Court Opinion

ID: 9519163
Source: CourtListenerOpinion
Date Created: 2023-08-07 01:10:36.846141+00
Date Added: 2024-06-11T12:43:51.399896
License: Public Domain

HUGHES, Bankruptcy Judge,
dissenting:
I dissent. While I agree that “reasonable time” as used in 11 U.S.C. § 1322(b)(5) is a flexible concept and that it must be left to the sound discretion of the court, I believe that the term as used requires that the cure be completed in “the most expeditious time, consistent with true rehabilitation...” In re Pollasky, 7 B.R. 770 (Bkrtcy.D.Colo.1980). Since the plan as confirmed gave preference to other creditors over the section 1322(b)(5) creditor, it did not “provide for the curing of” the default to appellant “within a reasonable time.”
If appellant held a note that was not secured by the debtor’s principal residence, 11 U.S.C. § 1322(b)(2), we would not be concerned with the requirement that the default be cured “within a reasonable time.” Section 1322(b)(3) permits the curing of defaults on debts other than that held by appellant and does not require the cure to be completed within a reasonable time.
This does not mean there is no time limit on a section 1322(b)(3) cure; such a provision is permitted in a plan but a plan cannot exceed three years (five years for cause). 11 U.S.C. § 1322(c). Thus a section 1322(b)(3) cure must be completed within the life of the plan.
By inserting the “reasonable time” requirement for section 1322(b)(5) cures, Congress presumably meant to treat such cures differently than section 1322(b)(3) cures. It seems fair to assume that a “reasonable time” was intended to be less than the life of the plan in the usual case. Hence, the definition in Pollasky, supra: “The most expeditious time, consistent with true rehabilitation ...”
Congress no doubt recognized that an expeditious cure of a long-term indebtedness on a debtor’s home is not merely in the creditor’s interest. It is also very much in the debtor’s interest to reinstate the loan at the earliest date possible and thereby avoid foreclosure even if circumstances prevent the debtor from completing the balance of the plan.
What constitutes “the most expeditious time,” of course, must be left to the discretion of the court, which must also consider the rehabilitation objective. In the absence of special circumstances, I can see no justification for disbursing to general, unsecured creditors before the section 1322(b)(5) cure is completed. On the other hand, a level of payments to personal property secured creditors may be required, consistent with the debtor’s rehabilitation.
I would reverse and remand for consideration of the factors discussed.