477 B.R. 736
Bankr. E.D. Wis.2012Background
- Adversary seeks to determine if Citizens Bank’s deficiency from a repossessed travel trailer is nondischargeable under 11 U.S.C. § 1328(c)(1).
- Debtors signed a purchase money installment sale for a 2004 travel trailer ($31,682) assigned to Citizens Bank.
- Debtors filed Chapter 7, briefly reaffirmed, then withdrew the reaffirmation and converted to Chapter 13.
- Confirmed plan (Feb 20, 2007) provided for continuing payment of the contract directly to Citizens Bank at $235/month and treated unsecured claims in a general unsecured class.
- Final plan payment extended beyond the 60-month plan; the trailer was sold post-stay relief for $15,000, leaving a deficiency of $15,575.27; discharge entered March 9, 2012.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1328(c)(1) nondischargeability applies. | Citizens argues the deficiency is provided for under §1322(b)(5) and thus nondischargeable. | Debtors’ plan did not include a cure provision under §1322(b)(5); cure/maintenance not provided. | No; §1328(c)(1) does not apply. |
Key Cases Cited
- In re Lasica, 294 B.R. 718 (Bankr. N.D. Ill. 2003) (sanctity of confirmation orders; binding effect on creditors)
- In re Harvey, 213 F.3d 318 (7th Cir. 2000) (plan confirmation binding; cannot revisit confirmed plan)
- In re Chappell, 984 F.2d 775 (7th Cir. 1993) (affirming strong plan-confirmation policy)
- In re Pence, 905 F.2d 1107 (7th Cir. 1990) (similar confirmation principles in Seventh Circuit)
- Adair v. Sherman, 230 F.3d 890 (7th Cir. 2000) (respect for confirmed plan and non-reopening exceptions)
- In re Faraca, 17 B.R. 824 (Bankr. D. Idaho 1982) (early authority on treatment of long-term debts in plans)