Source: https://lundinonchapter13.com/Content/Section/158.5
Timestamp: 2019-09-18 03:53:00
Document Index: 68540571

Matched Legal Cases: ['§ 158', '§ 502', '§ 158', '§ 1322', '§ 1328', '§ 1322', '§ 1322', '§ 1322', '§ 1328', '§ 1322', '§ 1328', '§ 1322', '§ 1328', '§ 1322', '§ 1322', '§ 1322', '§ 1328']

§ 158.5 Claims Not Provided for by the Plan or Disallowed under § 502
Cite as: Keith M. Lundin, Lundin On Chapter 13, § 158.5, at ¶ ____, LundinOnChapter13.com (last visited __________).
Dukes v. Suncoast Credit Union (In re Dukes), 909 F.3d 1306, 1310–22 (11th Cir. Dec. 6, 2018) (Pryor, Carnes, Conway) (Confirmed plan that paid mortgage directly by the debtor did not “provide for” the mortgage and debtor’s personal liability for deficiency after foreclosure was not discharged; confirmed plan could not be interpreted to provide for discharge of mortgage because modification was prohibited by § 1322(b)(2). Confirmed plan stated that mortgage would be paid directly by the debtor. Debtor completed payments under the plan and received a discharge. Debtor had defaulted on mortgage payments directly to mortgage holder, and after foreclosure, mortgagee sought judgment against the debtor for the deficiency. “[W]e hold that, for a debt to be ‘provided for’ by a plan under § 1328(a), the plan must make a provision for or stipulate to the debt in the plan. Because Debtor’s plan did nothing more than state that the Credit Union’s mortgage would be paid outside the plan, it was not ‘provided for’ and was not discharged. Even if it was provided for, we hold that discharge of the Credit Union’s debt would violate § 1322(b)(2) by modifying the Credit Union’s right under the original loan documents to obtain a deficiency judgment against Debtor. . . . [T]he plan lists the amount for the adequate protection payments required under the Bankruptcy Code. . . . [N]o money would be paid through the plan to the Credit Union, meaning that any payments made on the Credit Union’s mortgages will be made directly to the Credit Union, not through the bankruptcy trustee. . . . The bankruptcy court . . . issued two orders authorizing direct payments to the Credit Union . . . . The orders accordingly terminated the automatic stay against the Credit Union for its mortgages, permitting it ‘to seek in rem relief against the property securing [the Credit Union’s] claim[s].’ . . . Debtor made a few of the scheduled payments to the Credit Union on her mortgages but stopped paying altogether in 2011. Both mortgages entered default. In 2013, the Credit Union foreclosed . . . and sought a personal judgment against Debtor . . . . Supreme Court precedent defines ‘provided for’ more narrowly to require that the plan either stipulate to or make a provision for the debt. In other words, the plan’s terms must, in some way, affect or govern the debt’s repayment. By stating only that Debtor would make any payments to the Credit Union directly, Debtor chose not to handle the Credit Union’s debt through her bankruptcy. . . . Unlike the plan in [Rake v. Wade, 508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (June 7, 1993)], Debtor’s plan did not set forth any repayment terms for any portion of the Credit Union’s mortgage. Instead, the plan merely stated that the Credit Union’s mortgage would be paid outside the plan—nothing more. . . . The statement that Debtor was to make payments directly to the Credit Union was merely a clarification of what was included and what was excluded from the plan. . . . By failing to set forth any terms governing repayment of the Credit Union’s mortgage, the plan did not ‘provide for’ it. . . . Rake does not stand for the proposition that a plan ‘provides for’ a claim merely by mentioning it. . . . [L]ikely because Chapter 13 bankruptcy is particularly ill-suited for most debtors who have long-term mortgage debt due to the inability to either modify such debt or repay it on an accelerated five-year schedule, Debtor chose not to address the Credit Union’s mortgage in her plan. The simplest conclusion then is that Debtor’s plan, by not addressing the Credit Union’s mortgage, did not ‘provide for’ it. . . . The Code gives debtors a choice to either repay such long-term debt ‘inside’ the plan—with the trustee acting as disbursing agent—or ‘outside’ the plan, with payments coming directly from the debtor, often under the terms of the original debt instruments. . . . Even if the plan were somehow construed as ‘provid[ing] for’ the Credit Union’s mortgage, there could still be no discharge of the mortgage given the antimodification provision in § 1322(b)(2). . . . By terminating the Credit Union’s right to obtain an in personam judgment against the debtor, discharge undoubtedly modifies the Credit Union’s rights and runs afoul of the antimodification provision. . . . Even if the mortgage was ‘provided for,’ it still would not be discharged because discharge would violate § 1322(b)(2)’s antimodification provision.”), aff'g No. 2:15-cv-420-FtM-99, 2016 WL 5390948, at *3–*4 (M.D. Fla. Sept. 27, 2016) (Chappell) (In alternative holdings: direct payment of mortgage does not “provide for” mortgage, therefore underlying debt is not discharged; direct payment of long-term mortgage debt is excepted from discharge by § 1328(a)(1). Confirmed plan required debtor to make mortgage payments directly to lender. Debtor failed to make all of monthly payments. Discharge was entered after completion of payments to the trustee. Lender then filed an adversary proceeding to determine the dischargeability of its mortgage. “The mere mention that Dukes would pay Suncoast’s claim directly in the Plan, without more, did not result in Suncoast’s claim being ‘provided for’ under the Plan. . . . Suncoast’s debt was removed from the Plan by Dukes[’] decision to directly pay Suncoast herself. . . . [W]hen that claim is ‘long term debt’ and the plan proposes for the debtor to maintain payments, the claim is provided for under § 1322(b)(5) and excepted from discharge under § 1328(a)(1). . . . [E]ven if the Court were to agree with Dukes’ position, § 1322(b)(5) would still govern and Suncoast’s claim would not be discharged.”), aff'g No. 9:14-ap-00569-FMD, 2015 WL 3856335, at *3–*5 (Bankr. M.D. Fla. June 19, 2015) (Delano) (Mortgage paid directly by debtor is not "provided for" and is not discharged under § 1328(a). "Debtor specifically chose to [ ] make payments directly to Suncoast without modifying in any way her obligations to Suncoast, thereby leaving Suncoast's rights unaffected by the plan under § 1322(b)(2). . . . [B]ecause Debtor left the rights of Suncoast unaffected, her plan did not provide for Suncoast and the obligation to Suncoast is not discharged. . . . The mere mention of a creditor in a debtor's Chapter 13 plan, without more, does not result in that creditor's claim being 'provided for' under the plan. . . . [P]lan that does not modify the rights of a secured creditor under the plan 'leave[s] unaffected' the rights of that creditor under § 1322(b)(2). If the rights of a holder of a claim are left unaffected, the claim is not discharged. . . . [E]ven if it were determined that a claim paid 'outside the plan' is still 'provided for' under the plan, when that claim is 'long term debt' and the plan proposes for the debtor to maintain payments, the claim is provided for under § 1322(b)(5) and excepted from discharge under § 1328(a)(1).").