Date of Decision:
January 19, 2011
Whether Debtors' proposed modification of a secured creditor's rights under a note secured by a mortgage against Debtors' principal residence was prohibited by 11 U.S.C. § 1322(b)(2) (a chapter 13 plan may not modify the rights of a holder of "a claim secured only by a security interest in real property that is the debtor's principal residence")?
Yes. The collateral securing Debtors' obligations under the note comprised Debtors' principal residence and all improvements, easements, appurtenances, fixtures, replacements, and additions. Each of these items fell within the parameters of 11 U.S.C. § 101(13A)(A) (defining "debtor's principal residence") and (27B) (defining "incidental property"). The Court did not deem Debtors' assignment of certain miscellaneous proceeds to the creditor to be a security interest.
Full Bankruptcy Court Decision: