bankruptcy and feb eighteenth two thousand and nine her plan was confirmed on may thirty first two thousand and ten duke's plan provided for suncoast to pay adequate protection payments directly by the daughter and son goes claim was provided in the secured creditors class to retain their lien jukes received her discharge by march twenty ninth two thousand and twelve duke's plan did not treat suncoast under thirteen twenty two b five or thirteen twenty two b two there is no requirement under the code for the case law that a plant has to modify a right of a secured credit or in order to receive a discharge arbor in persona my ability under thirteen twenty eight creditors rights in this case scuse me creditors rights in this case have not been modified nor affected by this plan a in order to provide for a plan i'm sorry in order to provide for a debt or claim that all is required is that that debt creditor is mentioned dealt with or referred to in the debtor's plan either it was clearly dealt with in the plan and doc threw the plan here the argue argument to me commonsense wise is a little odd you've got her going through a plan where she's paying about five thousand dollars to other creditors and that's to be taking care of with a discharge she has one hundred fifty thousand dollars and a lot on her mortgage which is not paid at all through the plan she's paying that directly to the holder of the mortgage and your argument is by going through bankruptcy paying off some other cr s thousand dollars she's home for a on this and there are other mortgage that was already been paid through the plan that to me doesn't make good walking around common sense there'd be no difference if the debtor paid the adequate protection through the plan outside the plan directly either by the trustee or directly by the debtor there is no difference than what the creditor would we see in a chapter seven discharge than what was done here in the chapter thirteen discharge the debtor paid the adequate protection payments directly she did not modify the rights of the creditors she received her in person a discharge of her liability which would be the same as if she had surrendered the property she would receive in support in person and liability discharge and junction against collection and no lights would have been modified there is no exception for sancho's debt under thirteen twenty eight and there is no code provision that a debt must be affected by the plan in order to be discharge the concept of affected relates to pre code law that a lien passes through bankruptcy uneffected a bankruptcy discharge extinguish has only one mode of enforcement of a claim namely an action against the liability on these debt was not discharged by the chapter thirteen proceedings and counsel's argument is missing the mark because ms dukes did not file a chapter seven  thirteen she did not make the election under chapter thirteen that she could have in her plan to say here's your property here's your security i'm not going to pay you instead providing for suncoast debt in the plan and therefore that debt would be not discharged because it was not part of the plan but even if you assume that it was thirteen twenty t b to prohibit some modification of long term secured debt when the security is a principal resident of the debtor the bateman court this court in  has made abundantly clear that thirteen twenty two b two precludes the discharge of personal liability on a home mortgage debt absent payment in full in bateman that was a pretty unusual and complicated set of facts and procedural facts that don't really change the ruling as it applies here and then really what the debtor was doing is the classic b five for long term debt where a debtor has a long term debt that matures well after the three to five years that chapter thirteen plan is allowed to be propose and wants to retain the property they want to make their payments under the greed contractual term and so thirteen twenty two b five permits that and debtor make payments maintain payments on that debt and keep their property as long as they make the payments and it gives them that longer term because many debtors can't possibly pay it off if it was outside of the plan they filed a motion getting leave to make those payments directly they signed coast and for some time they did but not even for the life of the plan so  you look at thirteen twenty to be five for long term debt you'll see under the discharge provisions in thirteen twenty eight that that is accepted from discharge thirteen twenty two b two is not accepted from discharge and the district court in the bankruptcy court cited as well have said that when the creditors rights are unaffected which they they can't be modified under thirteen twenty two b two because of the nature of the debt then the y pass through unaffected and the debtor i'm sorry the creditor retains all rights and that would include as the noble man us supreme court cases told us even the right to a deficiency judgment that's part of your and bill of rights the personal liability so even though there's not an expressed exception because of the nature of home mortgage debt it passes through i think the bateman decision  destructive on that point as well your honor because in bateman that creditor was it in a convoluted mess of not protecting its rights and yet at the end even though this court had to say well we're not going to unwind a plan it's been long confirmed etc that creditor retained its full set of rights including the right to pursue a deficiency judgment because thirteen trying to be too does not let a in thirteen twenty two b five with respect to that provisions application mystic's was not into fall isn't that right yes that's correct and i think you're probably pointing to the arguments that have been made in the brief about whether you can use thirteen twenty to be five when the debtor is not in default at the time of filing the plan and there is a split of authority on that but the we believe the greater weight of the authority and the better you can still maintain your payments and if you look at the case and they kind of go into the theory of that and say if the let me tell you the name of the case that has this discussion  sorry it is i but yes the jones case from the eastern district of north carolina and then hunt in rain hunt which is also from the eastern district of north carolina both cited in our brave but what the court explained is that if you used the conjunctive or the district of war you would have the possibility of a debtor coming in and unfairly  maintain payments on the long term debt but not curing the rear and you can't do that you have to if there isn't a rear end you have to do both but so you're reading any as if it says it if if and exactly because if you read it the other way to what she'll have is that the debtors who are really trying hard in not having heard his and coming to court in a better position are not allowed to use this which would be unjust because this is a great tool for most debtors to keep their homes and make these long term debt payments over a twenty or thirty year life of a mortgage instead of a five year life of plan or three year life like in this case so as a policy reason as well you don't want to read it in a way that would say to the debtor who's been trying to maintain their payments and hasn't had a default you can't use it his people manufacturing in default where they you know the month before they file or two months before they file they don't make their payment but that's really bad on their credit record because this is a long term debt and so those kinds of failures of payments get reported whereas if you use the long term debt provision and you keep your you maintain your payments and you ultimately satisfy that loan it's reported  discharged in bankruptcy but as a pretty good performing loan which is good for the debtor so there are a lot of policy reasons why the court in hunter specially talks about this why you want to read it that way and here i think the debtor tries to disavow that that's what they were trying to do but they can't really they either were trying to keep this debt outside of the plan in which case none of this matters it wasn't discharge or they were trying to invoke the maintaining payments to the creditor so they could keep their property and so it in that case it's an express exception they can't modify the debt under thirteen twenty two b so really at the end of all of that discussion we're back to the two courts bankruptcy and district court getting this result right for many different reasons there are other issues in arguments raised in our brief but because counsel did not bring them up during her argument i'm going to rely on the briefs unless the court has any questions for me i think that the argument flows fairly well through th let me ask you just clarify one point did i understand you correctly to say if this was the course that the debtor wanted to follow where she wouldn't be stuck with the arrearages she should have just gone straight chapter seven turned her house over  and you're saying at that point the arrearages would have been part of that the deficiency would have been wiped out for a chapter seven well i think that's an option if you are trying to get rid of personal liability i have to confess to not being  bankruptcy lawyer so i don't really want to make a representation as to what happens in chapter seven and i know i should know that but i don't but what i was saying is that counsel is talking about different you know we're no worse off i think is her argument was her  nt because there are other ways ms dukes could have gotten to the point she wants to be and now or she wants to disavow any personal liability and my response that is but she didn't do that we are looking at what she actually did and what she could have done even in the thirteen if she could have said at the beginning of the thirteen in her plan dear son coast here's how i'm treating your client your debt and any potential claims you have i'm giving you back your property and but she did not do that and so our client was being paid by the planet or by the separate motion of the debtor outside of the bankruptcy  paid directly so it may be he and maybe in hindsight they wished they'd done it differently or ms dukes wishes she had taken a different course but we're dealing with what actually happened so i think ok thank you  my name is richard calendar and i represent mildred dukes and i am a bankruptcy lawyer so i can answer some of these questions i believe at least i can try to address them the issue of the chapter seven has nothing to do with the chapter thirteen the statement was made and the purpose of it is this if she had chosen to file chapter seven the deficiency issue under this mortgage loan would have been discharged unless they brought some action regarding it but presuming as it stands now it would have been discharged suncoast would have been in no different position than it would have been at the end of the chapter thirteen mistook she was current at the time of filing she could have continued making her payments to suncoast she would have been current on her mortgage in or note and she could have gone along until she missed those payments and they would have proceeded to do whatever foreclosure in ram they wish to do but the end percent of liability would have been gone i have clients that file sevens pay thirteen were not less than that but a chapter thirteen debtor should be treated no different than a chapter seven debtor and that's basically what the story is they get rights the only difference that they've done is take the time frame over which to because the chapter thirteen is a repayment program by a person of regular income so what happens here mistakes can treat the secured debt because it's current by continuing to make payments whether the dispersing agent on those payments are the trustee or the debtor is irrelevant and we've provided in our briefs that issue so the concept of being outside the plan relates to issues and was discussed regarding issues under the act not under the code a cobra first nine hundred seventy nine the code came into effect they changed the concept to allow a fresh start this was part of it in under thirty under chapter thirteen the debtor has certain ways they can treat they secured credit thirteen twenty five there's basically for them the understanding as a practical matter let's say your client going through the thirteen she kept saying the mortgage she didn't get foreclosed on in the middle and she later on skits for as she's going to after the plans confirmed then at that point they foreclose on of that time and there will be a deficiency are you saying that anticipatory deficiency that might happen was wiped out because of this twenty five years later it's not relevant it doesn't matter this debt existed today at the time of the discharge the debt existed at that moment in time the discharge takes effect five twenty four says they were and join and by the way the provisions for discharge are the same at thirty eight isn't a seven the discharge enjoins the enforcement of collection against her personally not against the property which is what affected out affected relates to against her personally and she goes on it's just that simple it's not us it's not that complex when they when we file the thirteen suncoast has choices suncoast choice chose to do nothing here they could have come in and objected to the treatment under the plan and said well except at think the technical way she was provided in the plan this was anything that's in the plan is provided for in the plan we're going to pay them adequate protection that's a provision in the plan they're going to retain their lead as a secured creditor that's a provision on the planet under rake a gregory for the ninth circuit case a gregory there their definition of provided for in the plan is basically the accepted standard for provided for if you take it from that position there's in the plan we call for a payment of adequate protection we call for them to retain their security interest the fact that there's nothing else said doesn't stop the discharge if they wanted to be treated differently all they had to do is file an objection to the payment structure and say i want to be paid under thirteen twenty five within sixteen months in fall now what happens now the has to make a decision they didn't do that they can't go hide their head in the sand and say wait a minute this isn't provided for this was never raised at any point by the way just so you know and it's in the brief suncoast agrees that they were good that's not the anti modification provision relates to items in the plan b too says b two but all thirteen twenty two p provisions are discretionary with the better to put in the plan so the debtor has to choose to do those the anti modification provision says that we can't modify the provisions by the plan we can modify the terms and conditions of a look home mortgage was in personal interest section one of the terms and conditions that's correct and i agree however that's about a cation and there's nothing in my plan that modifie my plan doesn't modify their mortgage at all my plan says i'm going to pay you adequate protection during the life of my chapter thirteen that's all my plan basic says and you get to keep your link there's no modification of any of the rights under their mortgage you're not a discharge is not a modification it is an injunction and there's a big substantial difference between a modification in a plan and an injunction i didn't go in as a as debtors is debtor debtors council and say suncoast if we get through this you can have no right to to collect from it let your best authority for the proposition that this is not a modification would be a change in the terms and conditions of the the loan documents well the loan documents allow for a deficiency judgment  documents it isn't by operation of law that injunction goes into effect called the destruction we don't have modification with this church there are two hardly simple concepts in your argument then really as they made it technical misstep if they had just said we want this whole thing paid off in five years under the plan which nobody could do then your client would be right back where she was which sort of undercut your whole argument that the policy doesn't work that way no ma'am the point is this had they done that and told us that that's what they wanted to do then we would have had to change our position to figure out how to handle that issue however well you couldn't of she could have done well there are but there are ways to do these things we could have gone ahead and turn this into a chapter seven discharge the personal liability and if there was a no we were edge gone into a thirteen to control the debt structure and are we in state so there are the super twenty does work but the point is this they're saying that i'm sorry i lost my train of thought one second wouldn't that mean that the mortgage holder could never they'd just have to take the property back all the time they could never get a deficiency judgment correct out of thirteen that's correct they can they don't they're not entitled to a dish to it unless you invoke thirteen twenty to be five which takes that out of the discharge because that's an exception a discharge under thirteen twenty eight thirteen twenty eight says all except for if you invoke thirteen twenty two b five it must be invoked in the plan it isn't a matter of by implication it's a in order for you to waive a discharge even a seven you have to sign all these documents you have to give a consent you have to know that you're waving at the discharge is the total purpose behind the bankruptcy and it's jealously protected by the code the problem with where the with the position of suncoast is if the residence secured that correct however they're saying that by implication we're not going to be implying and i agree but i'm just talking about their argument the other problem with their argument is let's see if i can remember how i do this and i apologize for this the  is the provision that says you have the right to cure and maintain if you invoke it in your plant and say i'm going to cure and maintain in my plan under be five it's an exception to dis bateman said i owe you twenty two thousand dollars in my plan the creditor comes in and files a proof or claim an amended proof or claim and it's thirty two thousand dollars i my numbers are not in the case i'm just pulling them out of the  and it comes up to the eleventh circuit and the eleventh circuit says no that's not how it works number one the lien passes through bankruptcy uneffected number two you can't prohibit them from completing their foreclosure on the lien number three they because of the way the confirmation process occurred in bateman it was basically unfair to the creditor it was they treated the plant as an objection the claim without proper notice affectively the eleventh circuit at that point said no we're not going to treat the treat it that way that portion of the claim is going to continue