidable. The Reform Act added § 362(b)(24), a new exception to the automatic stay for transfers not avoidable under § 549 or 544. The court held that the transfer in this case was not initiated by the debtor and was thus avoidable. Accordingly, it did not fit under the newly enacted exception to the automatic stay, and the sale was void.
From ABI’s BLOG – 7/06 Generally, where a debtor has been in one prior bankruptcy case which has been dismissed within the year prior to the current case, new 362(c)(3) provides that certain protections of the automatic stay terminate on the 30th day unless a motion to extend the stay is filed and heard before the 30th day. We mentioned in Part IV how the decision in In re Toro-Arcila, 334 B.R. 224 (Bankr. S.D. Tex. 2005) effectively found a way around the 30-day deadline for hearing a motion to extend the stay under 362(c)(3) by holding that a single repeat filer could still use the provisions of 362(c)(4) (which generally cover multiple repeat filers) to reimpose the stay after they stay had expired. Typically this situation arises where the debtor files the motion too close to the 30th day to get a hearing (there is generally no good reason for waiting so long, by the way). At least one other court has concurred with Toro-Arcila, and has ruled that a debtor who files a motion within the 30 day period, but fails to get it heard, can still pursue reimposition of the stay under 362(c)(4). In re Beasley, 339 B.R. 472 (Bankr. E.D. Ark. 3/16/06).
Judge Dalis in Georgia disagreed. In re Whitaker, 341 B.R. 336 (Bankr. S.D. Ga. 4/20/06). All was not lost for the debtor, though. Judge Dalis did not subscribe to the reasoning in Toro-Arcila that much of 362(c)(4)(D) would be rendered meaningless surplusage if that section only applied to multiple repeat filers. But since the debtor had established a case to overcome the presumptive lack of good faith, and there was no other way of granting relief, the court held that it could reimpose the stay under 11 U.S.C. s. 105, which gives the court authority to issue orders “necessary or appropriate” to carry out the provisions of the Code. In doing so, Whitaker relied on a long line of prior decisions recognizing the authority to reimpose the stay in appropriate circumstances.
While Beasley and Whitaker involved situations where stay extension motions were filed on the eve of the 30 day deadline, and consequently could not be heard before the deadline passed, creditors nonetheless should be aware that they need to be on their toes. In In re Frazier, 339 B.R. 516 (Bankr. N.D. Fla. 3/17/06), a court held that five days’ notice of a hearing on a motion to impose the stay under 362(c)(4) was adequate. In Frazier, the court reports that the debtor’s counsel prior to filing the motion had called the counsel who represented the creditor in the prior case, and served the motion and notice of hearing by fax and mail, and that the creditor (and counsel) did not respond to the motion or appear at the hearing. The creditor then moved for reconsideration, claiming not to have received notice, but at the hearing on the motion for reconsideration failed to provide any evidence and the lawyer appearing had minimal knowledge of the case. The Frazier court held the notice adequate, and made clear that it expected creditors to be prepared to respond to such motions on short notice: “The limited automatic stay for repeat filers is a major feature of BAPCPA which was passed by congress at the behest of the credit industry. Now that they have it, the credit industry, and especially the mortgage servicing companies and the law firms they retain to represent them, need to adapt their practices in order to deal with what they have created.”
But one of the most significant – and perhaps surprising – ways in which the significance of the 362 amendments has been limited is that courts are actually taking Congress at its word. Specifically, in 362(c)(3)(A), Congress amended the Code to provide that when a debtor has been in a prior case dismissed within a year of the present filing, the stay shall terminate “with respect to the debtor” on the 30th day after the filing date unless an extension of the stay is granted. Now, bankruptcy practitioners know that “property of the debtor” is generally something different than “property of the estate”. Section 362 as it existed prior to the amendments makes multiple, clear distinctions between property of the debtor and property of the estate, and the effect of the stay as to each. Moreover, Congress used different language in 362(c)(4) in describing what happens to multiple repeat filers (i.e., more than one prior case dismissed in the year prior to the current case), where it says, without any such distinctions, that “the stay under subsection (a) shall not go into effect.”
Applying generally accepted principles of statutory construction — that when particular language is used in one section but not another, it is presumed that Congress acts purposefully in using the different language to signify different meanings — several courts have held that 362(c)(3), if triggered, terminates the automatic stay only as to actions against the debtor or against property of the debtor, but not against property of the bankruptcy estate. See, e.g., In re Harris, 342 B.R. 274 (Bankr. N.D. Ohio 5/1/06); In re Jones, 339 B.R. 360 (Bankr. E.D.N.C. 3/21/06); In re Moon, 339 B.R. 668 (Bankr. N.D. Ohio 3/28/06). Each of these courts notes that if Congress had intended to terminate the stay completely after 30 days for single repeat filers under 362(c)(3), it could have simply used similar language to that used for multiple repeat filers under 362(c)(4). Having chosen not to do so, judges must assume Congress meant what it said.
In re Ellis, 339 B.R. 136 (Bkrtcy.E.D.Pa. 2006) DIANE WEISS SIGMUND, Chief Judge BAPCPA TREATS MOTION TO EXTEND STAY DIFFERENTLY AS BETWEEN CERTAIN CREDITOR OR ALL CREDITORS
FAILURE TO DEMONSTRATE CHANGED CIRCUMSTANCES IS GROUNDS FOR DENIAL OF MOTION TO EXTEND STAY
§ 362(c)(3)(C)(i) and 362(c)(3)(C)(ii)
Debtor’s motion to extend the automatic stay brought timely with 30 days of filing the petition was denied on grounds of bad faith where debtor could not demonstrate change of circumstances from previous dismissed case.
In re Warneck, 336 B.R. 181 (Bankr. S.D.N.Y., 2006) CECELIA G. MORRIS, Bankruptcy Judge DEBTOR WAS ENTITLED TO EXTENSION OF AUTOMATIC STAY WHERE DEBTORS DEMONSTRATED GOOD FAITH FOR SECOND FILING
BAD FAITH IS PRESUMED ONLY AS TO CREDITOR WHO FALLS WITHIN § 362(c)(3)(C)(ii)
The court found the second filing was in good faith as to all creditors where:
– The Debtors’ Second Filing was dismissed for failure to make payments pursuant to a proposed plan of reorganization that had not yet been confirmed, the provision in Section 362(c)(3)(C)(i)(II)(cc) — failure to “perform the terms of a plan confirmed by the court” — does not apply.
– There is no evidence that the Debtors failed to file or amend their petition, or other documents in the Second Filing. There is also no record in the Second Filing of any motion to lift the automatic stay, and no evidence that the Debtors failed to provide court-ordered adequate protection to any party.
– The Debtors have filed affidavits from their daughter, Amy Wade, and son-in-law, William Wade, stating that they are willing and able to fund the Debtors’ plan in the amount necessary to complete a Chapter 13 plan.
In re Ziolkowski 338 B.R. 543 (Bkrtcy.Conn. 2006) LORRAINE MURPHY WEIL, Bankruptcy Judge. DEBTOR’S ATTORNEY CAN’T RELY ON COURT CLERK TO CALENDAR MOTION TO EXTEND STAY WITHIN 30-DAY DEADLINE § 362(c)(3)
Debtor had a previous case that had been dismissed within a year of filing the second case. The debtor’s attorney filed a motion pursuant to § 362(c)(3)(B) prior to the expiration of the 30-day deadline in which hearing must be held. However, the attorney relied on the court clerk to calendar the actual hearing within the 30-day period. Clerk actually set the hearing at a date beyond the 30-day deadline.
Court held error in relying on clerk was not sufficient grounds to order an extension of the stay. Motion was denied. “However, to say that the Clerk’s Office should have scheduled the Motion for a hearing to be held prior to the Hearing Deadline is not dispositive here. The Debtors were the movants and it was their ultimate burden to insure that the Motion was timely scheduled. When the Notice of Hearing was not issued timely (i.e., within three days), it was incumbent on the Debtors’ counsel to take action. A telephone call to the Clerk’s Office probably would have produced the necessary corrective action.”
Americredit Fin. Servs., Inc. v. Nichols (03/16/06 – No. 04-2107) (6th Cir) Denial of a creditor’s motion to lift an automatic stay and grant of debtors’ motion to modify their Chapter 13 bankruptcy plan pursuant to 11 U.S.C. section 1329 is affirmed where, under the circumstances of the case, there was no abuse of discretion in the decisions.
http://caselaw.lp.findlaw.com/data2/circs/6th/042107p.pdf [PDF File] – a good review of motion for relief practice and standards.
In re Stinsen, Charles E. (9th Cir. BAP 200)3 EMOTIONAL DAMAGES FOR VIOLATION OF 362 REQUIRES SUBSTANTIAL ECONOMIC LOSS In order to receive an award for emotional damages under 11 USC 362(h), there must be significant economic loss caused by the willful violation of the automatic stay. A debtor must first show a significant economic loss caused by the stay violation and then establish that his loss caused him emotional injury.
This opinion thoroughly explores the state of case law on this issue; when is the debtor entitled to general damages for violation of the automatic stay? As demonstrated by the analysis in this case, it is an unsettled issue.
40235 WASHINGTON ST. CORP. v. LUSARDI (05/23/03 – No. 01-56644/56801) (9th Cir) Bankruptcy Code section 549(c) does not create an exception to the automatic stay provision, section 362(a), and Cal. Rev. & Tax. Code section 3728 is preempted by the automatic stay provision.
ALLEN v. ALLEN (01/11/02 – No. 00-35528) (9th Cir. Ct App) Marital dissolution proceedings relating to spousal support are not subject to the automatic stay provisions of 11 USC 362(b)(2)(A)(ii).
CATALANO v. COMM’R INTERNAL REVENUE (01/28/02 – No. 00-70998) (9th Cir Ct Apps) A court order granting relief from an automatic stay in bankruptcy, under 11 U.S.C. Section 554, does not by itself constitute a de facto abandonment of property by the bankruptcy estate.
MARRIAGE OF SPRAGUE (01/09/03 – No. G030108) (CA) A creditor must obtain relief from an automatic bankruptcy stay to pursue a family law matter in state court, when the family law matter is a core bankruptcy proceeding.
ESKANOS & ADLER, P.C. v. LEETIEN (11/07/02 – No. 01-56203) (9th Cir Ct App) 11 U.S.C. section 362(a) of the Bankruptcy Code imposes an affirmative duty to discontinue post-petition collection actions, and sanctions are appropriate under section 362(h) where a collection agent willfully violated an automatic stay after receiving notice of a bankruptcy petition. 11 U.S.C. section 362(a) of the Bankruptcy Code imposes an affirmative duty to discontinue post-petition collection actions, and sanctions are appropriate under section 362(h) where a collection agent willfully violated an automatic stay after receiving notice of a bankruptcy petition.
In re Reeves, 265 B.R. 766 (Bankr. N.D. Ohio 2002) (ex-employer did not violate discharge injunction by deducting from severance payments payable to debtor under the employment agreement sums sufficient to satisfy debtor’s obligations pursuant to the same employment agreement to reimburse employer for charges on company credit card)
In re Norman, 346 B.R. 181 (Bkrtcy.N.D.W.Va. 2006) DEBTOR WHO FILED MOTION TO EXTEND STAY TOO LATE TO BE HEARD WITHIN 30 DAYS OF FILING PETITION COULD NOT GET EXTENSION § 362(c)(3)(B), § 362(c)4)(B). The debtor, a one-time repeat filer, filed motion to extend the automatic stay on the 28th day following filing the petition. The court ruled this was not adequate time for notice to parties and hearing on the motion could not be had, and hence order extending stay could not be had, within the 30-day period prescribed by the Code. The debtor argued that he was only required to file the motion within the 30-day period, not obtain an order, pursuant to § 362(c)(4)(B). The court pointed out that this section pertains only to cases where the debtor is a two-time repeat filer, and provides that the stay does not take effect upon filing the petition, but the court can order the stay imposed if a motion is made within 30 days.
In re Boring, 346 B.R. 178 (Bkrtcy.N.D.W.Va. 2006) AUTOMATIC STAY WAS TERMINATED 30 DAYS AFTER PETITION WAS FILED WHERE DEBTOR WHO WAS CURRENT ON CAR PAYMENTS DID NOT SELECT ANY AUTHORIZED OPTION ON STATEMENT OF INTENTIONS; OPTION TO RETAIN AND KEEP CURRENT WAS NOT AUTHORIZED BY THE CODE § 362(h)(1), § 521(a)(2)(A) The Chapter 13 debtor filed a statement of intentions with regard to her motor vehicle, but selected neither the option to redeem, nor to reaffirm, nor to surrender the vehicle, but instead to retain and keep the payments current (i.e., a “ride-through”). Court ruled that this failed to satisfy requirements of § 362(h)(1) and stay was terminated 30 days after case was filed.
The creditor asserted it had a right under § 521(d) to repossess the vehicle, notwithstanding any general policy negating the effect of a “default on filing” clause in the contract. The court held that since the automatic stay was terminated, the creditor was free to exercise whatever rights it may have under non-bankruptcy law, and declined to rule on whether the creditor in this case had the right to repossess the car where the payments are current.
In re Brown, 346 B.R. 246 (Bkrtcy.M.D.Ga. 2006) SECURED CREDITOR WITH PMSI FOR MOTOR VEHICLE IS ENTITLED TO PAYMENT IN FULL IN CHAPTER 13 WITH INTEREST BECA– USE ANTI-CRAMDOWN PROVISION DID NOT AFFECT SECURED STATUS UNDER § 506: INTEREST WOULD BE NOT THE CONTRACT RATE BUT “TILL” FORMULA § 506, § 1325(a) Debtor proposed to pay PMSI claim in full but at 7% interest, and argued that language of § 1325(a) removed the claim from status as a “secured claim” as provided at § 506. Court held that § 1325 prohibits cramdown and does not remove the claim from status as a secured claim. Creditor argued interest rate should 19% as provided in PMSI contract; court rejected that argument and held that the proper interest rate is that calculated pursuant to Till v. SCS Credit Corp., 541 U.S. 465, 124 S.Ct. 1951 (2004).
Disclaimer: The information in this web site is not intended to constitute legal advice or to create an attorney-client relationship. The information, documents or forms provided herein is intended for general information purposes only and must not be regarded as legal advice. Laws change periodically; therefore the information in this site may not be accurate. It is imperative that you seek legal counsel in order to ascertain your rights and obligations under the applicable law and based upon your specific circumstances.