Larry Hurlburt v. Juliet Black, 925 F.3d 154

In 2004 Hurlburt bought a home financed by seller Black with a $131,000 note secured by a deed of trust; loan included balloon/acceleration features and Hurlburt used the property as his principal residence.
Hurlburt later defaulted; valued the property at $40,000 and filed Chapter 13 in 2016, staying Black’s foreclosure and objecting to Black’s proof of claim.
Black filed claims (initially allocating a portion as unsecured, later amending to a larger total claim); bankruptcy court found the deed of trust valid.
Hurlburt proposed a Chapter 13 plan that would treat only about $41,132 of Black’s claim as secured (based on collateral value) and treat the remainder as unsecured (i.e., bifurcate and cram down the unsecured portion).
Bankruptcy and district courts rejected the plan, relying on Fourth Circuit precedent In re Witt, which held § 1322(c)(2) allows only modification of payment timing, not bifurcation/cram down of undersecured homestead mortgages.
The Fourth Circuit (en banc) overruled Witt, holding § 1322(c)(2) permits modification of claims (including bifurcation and cram down) where the mortgage’s last contractual payment is due before the plan’s final payment.

Issue	Plaintiff's Argument (Hurlburt)	Defendant's Argument (Black)	Held
Whether 11 U.S.C. § 1322(c)(2) authorizes bifurcation and cram down of undersecured claims secured only by a debtor’s principal residence when the loan’s last payment is due before plan completion	§1322(c)(2) is an exception to §1322(b)(2) and, read with §1325(a)(5) and §506(a), allows modifying claims (bifurcation + cram down)	Witt and Black: §1322(c)(2) only permits modifying payment timing/schedule, not the creditor’s substantive claim (principal/rights)	The en banc Fourth Circuit reverses Witt and holds §1322(c)(2) authorizes modification of claims, including bifurcation and cram down, for qualifying homestead mortgages.

Witt v. United Cos. Lending Corp. , 113 F.3d 508 (4th Cir. 1997) (earlier Fourth Circuit holding that §1322(c)(2) permits only payment-schedule modification)
Am. Gen. Fin., Inc. v. Paschen (In re Paschen) , 296 F.3d 1203 (11th Cir. 2002) (construing §1322(c)(2) to permit claim modification including stripdown)
First Union Mortg. Corp. v. Eubanks (In re Eubanks) , 219 B.R. 468 (B.A.P. 6th Cir. 1998) (same conclusion on §1322(c)(2))
Nobelman v. American Savings Bank , 508 U.S. 324 (1993) (held §1322(b)(2) bars using §506(a) to reduce undersecured homestead mortgages)
Assocs. Comm. Corp. v. Rash , 520 U.S. 953 (1997) (explaining §1325(a)(5)(B) cramdown mechanics)
United States v. Ron Pair Enters., Inc. , 489 U.S. 235 (1989) (§506(a) bifurcates secured vs unsecured claim based on collateral value)
Till v. SCS Credit Corp. , 541 U.S. 465 (2004) (referring to §1325(a)(5)(B) as the cramdown provision)