Creditor Gets Deficiency Claim After Collateral Surrender

10th CIRCUIT ‘RULES’
In re Rule, Case No. 06-22145
July, 2008, Judge Berger

Judge Berger followed In re Ballard 526 F. 3d 634 (10th Cir. 2008), in finding that a 910 car loan may have a deficiency balance after sale of the vehicle.

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.

SURRENDER IN FULL SATISFACTION ALLOWED IN 910 CASE
In re Quick, Case No. 07-21791
February 2008. Judge Somers

Debtors’ plan proposed to surrender a 910 auto in full satisfaction of the debt. Judge Somers noted that this unsettled issue under 1325(a)(9). The Court followed the BAP case, In re Quick (not the same debtor), while recognizing that the decision is not binding. The BAP decision in In re Quick (a/k/a In re Ballard) has been since been reversed by the 10th Circuit Court of Appeals.

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.