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bapcpa cases (cramdowns)

In re Vagi, Sr. 351 B.R. 881 (Bkrtcy.N.D.Ohio 2006) (Woods, Bankruptcy J.)
anti-bifurcation provision of BAPCPA prevents cramdown of car purchased for non-debtor spouse

debtor not permitted to cram down debt in chapter 13 plan — court holds auto purchased for use of debtor’s non-filing spouse was still effectively purchased for personal use.


In re Hill, 352 B.R. 69 (Bkrtcy.W.D.La. 2006) (Schiff, Bankruptcy J.)
debt related to truck purchased for personal use could not be crammed down regardless of change in use debtor purchased truck for personal use, placing it within anti-cramdown provisions of PMSI “910” claim. the vehicle was later used by debtor’s wife to drive to and from work. debtor argued that this removed the truck from the “personal use” category, permitting cramdown. court ruled that while some personal is permitted, under totality of circumstances test the vehicle had to be deemed purchased for personal use.

In re Trejos, 352 B.R. 249(Bkrtcy.D.Nev. 2006) (Markell, Bankruptcy J.)
in cramdown situation creditor retains a secured claim despite inapplicability of sec. 506
A PMSI “910” debt was bifurcated in a chapter 13 cramdown. The code provides that in such cases section 506, providing for treatment of allowed secured claims, does not apply. Debtor argued that this resulted in the portion attaching to the collateral was not a secured claim, and if secured was not entitled to interest in the plan. The court, acknowledging that this is the position taken by Collier (8 Collier on Bankruptcy, 1325.06(1)(a), Henry Sommer, Alan Resnick, eds.) nevertheless rejected this argument and held that the claim was a secured claim, citing the definition of a lien under 11 U.S.C. § 101(37), and based on constitutional grounds prohibiting taking of property without just compensation.


In re Murray, 352 B.R. 340(Bkrtcy.M.D.Ga. 2006)

Even though some of the money advanced for the purchase of the vehicle included a non-purchase portion to pay for extended service contract, entire claim was treated as a purchase-money-security-interest in cramdown situation. The court found the money for the service contract and other non-purchase peripheral fees were “inextricably related” to the purchase of the vehicle.


In re Hinson, 352 B.R. 48 (Bkrtcy.E.D.N.C. 2006). § 524(c), § 521(a)(6), (d), § 362(h)(1), (2)

Debtor timely filed statement of intention electing to reaffirm the contract on her motor vehicle, on the same terms and conditions as set forth in the contract. Creditor”s version of reaffirmation agreement required debtor to pay creditor”s attorney”s fees for dealing with the reaffirmation agreement. Debtor refused to sign it.

The court held debtor was not liable for attorney”s fees, and that creditor should have offered agreement without demand for attorney”s fees. “Section 362(h)(1)(B) states that offering to reaffirm on the original terms of the contract is sufficient.” The court also ruled that in order to enforce an ipso facto clause the debtor must have been found to fail to satisfy certain Code provisions, which was not the case here.

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