910 Car Claims Get Interest

SURRENDER IN FULL SATISFACTION OF 910 AND PAYMENT IN FULL
WITH NOT INTEREST NOT ALLOWED
In re McClay, Case No. 07-20106
October 2008, Judge Berger

910 vehicle case. Plan provided for payment of full debt with no interest and option to surrender in full satisfaction. This was found to be an attempt to modify prospectively and Court opined that 1329 would have to be used. Court followed 10th Cir. In re Jones, 530 F3d 1284, (10th Cir. 2008). Debtor must pay interest. In re Ballard, 526 F3d 634 (10th Cir. 2008) holds that deficiency must be provided for if vehicle is surrendered.

910 CAR LOANS GET DISCOUNT RATE
In re Thomas, et al, Case No 06-21363
August 2007, Judge Somers

Judge Somers ruled that 910 car loans get discount rate, following the BAP decision in Wilson and Judge Robinson in Citifinancial Auto.

TILL RATE FOR 910 CREDITORS BUT NO NEGATIVE EQUITY
In re Smith, 06-20508, Judge Berger
November 2006
Also see Citifinancial Auto v. Hernandez-Simpson
369 B.R. 36 (D. Kan.) Judge Robinson

Judge Berger ruled “no interest” to 910 creditors. Judge Robinson reversed on appeal but affirmed that negative equity is not part of the 910 allowed claim. Cases (5 of them) have been remanded.

ZERO INTEREST RATE TO 910 CREDITOR REVERSED BY BAP
In re Wilson, Case No 06-20075, BAP KS-06-126
August 2007, Judge Berger

The BAP decision carefully analyzes the minority and majority views on whether 910 vehicle loans do or do not get interest and sides with the majority. (Question: is this decision binding on any or all of the judges [except in this case] or merely persuasive until we have circuit level authority.?)

NO INTEREST TO 910 CAR CREDITOR
In re Kinsey, Case No. 06-20921
May 2007, Judge Berger

This is “Wampler revisited.” Judge Berger reasons his way through 1325 and 506 to conclude that 910 vehicle claims do not get interest. This case has been appealed. The BAP has approved certification direct to the 10th Circuit, and petition for direct appeal is pending.

910 CARS GET TILL RATE. CLAIMS LIMITED TO PMSI PORTION
In re Vega, Case No. 06-40010
June 2006, Judge Karlin

Plan must provide secured creditors with a treatment that creditor has agreed to accept, surrender of collateral or provide for retention of lien by providing stream of payments equal to amount of secured claim. “Till” rate applies to 910 car loans as no changes were made to 1325(a)(5)(B)(ii). Creditor’s claim is limited to the PMSI portion of its claim in order to be accorded 910 status.

910 CAR CREDITORS DON’T GET INTEREST
In re Wampler, Case No. 05-27659
June 2006, Judge Berger

In a 910 car loan case, the Court determined that 910 vehicle loan creditors are not entitled to interest since 506 does not apply, by the very terms of 1325 “hanging paragraph”. The lien will not be released until payment of the allowed claim. (Case was appealed, but later dismissed, as debtor surrendered vehicle.)

Digests by:  Jan Hamilton, Trustee

About Jill Michaux

Jill Michaux is a Kansas bankruptcy attorney. She can be found on Google+. She and her partner, Mark Neis, are Topeka's only board certified consumer bankruptcy law specialists.