In re Long, Case No. 06-10601 (Bankr. W.D.N.C. Feb. 1, 2007)(Hodges) - The matter before the court was whether 11 U.S.C. §1325(a)(5) permits a debtor to surrender a vehicle purchased within 910 days prior to the petition date to the secured creditor in full satisfaction of that creditor's claim. The court concluded that such treatment is not authorized and that the secured creditor is entitled to an unsecured claim for any deficiency balance after liquidation of the vehicle. Accordingly, the court granted GMAC's motion for relief from stay and allowed GMAC 120 days from the date of the Order to file an unsecured claim for any deficiency balance remaining after liquidation of its collateral. This matter has been appealed to the District Court.

In re Bortzer, Case No. 06-31959 (Bankr. W.D.N.C. Jan. 24, 2007)(Hodges) - The court sustained GMAC's Objection to Confirmation and adopted the reasoning of the Bankruptcy Courts for the Middle and Eastern Districts of North Carolina in holding that the "prime plus" formula adopted in the Till case was the appropriate interest rate to be applied to all secured claims covered by 11 U.S.C. § 1325(a)(5)(B)(ii), even if the interest rate called for in a particular secured creditor's contractual agreement with the debtor is lower.

In re Halvorson, Case No. 06-20015 (Bankr. W.D.N.C. Jan. 19, 2007)(Hodges) - This matter came before the court upon the Chapter 13 Trustee's motion for a Plan modification and the debtor's objection thereto. The court confirmed the debtor's Plan which required a payout of 25% to the unsecured creditors. After the bar date for filing claims had passed, the Trustee determined that a large unsecured creditor failed to file a claim. Consequently, the debtor was required to pay 100% of the filed claims. The issue before the court was whether the debtor also had to pay interest on those claims. The court found that the debtor was required to pay interest on those claims pursuant to 11 U.S.C. § 1325(a)(4).

In re Davis, Case No. 06-40082 (Bankr. W.D.N.C. May 3, 2006)(Hodges) - This matter came before the court upon the Objection to Confirmation of Plan/Valuation of Secured Claim of Ford Motor Credit Company ("FMCC"). The debtors purchased a vehicle from FMCC within 910 days of the bankruptcy filing. The debtors had originally leased the vehicle from FMCC, and the original lease date was outside the 910 days of 11 U.S.C. § 1325(a)(9). Because the original lease date was outside of the 910 days, the debtors' Plan crammed down the value of the vehicle. The court sustained the objection of FMCC on the basis that the debtors signed a new contract with FMCC within 910 days of the bankruptcy filing, and the contract was a new and separate transaction from the debtors' prior lease with FMCC. Accordingly, the debtors' Plan was to include a fully secured claim for FMCC at the Till rate of interest.

In re Springs, Case No. 06-40192 (Bankr. W.D.N.C. July 11, 2006)(Hodges) - The Trustee objected to confirmation of the debtor's Chapter 13 Plan because it failed to provide for any pre-confirmation adequate protection payments for 910- and 365-day personal property claims under 11 U.S.C. § 1325(a)(9). The court agreed with and adopted the reasoning of Judge Leonard in In re Brooks, Case No. 05-10644-8-JRL (Bankr. E.D.N.C. June 9, 2006). Consistent with that case, the court held that a 910- or 365-day claim may be an allowed secured claim. Thus, the debtor's plan must provide for pre-confirmation adequate protection payments for 910- and 365-day claims pursuant to 11 U.S.C. § 1326(a)(1)(C). Accordingly, the court sustained the Trustee's Objection to Confirmation.

In re Robinette, Case No. 06-30334 (Bankr. W.D.N.C. June 28, 2006)(Wooten) - Sharonview objected to confirmation of the debtors' Chapter 13 plan because it failed to provide for full payment of the remaining balance due under a contract for the sale of a vehicle to the debtors that was entered into within the 910 days preceding the filing of the petition. This court agreed with and adopted the reasoning of Judge Leonard in In re Brooks, Case No. 05-10644-8-JRL (Bankr. E.D.N.C. June 9, 2006) and Judge Carruthers in In re Shaw, Case No. 05-84059 (Bankr. M.D.N.C. May 11, 2006), and held that the debtors' plan must provide for payment in full of Sharonview's secured claim with interest calculated at the Trustee's Formula Rate. Accordingly, the court sustained Sharonview's Objection to Confirmation.

Lynch v. Tate (In re Lynch), 299 B.R. 776 (W.D.N.C. 2003) - This matter came before the District Court on the appeal of the Bankruptcy Court's order denying confirmation. The District Court held that the Bankruptcy Court did not clearly err in finding that the $567 per month which the debtors had budgeted as a tuition expense was not a "reasonably necessary" expense, and precluded the court from confirming the debtors' plan as not satisfying the "disposable income" requirement.

IN RE LEONARD, Case No. 99-50919 (Bankr. W.D.N.C. October 25, 2000)(Whitley) - The Associates held a partially secured claim on a dump truck being paid through the Chapter 13 plan. The debtor was unable to maintain her payments and the vehicle was surrendered. The debtor then moved to strike the claims subject to Associates' ability to refile for an unsecured deficiency after sale of the collateral. Associates objected on the grounds that its secured claim could not be reclassified under the res judicata effect of s 1327(a), and that any deficiency therefore had to remain a secured claim. However, the Court held that Associates retained an unsecured definciency only. The creditor could not rely on s 1327 in isolation, when other Code sections such as 1329 and 502 place limitations on the res judicata effect of a confirmed plan. Further, under In re Rash, 520 U.S. 953 (1997), unlitigated valuation issues arose when the collateral was surrendered. Had the debtor shown a lack of good faith in proposing to modify the plan, as prohibited by ss 1325(a) and 1329(b), a different result would have obtained, but no bad faith was evident in this situation.

IN RE CURTIS JEFFERSON, JR., Case No. 98-31358 (Bankr. W.D.N.C., September 22, 1998)(Hodges) - The court sustained Lysa Jefferson's objection to the confirmation of debtor's proposed Chapter 13 plan and denied confirmation of the debtor's plan. Specifically, the court held that the circumstances under which the debtor had filed his Chapter 13 case violated 11 U.S.C. § 1325(a)(3) which requires that a Chapter 13 plan be "proposed in good faith and not by any means forbidden by law." The court relied on In re Rasmussen, 888 F.2d 703(10th Cir. 1989);Neufeld v. Freeman, 794 F.2d 149 (4th Cir. 1986); and Deans v. O'Donnell, 692 F.2d 968 (4th Cir. 1982) in determining that the debtor's plan had not been proposed in good faith.

IN RE BARTLEY, Case No. 96-30487 (Bankr. W.D.N.C., June 24, 1996)(J. Whitley) - The Court sustained a creditor's objection to the Chapter 13 debtors' plan, which was filed after the debtors' receipt of a Chapter 7 discharge, based on the debtors' failure to satisfy the "good faith" requirement of 11 U.S.C. 1325(a)(3). In the Chapter 7 case, the creditor's claim was found to be non-dischargeable under 11 U.S.C. 523(a)(2) because it was incurred by fraudulent conduct on the part of the debtors. The debtors' Chapter 13 plan proposed a minimal payout on this claim and one other claim that was a debt reaffirmed in the Chapter 7 case but on which no payments had been made. The Court reviewed a list of factors germane to the question of "good faith", as set forth in the Fourth Circuit Court of Appeals decision in Deans v. O'Donnell, 692 F.2d 968 (4^th Cir. 1982). The Bankruptcy Court based its finding of lack of "good faith" on the debtors' repeat filing in the absence of changed circumstances, the obvious purpose of the re-filing was to deal with a non-dischargeable debt and alter the terms of a reaffirmed debt, and the debtors' Chapter 13 plan proposed a minimal payout over a period less than the statutory maximum term for a Chapter 13 plan.

IN RE CORNETT, Case No. 95-50756 (Bankr. W.D.N.C., March 27, 1996)(J. Whitley) - The Chapter 13 debtors made only one payment on their automobile loan and filed their petition less than sixty days after their first payment was due. The lender objected to confirmation of the debtors' Chapter 13 plan alleging that their actions and their attempt to "strip down" the lender's claim was an indication of objective bad faith. The Court agreed with the lender and confirmed the Chapter 13 plan after the debtors agreed to lift the automatic stay and allow repossession of the automobile.

IN RE COOK, Case No. 95-31953 (Bankr. W.D.N.C. 1996) - The Chapter 13 debtors filed their petition after having made only one payment on their new car loan. The Court denied confirmation of their Chapter 13 plan based on the general good faith requirement of 11 U.S.C. 1325(a)(3) and the Court's equity powers under 11 U.S.C. 105. The Court held that in cases where a debtor is attempting to retain a nearly new vehicle after only making one payment on a contract, which the debtor entered into freely, the contract price is the best evidence of the value of the collateral, not the N.A.D.A. guidelines.

IN RE TENOR, Case No. 95-50571 (Bankr. W.D.N.C., Dec. 8, 1995) - Monies garnished by an employer from a Chapter 13 debtor's paycheck to repay a loan owed to the debtor's ERISA qualified retirement plan constitute "disposable income" under 11 U.S.C. 1325(b), and the monies must be applied to his Chapter 13 plan payments.

IN RE BOUCHARD, Case No. 94-10457 (Bankr. W.D.N.C., Feb. 6, 1995)(J. Hodges) - The court denied a secured creditor's objection to confirmation of a Chapter 13 plan based on an argument that the plan did not satisfy the requirements set forth in 11 U.S.C. 1325 and 365 with regard to an installment sale contract for the purchase of a truck. The court held that several "last payment options" in the contract did not make the sales contract an executory contract. Regardless of the fact that the creditor had a duty to either repurchase the truck from the debtor or refinance the remaining balance owed, the entire transaction corresponded with the situation found in a typical secured sale agreement. IN RE ANTLEY, Case No. 93-30807 (Bankr. W.D.N.C., Aug. 20, 1993)(J. Hodges) - A Chapter 13 debtor does not have a right to cure and reinstate a mortgage debt in a Chapter 13 Plan after the real property has been sold at foreclosure if the Chapter 13 petition is filed during the upset bid period. Note: Section 301 of the Bankruptcy Reform Act of 1994 permits a debtor to cure a mortgage default until the completion of a foreclosure sale under state law. In re Stitt (see above) more accurately represents the court's current opinion concerning this issue.

IN RE PECK, Case No. 92-32048 (Bankr. W.D.N.C., May 3, 1993)(J. Hodges) - Pursuant to 11 U.S.C. 506(b), a creditor can include in its allowed secured claim interest at the contract rate that accrues from the filing date through the confirmation of the debtor's plan. Post-confirmation interest on secured claims is permitted by 11 U.S.C. 1325(a)(5)(B)(ii). Secured creditors are entitled to interest on their claims throughout the debtor's proposed plan. The interest rate should be the market rate for the creditor's cost of borrowing funds in the open market. The Chapter 13 Trustee should determine an appropriate rate, and that rate shall serve as a rebuttable presumption of the market rate.

IN RE BAILEY, Case No. 91-10343 (Bankr. W.D.N.C., Aug. 18, 1993)(J. Hodges) - A Chapter 13 debtor's objection to a deficiency claim of a secured creditor after the sale of the collateral was disallowed because the value of the collateral at disposition (which is usually a wholesale value) is the basis for the determination of the unsecured, deficiency claim, not a retail value that was previously placed on the collateral at a relief from stay hearing for adequate protection purposes.

IN RE FRADY, 141 B.R. 600 (Bankr. W.D.N.C. 1991) - Where rental agreements were true leases under the North Carolina Uniform Commercial Code, and not disguised sales, the Court can not confirm a Chapter 13 plan which treats such true leases as disguised sales by listing the lessor as a secured creditor and proposing re-amortized payments of the indebtedness over the term of the plan, rather than either rejecting the leases (executory contracts) or accepting them according to their terms and bringing the leases current, as required by 11 U.S.C. 365.

IN RE FOSTER, Case No. C-B-90-31306 (Bankr. W.D.N.C., Dec. 12, 1990)(J. Hodges) - This Chapter 13 proceeding was the debtor's sixth bankruptcy filing and her fourth in the past two years. The debtor paid nothing to creditors in any of the four bankruptcies filed during the past two years. In the three months that this Chapter 13 case had been pending, the debtor had made no payment to the Chapter 13 Trustee. Two creditors filed objections to confirmation, motions for dismissal, and motions for relief from stay. The court sustained the objections to confirmation and denied confirmation for several reasons, including the debtor's failure to satisfy the requirements of both 11 U.S.C. 1325(a)(3) and 11 U.S.C. 1325(a)(5), the plan's proposed eighty-month duration, and the plan's failure to use the debtor's purported disposable income to pay her debts. The court also found that this filing represented an abusive serial bankruptcy filing intended to frustrate creditors' efforts to enforce their rights, rather than to reorganize the debtor by (at least partial) payment of her debts. Because of the abusive nature of the filing, the court dismissed the Chapter 13 proceeding and enjoined the debtor from further abusing the bankruptcy process. The court also found sufficient cause to grant relief from the automatic stay because of the debtor's failure to make any payments to her creditors in the two years preceding this petition. The court also concluded that because of the debtor's history of abusing the purpose of bankruptcy, the creditors should be granted prospective relief from stay in any bankruptcy case that the debtor may file in the future.

IN RE VORE, Case No. A-B-86-10331 (Bankr. W.D.N.C., July 10, 1990)(J. Wooten) - In an agreed order, the court granted the Chapter 13 Trustee's motion to apply the debtor's $27,000 inheritance to the plan because it was property of the estate under 11 U.S.C. 1301(a)(1), and under the Chapter 7 analysis required in 11 U.S.C. 1325(a)(4) the debtor's unsecured creditors were entitled to be paid 80% of their claims. The inheritance was received more than four years after confirmation of the plan that had originally provided for a payout to unsecured creditors of approximately 35%.

IN RE WOODS, Case No. A-B-88-10006 (Bankr. W.D.N.C., July 1990) - The court granted the Chapter 13 Trustee's motion to modify plan under 11 U.S.C. 1325(a)(4) to allow the Trustee to provide for distribution of the debtor's retirement benefits, which were received post-petition, to his creditors. The court held that the debtor was entitled to claim his exemption under 11 U.S.C. 522(f) and N.C.G.S. 1C-1601(a)(2), but that the remaining funds would have to go the Trustee, and the pro-rata distribution to unsecured creditors would be re-evaluated in light of the after-acquired asset.

IN RE HUGHES, Case No. C-B-89-31301 (Bankr. W.D.N.C., Jan. 26, 1990)(J. Hodges) - The Chapter 13 Trustee objected to confirmation of the debtors' plan pursuant to 11 U.S.C. 1325(a)(4) on the grounds that unsecured creditors would receive more in a Chapter 7 liquidation. The debtors had filed a joint petition with schedules indicating $51,000 of equity in their residence owned as tenancies-by-the-entireties. The debtors sought to preserve this equity by filing under Chapter 13 and paying all joint creditors in full, but proposing less than a 1% payout to unsecured creditors under their plan. The trustee contended that if the case were proceeding under Chapter 7, the debtors' residence would be sold and all creditors paid in full. The court agreed with the Trustee's contentions and denied confirmation primarily because under state law the debtors' joint creditors could have forced a sale of the residence, and the proceeds would then have been available for the claims of all creditors. Therefore, bankruptcy provided no greater rights to creditors than did state law.