Bankr. No.:
14-40044
Chapter:
13
Date of Decision:
November 20, 2014
Issue:
What is the appropriate post-petition interest rate on unsecured claims in a chapter 13 case in which the debtor concedes, pursuant to 11 U.S.C. § 1325(a)(4), all allowed unsecured claims would be paid in full if the debtor’s estate were liquidated under a chapter 7?
Ruling:
The applicable post-petition, pre-confirmation interest rate is the federal judgment interest rate mandated by 11 U.S.C. § 726(a)(5) and defined by 28 U.S.C. § 1961(a), currently .11%. The applicable post-confirmation interest rate in this case is 5%, using the “formula approach” described in Till v. SCS Credit Corp., 541 U.S. 465 (2004), which begins with the national prime rate of interest (currently 3.25%) and is adjusted based on the risk of nonpayment (an upward adjustment of 1.75% in this case).
