Central District Consumer Bankruptcy Attorney's Association

If the debtor is using 506 (Penrod), then the entire negative equity becomes an unsecured claim and arguably no preference...
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On Thursday, February 2, 2017 5:42 AM, "Holly Roark hollyroark22@gmail.com [cdcbaa]" wrote:
Chapter 13 trustee says that car payments made in the 90 days prior to filing are preference payments because there is negative equity in the car. (Negative equity was rolled into new car loan when old car traded in.)
I want to argue that negative equity was paid off prior to the 90 day period, but trustee said payments were applied pro rata. Example: negative equity was $3,000 at time of purchase of new car; car payments $400/month, negative equity paid off in 7.5 months. Filed BK 5 months later. Trustee says no. If secured portion was $10,000, and negative equity was $3,000, then $400/month allocated 30% to negative equity and 70% to secured portion. $3,000/$10,000 30% This means that $360 was a preference. Is there a rule on this?
Holly RoarkCertified Bankruptcy Specialist*
and Sports Lawyer
holly@roarklawoffices.com**primary email address**www.roarklawoffices.comCentral District of California & District of Idaho - Consumer Bankruptcy Attorney1875 Century Park East, Suite 600 Los Angeles, CA 90067T (310) 553-2600; F (310) 553-2601*By State Bar of California Board of LegalSpecialization

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