Bankruptcy by Keyword:
910 loans .
910 loans .
car loans .
Definitions from the USDOJ
- equity: The value of a debtor's interest in property that remains after liens and other creditors' interests are considered. (Example: If a house valued at $100,000 is subject to a $80,000 mortgage, there is $20,000 of equity.)
- lien: The right to take and hold or sell the property of a debtor as security or payment for a debt or duty.
- secured creditor: A creditor holding a claim against the debtor who has the right to take and hold or sell certain property of the debtor in satisfaction of some or all of the claim.
- secured debt: Debt backed by a mortgage, pledge of collateral, or other lien; debt for which the creditor has the right to pursue specific pledged property upon default. Examples include home mortgages, auto loans and tax liens.
- statement of intention: A declaration made by a chapter 7 debtor concerning plans for dealing with consumer debts that are secured by property of the estate.
- unsecured claim: A claim or debt for which a creditor holds no special assurance of payment, such as a mortgage or lien; a debt for which credit was extended based solely upon the creditor's assessment of the debtor's future ability to pay.
Case Law Topics
The Supreme Court ruled in January 2011, that the Means Test Vehicle Ownership allowance is contingent on existence of loan or lease obligation. In other words, if you own a vehicle "free and clear" and are not making any payments, you cannot claim the ownership deduction. (Ransom v. FIA Card Services, __ U.S. ___ (S.Ct 2011 ) )
Before the Supreme Court settled the issue, lower courts were split on this question.
Note that lower court cases that deny the allowance often mention that debtors can claim a $200 extra operation deduction for vehicles over six years old with more than 75K miles (based on the IRS practice of doing the same).
Cases that deal with the effect of undersecured 2nd mortgages on plan payments and correct procedures to strip them.
Cases about the procedure required to strip liens on over-secured property.
Before the passage of BAPCPA, the Supreme Court in Till ruled that a bankruptcy court could and must reset the interest rate on contractual secured debts to an interest rate based on the prime rate, rather than the contract rate of interest.
That rule survives BAPCPA but there was some question of whether this rule was applicable to so-called "910 loans" (for cars acquired less than 910 days ago). Most courts say yes, Till applies to those loans.
Generally this practice is not allowed in Chapter 7 -- only in Chapter 13. The Supreme Court in Dewsnup v. Timm in 1992 prohibited the practice of using 506(d) to strip a partially secured lein. But a few rare cases, most notably the 11th Circuit, have recently held that Dewsnup does not apply to cases of wholly unsecured liens, and has held that prior precedent allowing elimination of such liens is still controlling precedent in the 11th circuit. .