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IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

IN RE:

PATRICK J. HOSTY Case No. 20-31778

Chapter 13

OBJECTION TO CHAPTER 13 PLAN CONFIRMATION BY SECURED CREDITOR

APPLE FEDERAL CREDIT UNION

Apple Federal Credit Union, by and through undersigned counsel of record object to

the confirmation of the Amended Chapter 13 plan for the following reasons:

1) On April 1, 2020 the Debtor filed for relief under Chapter 13 of the United States

Bankruptcy Code.

2) On June 10, 2019, the Debtor obtained a purchase money loan from Apple

Federal Credit Union secured by the Debtor’s 2018 Jeep Renegade.

3) On June 10, 2020, Apple Federal Credit Union filed a proof of claim herein

asserting that as of the date of the petition, it was owed $34,217.50 at an interest

rate of 7.14%.

4) The original proposed Chapter 13 plan provided for the pre-petition arrears to be

paid through the plan and post-petition payments to be maintained by Apple

Federal Credit Union. The pre-petition arrears as stated in the proof of claim

were $1,732.56.

5) The Debtor did not make post-petition payments to Apple Federal Credit Union.

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6) On or about September 4, 2020, Apple Federal Credit Union filed a Motion for

Relief from the Automatic Stay. The post-petition arrears as of the filing of the

motion were $3,457.50 including $750.00 attorney’s fees and $181.00 in costs for

filing the Motion for Relief from Stay.

7) On September 25, 2020, the Plan was confirmed.

8) On September 29, 2020, one day prior to the hearing on the Motion for Relief

from Stay, the Debtor filed an Amended proposed plan providing for adequate

protection to be paid by the Trustee in the amount of $150.00 per month and

providing for payment to Apple Federal Credit Union through the plan in the

amount of $39,411.00 at 4.25% interest in satisfaction of its claim.

9) The balance owed to Apple Federal Credit Union as of the filing of the Amended

Plan on September 29, 2020 was $40,688.42 including $750.00 attorney’s fees

and $181.00 costs incurred for the Motion for Relief from Stay.

10) The Debtor is unable to “cram-down” the vehicle as the debt was incurred within

one year of the bankruptcy filing pursuant to Section 1325 and Section 506 of the

United States Bankruptcy Code.

11) The Debtor is unable to “cram-down” the vehicle as the debt was incurred within

the 910 day period preceding the date of the filing of the petition and the

collateral for that debt consists of a motor vehicle. See 11 U.S.C. §1325.

12) In Till v. SCS Credit Corp, the Supreme Court adopted a formulaic approach to

determining the proper cram down interest rate in Chapter 13 cases. The formula

(“prime plus”) approach adopted in Till calculates the present value of deferred

cash payments to a secured lender using a risk-free interest rate (i.e., the prime

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rate), and adjusting that rate — by 100 to 300 basis points — to account for risk.

541 U.S. 465 (2004).

13) The prime rate of interest at the time the bankruptcy was filed was 4.37%. See,

https://www.statista.com/statistics/290673/auto-loan-rates-usa/

14) The Chapter 13 Till Interest Rate pursuant to the United States Bankruptcy Court

for the Middle District of North Carolina was 6.25% at the time the bankruptcy

was filed. See www.ncmb.uscourts.gov/till.

15) The rate used by the Middle District of North Carolina considers less than a two

point risk factor on the prime rate and is therefore an appropriate rate of interest.

The Debtor’s proposed rate of prime minus .12% is an inappropriate rate of

interest.

WHEREFORE, Apple Federal Credit Union objects to the confirmation of the

Chapter 13 plan.

Respectfully submitted,

SILVERMAN THEOLOGOU, LLP

/s/ Diana C. Theologou, Esq.

DIANA C. THEOLOGOU, ESQ.

Bar # 14284

11200 Rockville Pike, Suite 520

N. Bethesda, Maryland 20852

Phone: 301-468-4990

Fax: 301-468-0215

dtheologou@silvermanlegal.com

Attorney for Apple Federal Credit

Union

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CERTIFICATE OF SERVICE

I, Diana C. Theologou, Esq. of 11200 Rockville Pike, Suite 520, North

Bethesda, MD 20852 certify that on the 8th of October 2020 the foregoing Objection

to Confirmation was served by first class mail, postage prepaid, on:

Chapter 13 Trustee

Carl M. Bates

PO Box 1819

Richmond, VA 23218

James E. Kane

Kane & Papa, PC

1313 East Cary St.

PO Box 508

Richmond, VA 23218

Patrick James Hosty

11007 Copeland Court

Fredericksburg, VA 22407

SILVERMAN THEOLOGOU, LLP

/s/ Diana C. Theologou, Esq.

DIANA C. THEOLOGOU, ESQ.

Bar # 14284

11200 Rockville Pike, Suite 520

N. Bethesda, Maryland 20852

Phone: 301-468-4990

Fax: 301-468-0215

dtheologou@silvermanlegal.com

Attorney for Apple Federal Credit

Union

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