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Ch. 13 Principal Residence--Claim Modification /Till
Dear Mark,
Section 1322(c)(2) is, of course, designed to cover your clients situation. It says that your client can modify pursuant to section 1325(a)(5). Since Tills explicit focus is on the application of 1325(a)(5)(B), your client should be able to do the desired modification using a Till interest rate. I see nothing in either 1322(c)(2) or 1325(a)(5)(B) that prohibits the stretching out of the payments to the full five years.
Indeed, the Court in In re Jones, 188 B.R. 281, 284 (Bankr. D. Ore. 1995) held:
This court concludes that the Seidel holding has been overruled by the language of 1322(c)(2). However, the debtor will be required to provide for full payment of the obligation during the life of the plan, which may not extend beyond five years.
See also In Re Guerrero, 536 B.R. 817, 826 (Bankr. E.D. Wisc. 2015): age debt that matured before or during a bankruptcy by making full payment of the debt over the life of the Chapter 13 Plan.
All the best,
Nick
Nicholas Gebelt
Nicholas Gebelt, Ph.D., J.D.
Attorney at Law
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Facts: Creditor secured by debtor's principal residence (2nd TD).
Loan due in full during plan term.
Plan seeks to modify the claim by paying the claim in
full over 5 years, but reducing the interest rate to what appears to
be a "Till" rate.
Does Till apply under these facts? Can a loan on a principal
residence be modified in this manner?
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Mark J. Markus
Law Office of Mark J. Markus
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web: http://www.bklaw.com/
Certified Bankruptcy Law Specialist--The State Bar of California
Board of Legal Specialization
This Firm is a Qualified Federal Debt Relief Agency
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