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Case Law Topics
The "best interest of creditors test" of § 1325(a)(4) -- also informally known as "the liquidation test" -- requires that unsecured creditors in a Chapter 13 case be paid at least as much through confirmation of a proposed Chapter 13 plan as they would receive if the debtor's case were liquidated under Chapter 7 of the Bankruptcy Code.
It is important to remember that number is not arrived at simply by adding up the value of the property; you are also allowed to reduce that amount by the administrative costs of selling the item, etc. to arrive at the true amount that unsecured creditors would get in a Chapter 7 case.
The new law can pose a catch 22 for debtors if the means test forces them into Chapter 13 although their actual disposable income is inadequate to fund a Chapter 13 plan. Some courts have held that this Catch 22 is avoided by ruling that the Chapter 7 means test is not applicable to cases "Filed under" chapter 13 and then converted to Chapter 7
For converted cases, the case law appears to agree that the six-month income measurement period is based on the date of the filing of the original petition: conversion does not reset that date.
Cases about the procedure required to strip liens on over-secured property.
U.S. Supreme court finally resolves this question choosing to follow the line of cases started by In re Nowlin (type C) in this outline.
Held: When a bankruptcy court calculates a debtor's projected disposable income, the court may account for changes in the debtor's income or expenses that are known or virtually certain at the time of confirmation.
Throughout its discussion the court seemed to agree with the "Type C" cases listed here that use form 22C as the standard for what expenses are and are not allowed, but these amounts can be adjusted if changes in the debtor's income or expenses "are known or virtually certain at the time of confirmation." Note that's a pretty high bar.
Note also that the court says you should keep the formula from Form 22C but adjust it based on facts. It does not say to throw out 22C and rely on Schedules I and J.
The 2005 bankruptcy amendments added a "hanging paragraph" (that is, doesn't have a separate subsection like all paragraphs should) to section 1325(a) that says that you cannot cramdown an purchase-money auto loan that was obtained less than 910 days
The question is whether when a debtor turns in a car for a trade in, whether the part of the new car loan that is meant to pay off the balance on an old car loan in included in the amount that is by the no-cramdown protection of 1325(a)
It is neither "all or part of the price" of a new car nor is it "value given to enable the debtor to acquire rights in or the use of" a new car
The issues argued in these cases are whether the hanging paragraph allows a debtor to surrender a 910 vehicle in full satisfaction of his debt. If not, then, "the remaining debt must be treated as an unsecured claim in the Chapter 13 plan. Although the debt "need not be paid in full, any more than [the debtors] other unsecured debts,  it [cannot] be written off in toto while other unsecured creditors are paid some fraction of their entitlements." In re Miller