Source: https://lundinonchapter13.com/Content/Section/136.19
Timestamp: 2019-12-08 06:23:08
Document Index: 714256041

Matched Legal Cases: ['§ 136', '§ 136', '§ 507', '§ 1325', '§ 507', '§ 507', '§ 101', '§ 507', '§ 507', '§ 507', '§ 507', '§ 1322', '§ 1325', '§ 507', '§ 1322', '§ 1328', '§ 101', '§ 502', '§ 507', '§ 1322', '§ 523', '§ 1328', '§ 1325', '§ 502', '§ 1325', '§ 300', '§ 136', '§ 440', '§ 73', '§ 136', '§ 507', '§ 519', '§ 136', '§ 101', '§ 519', '§ 136', '§ 523', '§ 159', '§ 523', '§ 507', '§ 522', '§ 136', '§ 300', '§ 136', '§ 441', '§ 73', '§ 555', '§ 523', '§ 159', '§ 523', '§ 1328', '§ 555', '§ 523', '§ 159', '§ 523', '§ 503', '§ 503']

§ 136.19 Secured Priority Claims after BAPCPA
Cite as: Keith M. Lundin, Lundin On Chapter 13, § 136.19, at ¶ ____, LundinOnChapter13.com (last visited __________).
Under pre-BAPCPA law, there were claims for alimony, maintenance or support that were secured by liens that were entitled to priority under § 507(a)(7) and were secured debts for purposes of § 1325(a)(5).1 BAPCPA amended § 507(a) to change and redefine the priority for domestic support obligations (DSOs) in § 507(a)(1).2 In that process, first priority now extends to only “unsecured claims for domestic support obligations.”3
The definition of DSO in § 101(14A) more broadly includes secured debts actually in the nature of alimony, maintenance and support.4 But a secured DSO cannot also be a first priority claim under § 507(a)(1). The duality for DSOs possible under pre-BAPCPA law has been eliminated.
Ironically, BAPCPA created a new priority debt that can also be a secured claim. BAPCPA added a new tenth priority in § 507(a)(10): “allowed claims for death or personal injury resulting from the operation of a motor vehicle or vessel if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug or another substance.”5 Unlike all of the other paragraphs and subparagraphs of § 507(a), the personal injury and death claims entitled to this new tenth priority are simply “allowed claims.” An allowed claim can be either secured or unsecured. A claim for death or personal injury resulting from unlawful operation of a vehicle or vessel when the debtor was intoxicated that has been reduced to judgment and become a lien on estate property would be both a priority and a secured claim in a Chapter 13 case.
The Bankruptcy Code is no more instructive today than it was before BAPCPA with respect to how such a dual-natured claim must be treated at confirmation.6 Because the debt is entitled to priority under § 507(a)(10), it must be paid in full as a condition for confirmation under § 1322(a)(2).7 Because it is a secured claim, it would be entitled to present value interest under § 1325(a)(5).
There is substantial similarity but an important difference between DSO claims and most DWI debts. After BAPCPA, an unsecured DSO is a first priority claim under § 507(a)(1) that is entitled to payment in full under § 1322(a)(2) and is nondischargeable under § 1328. Because the definition of DSO in new § 101(14A) includes interest that accrues after the petition, a Chapter 13 debtor has a substantial argument in favor of separate classification of DSO debt for payment in full with postpetition interest through the Chapter 13 plan notwithstanding that § 502(b)(2) would otherwise disallow postpetition interest as part of an unsecured debt.
A claim for death or personal injury resulting from the operation of a motor vehicle or vessel that was unlawful because the debtor was intoxicated would be a priority claim under § 507(a)(10) entitled to full payment in a Chapter 13 case under § 1322(a)(2). That debt would probably8 be nondischargeable in a Chapter 13 case by the incorporation of § 523(a)(9) into § 1328(a)(2).9 If the DWI debt is secured by a lien, it might also be entitled to present value interest after confirmation under § 1325(a)(5). The prohibition on payment of postpetition interest to an unsecured claim holder in § 502(b)(2) would not be implicated, and this secured priority claim could be paid with postconfirmation present value interest based on the different treatment of secured claims in § 1325(a)(5).
1 See § 300.1 [ Secured Priority Claims? ] § 136.18 Secured Priority Claims before BAPCPA.
2 See §§ 440.1 [ New and Changed Priority Claims ] § 73.3 Priority Claims Added or Changed by BAPCPA and 519.1 [ Domestic Support Obligations ] § 136.21 Domestic Support Obligations after BAPCPA.
3 11 U.S.C. § 507(a)(1)(A) and (B) (emphasis added), discussed in § 519.1 [ Domestic Support Obligations ] § 136.21 Domestic Support Obligations after BAPCPA.
4 See 11 U.S.C. § 101(14A), discussed in §§ 519.1 [ Domestic Support Obligations ] § 136.21 Domestic Support Obligations after BAPCPA and 552.1 [ Domestic Support Obligations: § 523(a)(5) ] § 159.5 Domestic Support Obligations: § 523(a)(5).
5 11 U.S.C. § 507(a)(10), discussed in § 522.1 [ The New DWI Priority ] § 136.22 The Driving or Boating while Intoxicated Priority after BAPCPA.
6 See § 300.1 [ Secured Priority Claims? ] § 136.18 Secured Priority Claims before BAPCPA.
7 See § 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6 Treatment of Priority Claims Changed by BAPCPA.
8 See discussion of “resulting from” and “caused by” in § 555.1 [ Boating or Flying while Intoxicated: § 523(a)(9) ] § 159.8 Boating or Flying while Intoxicated: § 523(a)(9).
9 See 11 U.S.C. § 1328(a)(2), discussed in § 555.1 [ Boating or Flying while Intoxicated: § 523(a)(9) ] § 159.8 Boating or Flying while Intoxicated: § 523(a)(9).
In re Austin, 538 B.R. 543 (Bankr. E.D. Mo. Sept. 18, 2015) (Surratt-States) (Debtors failed to prove that pending workers' compensation actions should be valued at zero for purpose of establishing extent to which IRS claim was secured. That debtors would be unable to propose a confirmable plan to deal with IRS's secured claim was not ground to assign zero value to workers' compensation claims.).
In re Peterson, No. 10-23429 (ASD), 2013 WL 3965307 (Bankr. D. Conn. Aug. 1, 2013) (Dabrowski) (Attorney fees and costs associated with postpetition foreclosure by assignee of secured property tax claim are disallowed. Claim allowed only in amount of original tax lien.).
In re Halabu, 501 B.R. 685, 701-02 (Bankr. E.D. Mich. Oct. 26, 2012) (Tucker) (Real estate taxes incurred between the petition and dismissal before confirmation can be an administrative expense entitled to priority under § 503(b) notwithstanding that real estate taxes are secured by a lien on the debtor's homestead. "Debtor relies on the general rule that a secured claim cannot be an administrative claim. But the cases cited by Debtor all predate the 2005 BAPCPA amendment to § 503(b)(1)(B)(i), and as amended, that section clearly establishes an exception to the general rule cited by Debtor. Section 503(b)(1)(B)(i) now says that the taxing authority has an allowed administrative claim, whether the tax is 'secured or unsecured.'"), supplemented by No. 11-59449, 2013 WL 780757 (Bankr. E.D. Mich. Mar. 1, 2013) (Tucker).).