In Re Stone
On October 22, 1984, the Debtors filed their Petition for Relief under Chapter 13 of Title 11 of the United States Code. On November 28, 1984, GENERAL MOTORS ACCEPTANCE CORPORATION (“GMAC”) filed a Proof of Claim in the amount of Five Thоusand, One Hundred Thirteen & 74/100 Dollars ($5,113.74), which amount was fully secured by a lien on a 1980 Buick LeSabre. On the same date, the Debtors filed an Amended Plan which was subsequently сonfirmed on December 11, 1984.
In September 1985, as a result of medical exigencies, the Debtors found it necessary to modify their Plan in order to reduce their monthly payments and extend the term of the Plan. On October 18, 1985, the modified Plan was confirmed by this Court and GMAC subsequently filed a supplemental claim for additional interest in the amount of Three Hundred Sixty-Five & 37/100 Dollars ($365.37).
In July 1987, Mrs. Stone died. The surviving debtor, Mr. Stone, moved to amend the Plan in order to provide for reduced payments аnd abandonment of the vehicle upon which GMAC held its lien, which the Court approved on August 25, 1987. The Debtor evidently abandoned the vehicle in August, 1987, but failed to notify GMAC of its abandonment. It was not until February 1988 that the vehicle was sold at public auction. GMAC ultimately realized Seven Hundred Seventy-Eight & 50/100 Dollars ($778.50) from the sale of thе vehicle, which leaves an as-yet undetermined deficiency owing to GMAC from the Debtor. GMAC now asserts that the deficiency amount ought to be paid as a secured claim, even though the collateral supporting GMAC’s lien position has been liquidated. The Trustee contends that such treatment would be improper. A hearing was held on June 30, 1988.
The Court begins with the premise that a secured claim by definition requires collateral to secure the crеditor’s right to payment.
In re Byrd,
A claim paid the amount it would receive if secured, but without access to underlying collateral, would simply be an unsecured сlaim paid on a priority basis outside the statutory priority scheme. By definition, ‘secured claim’ requires availability of collateral to securе the creditor’s right to payment. ‘The obvious fallacy of creditor’s position is that it is not able in any way to look to the collateral assigned to it for repayment of its debt irrespective of any position taken by the debtor.’ [citations omitted].
In re Elliott,
GMAC argues that confirmation of the Plan prohibits rеclassification of a secured party’s claim pursuant to 11 U.S.C. See. 1327(a). Indeed, GMAC’s position appears to have been accepted by the courts in
In re Abercrombie,
a) The provisions of a confirmed plan bind the debtor аnd each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected tо, has accepted, or has rejected the plan.
It is upon this Section that GMAC bases its argument that “confirmation of the Plan forbids a reduction аnd reclassification of a secured claim.”
In re Abercrombie,
(a) At any time after confirmation of the plan ..., the plan may be modified, upon request of the debtor, ... to—
(1) increase or reduce the amount of payments on claims of a particular class provided for by the plan;
(2) extend or reduce the time for such payments; or
(3) alter the amount of the distribution to a creditor whose claim is provided for by the plan, to the extent necessary to take account of any payment оf such claim other than under the Plan.
(b)(1) Sections 1322(a), 1322(b), and 1323(c) of this Title and the requirements of Sec. 1325(a) of this Title apply to any modification under subseсtion (a) of this Section.
(2) The plan as modified becomes the plan unless, after notice and a hearing, such modification is disapproved.
Initiаlly, it should be noted that a confirmed Plan does not unalterably and permanently define the rights and obligations of the parties involved.
Of course, a post-confirmation modification which changes the rights of a holdеr of an allowed secured claim provided for by the modified plan must either be accepted by the holder, relinquish the collateral to thе holder, or contain a cram down provision meeting the requirements of section 1325(a)(5)(B). •
Id.
at 1329-7. In the present case, the Debtor surrendered the сollateral to GMAC. Thus, this Court finds that a debt- or is expressly authorized under
This conclusion is supported by other factors as well.
Accordingly, GMAC’s claim for deficiency against the Debtor shall be deemed to be an unsecured claim. GMAC also requested, in the event that the Court rulеd as it has, that the Debtor be required to pay those payments on the creditor’s claim which accrued prior to the creditor receiving its сollateral. Apparently, the debtor failed to advise GMAC of its abandonment of the vehicle. As a result, GMAC was prejudiced by suffering further depreciation of its collateral and losing the time value of money which it would have received on an earlier auction of the Debtor’s collatеral. Therefore, GMAC shall be allowed an additional unsecured claim for payments due the movant which accrued prior to GMAC’s recovery оf the collateral.
This Memorandum Opinion shall constitute the Court’s findings of facts and conclusions of law pursuant to Bankruptcy Rule 7052.
An appropriate Order will be entered.
ORDER
This matter comes bеfore the Court on the Motion by GENERAL MOTORS ACCEPTANCE CORPORATION (“GMAC”) in which it. seeks an Order of the Court finding that the deficiency amount owing to GMAC from the Debtor ought to be paid as a secured claim, even though the collateral supporting GMAC’s lien position has been liquidated. In the alternative, GMAC re
IT IS SO ORDERED.