Bankr. No.:
04-40674
Chapter:
13
Date of Decision:
April 4, 2005
Issue:
Whether under 11 U.S.C. ยง 1322(b)(2) the debtors in their plan may modify the mortgage on their residence where the mortgage also contained an assignment of rents clause?
Ruling:
Under South Dakota law, the entitlement to rents runs with possession of the real property. Rents are not presumed to be given as collateral under a real estate mortgage unless specifically stated. Since this mortgage specifically included rents as additional collateral, the mortgage could be modified by the debtors under their proposed plan.
Full Bankruptcy Court Decision:
