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BULLARD v. BLUE HILLS BANK 

Opinion of the Court 

I 

In  December  2010,  Louis  Bullard  filed  a  petition  for 
Chapter  13  bankruptcy  in  Federal  Bankruptcy  Court  in
Massachusetts.  A  week  later  he  filed  a  proposed  repay­
ment plan listing the various claims he anticipated credi­
tors  would  file  and  the  monthly  amounts  he  planned  to
pay  on  each  claim  over  the  five-year  life  of  his  plan.    See 
11  U. S. C.  §§1321,  1322.    Chief  among  Bullard’s  debts
was  the  roughly  $346,000  he  owed  to  Blue  Hills  Bank, 
which  held  a  mortgage  on  a  multifamily  house  Bullard
owned.  Bullard’s  plan  indicated  that  the  mortgage  was 
significantly  “underwater”:  that  is,  the  house  was  worth 
substantially  less  than  the  amount  Bullard  owed  the 
Bank. 

Before  submitting  his  plan  for  court  approval,  Bullard
amended  it  three  times  over  the  course  of  a  year  to  more 
accurately reflect the value of the house, the terms of the 
mortgage,  the  amounts  of  creditors’  claims,  and  his  pro­
posed  payments.  See  §1323  (allowing  preconfirmation 
modification).  Bullard’s  third  amended  plan—the  one  at
issue  here—proposed  a  “hybrid”  treatment  of  his  debt  to
the  Bank.  He  proposed  splitting  the  debt  into  a  secured 
claim  in  the  amount  of  the  house’s  then-current  value 
(which he estimated at $245,000), and an unsecured claim
for  the  remainder  (roughly  $101,000).  Under  the  plan,
Bullard  would  continue  making  his  regular  mortgage 
payments toward the secured claim, which he would even­
tually repay in full, long after the conclusion of his bank­
ruptcy  case.    He  would  treat  the  unsecured  claim,  how­
ever, the same as any other unsecured debt, paying only as
much  on  it  as  his  income  would  allow  over  the  course  of 
his five-year plan.  At the end of this period the remaining 
balance  on  the  unsecured  portion  of  the  loan  would  be
discharged.    In  total,  Bullard’s  plan  called  for  him  to  pay
only about $5,000 of the $101,000 unsecured claim.

The Bank (no surprise) objected to the plan and, after a