Court Opinion

ID: 9481262
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:12:29.17657+00
Date Added: 2024-06-11T17:48:10.816706
License: Public Domain

BRORBY, Circuit Judge,
dissenting.
As I would affirm the decision of the district court, I must dissent.
The principal issue we must decide is the apparent tension between two separate provisions of.the Bankruptcy Code. 11 U.S.C. § 506(a) provides that a claim is secured only to the extent of the value of the property on which the lien is fixed. The balance of the debt is unsecured. On the other hand, 11 U.S.C. § 1322(b)(2) provides that a plan may modify the rights of holders of secured claims “other than a claim secured only by a security, interest in real property that is the debtor’s principal residence _” Id.
The majority’s conclusion is that § 1322(b)(2) applies only after the secured debt has been reduced to the fair market value of the property. In other words, § 1322(b)(2) “kicks in” only to prevent any further modification of this secured claim. The problem with this approach is that it renders § 1322(b)(2) essentially meaningless.
The majority accurately describes the split in authority on this issue and cites numerous bankruptcy court decisions in the Fifth, Eighth and Eleventh Circuits that have disagreed with the majority’s approach. I am persuaded by these decisions. I believe these cases correctly analyze the problem and reach the better solution.