[1]
BAPCPA added a new periodic payment requirement to § 1325(a)(5) that will cause problems in some Chapter 13 cases. New § 1325(a)(5)(B)(iii) states: “(iii) if— (I) property to be distributed pursuant to this subsection is in the form of periodic payments, such payments shall be in equal monthly amounts.” The reference to “this subsection” means § 1325(a)(5). This new equal monthly payment requirement applies to every “allowed secured claim provided for by the plan” when periodic payments are provided.
[2]
“Periodic” is not defined by the new subsection or by any other provision of the Bankruptcy Code. How many payments do you suppose are required and on what schedule before payments become periodic? The second part of the new subsection requires that “such payments” shall be in “equal monthly amounts.” Does this mean that periodic payments have to be monthly payments? What about a Chapter 13 plan that is funded from the sale of an annual crop? Is a once-yearly payment periodic? And if it is, how can a once-a-year payment be made in equal monthly amounts? If either the debt contract or the debtor’s plan does not call for monthly payments, does this new subsection mandate (equal) monthly payments?
[3]
These aren’t hypothetical questions. Chapter 13 plans often include payments that are not monthly—for example, real estate taxes that are paid once a year. If a once-yearly payment is not periodic, then it is not subject to the equal amount mandate. Some real estate mortgages—especially farms and rural homesteads—are payable quarterly or semi-annually. How many payments a year are required before a distribution becomes periodic and must be made in equal monthly amounts?
[4]
Because the equal monthly amount requirement only applies to allowed secured claims provided for by the plan under § 1325(a)(5), the statute does not immediately resolve whether the new requirement applies to other treatments of secured claims. For example, § 1322(b)(5) permits curing default and maintaining payments with respect to any secured (or unsecured) claim on which the last payment is due after the final payment under the plan. In the home mortgage context, in Rake v. Wade, the Supreme Court indicated that payments to cure arrearages on a long-term debt provided for under § 1322(b)(5) were subject to § 1325(a)(5) at least to the extent that a Chapter 13 debtor curing default under § 1322(b)(5) was required to pay postpetition interest on arrearages consistent with § 1325(a)(5). In 1994, Congress enacted § 1322(e) to overrule parts of Rake, raising the question whether a mortgage arrearage cured under § 1322(b)(5) is also an allowed secured claim provided for by the plan for purposes of § 1325(a)(5).
[5]
This issue has new significance in light of the equal monthly amount requirement in § 1325(a)(5)(B)(iii). In In re Davis, the bankruptcy court concluded that § 1325(a)(5) was not implicated when a long-term mortgage is cured under § 1322(b)(5) and thus the equal payment requirement in § 1325(a)(5)(B)(iii) did not apply. The plan in Davis cured defaults on a claim secured by a manufactured home in unequal periodic payments of zero dollars for months 1 through 10 and $122.23 for months 11 through 57. The Davis court rejected an equal monthly installments argument based on the finding that the “[c]reditor’s claim falls outside the ambit of requirements contained under Section 1325(a)(5).”
[6]
On only slightly different facts, several courts have disagreed with Davis and concluded that the equal monthly amount requirement in § 1325(a)(5)(B)(iii) applies to plans that cure mortgage defaults. For example, in In re Schultz, the plan proposed to maintain monthly payments on a long-term mortgage and pay the balance from refinancing at the end of 60 months. Citing § 1325(a)(5)(B)(iii)(I), the bankruptcy court found this proposal violated the equal monthly installments requirement. Because the mortgage holder did not object to confirmation, the bankruptcy court inferred acceptance and confirmed the plan under § 1325(a)(5)(A). Along the way the court said this about equal monthly installments when a Chapter 13 plan cured defaults under § 1322(b)(5):
This court is not persuaded that subsection 1325(a)(5)(B)(iii) does not apply when only a portion of the allowed secured claim, i.e., current payments and the arrearage, are being paid pursuant to the plan. . . . Section 1322(b)(5) just means that the entire secured claim need not be paid in full under certain circumstances allowing cure of default, but the claim is still an allowed secured claim. This court holds that periodic payments must be equal, period. This applies when the default is cured and only current payments and the arrearage are being paid pursuant to the plan pursuant to 11 U.S.C. § 1322(b)(5) and when a long-term or matured debt are paid in full under the plan.
[7]
At present, a majority of reported decisions reads the equal monthly amount requirement in § 1325(a)(5)(B)(iii) to prohibit the use of balloon payments by sale or refinancing to manage the curing of mortgage arrearages when periodic payments are also contemplated by the plan. Not answered by these cases is the question whether a pure refinance or balloon payment plan—one that does not include periodic payments—would be subject to the equal monthly installments requirement in § 1325(a)(5)(B)(iii). Such a plan would still have to satisfy the condition in § 1322(b)(5) that defaults be cured within a “reasonable time.” But both sections function without conflict when a plan cures arrearages with a single payment within a reasonable time after confirmation. It is only when the plan also provides for “periodic” payments that the equal monthly amount requirement in § 1325(a)(5)(B)(iii) becomes an obstacle to curing default with a balloon payment.
[8]
Does § 1325(a)(5)(B)(iii)(I) prohibit paying the arrearage on an allowed secured claim more quickly than the rest of the claim? Imagine a home mortgage with a monthly payment of $500 that is three payments behind at confirmation. The plan proposes to cure default and maintain payments under § 1322(b)(5). Before BAPCPA, a common formula for paying the mortgage and the arrearage was something like a $600 payment for 15 months—until the $1,500 arrearage was paid in full—and then $500 per month for the remainder of the plan to maintain the regular monthly payment. The majority construction of § 1325(a)(5)(B)(iii)(I) in the § 1322(b)(5) context could prohibit this unequal monthly distribution scheme unless the mortgage holder accepts the plan.
[9]
For most claims secured by personal property, monthly payments are the norm in Chapter 13 cases. The issue then becomes the requirement that such payments be “equal.”
[10]
That periodic payments must be in equal monthly amounts probably means that the amount paid each month must be the same. The House Report supports this interpretation, stating that § 1325(a)(5)(B) was amended “to require that periodic payments pursuant to a chapter 13 plan with respect to a secured claim be made in equal monthly installments.” It has been held that the equal amount requirement is violated when a debtor defaults after confirmation and proposes to modify the plan to complete payment of an allowed secured claim without curing the postconfirmation default.
[11]
New § 1325(a)(5)(B)(iii) may reduce or end the practice in some jurisdictions of “staging” or “stairstepping” payments into Chapter 13 plans. By this convention, Chapter 13 debtors pay less into the plan during the early months after confirmation and the funding increases during subsequent years. Sometimes the result is that distributions to secured claim holders are not level, but start out lower and increase as payment into the plan increases. The new equal monthly amount rule in § 1325(a)(5)(B)(iii)(I) would not prohibit a debtor from increasing (or decreasing) payments into the plan with time so long as the distributions to secured claim holders remain equal. The mathematics of retiring secured claims in full may demand that the amount of money paid into the plan during the early years be greater than some debtors would prefer to level out distributions into equal monthly amounts.
[12]
The new equal monthly payment requirement will also prohibit the practice of providing “pro rata” distribution to secured claim holders from whatever funds are available each month after distributions to claims with higher priority. In a pro rata distribution scheme, the amount distributed to each secured claim holder may vary from month to month and would be equal only by happenstance. New § 1325(a)(5)(B)(iii)(I) will require all Chapter 13 plans to specify exactly the amount of monthly payment to each allowed secured claim holder—unless the claim holder accepts other treatment.
[13]
The equal monthly amount requirement could make problems in districts that allow attorneys’ fees to be paid on a priority basis in the early months after confirmation. Unless the payment of attorneys’ fees (or other priority claims) is carefully accounted for in the mathematics of the plan, priority payments during the early months after confirmation can eat into the installments that are due to allowed secured claim holders. A plan that provides a fixed (equal) monthly payment to an allowed secured claim holder that is not sufficiently funded might fail the equal monthly amount requirement in new § 1325(a)(5)(B)(iii)(I). One obvious solution is that payments into the plan must be sufficient to cover all of the monthly payments to allowed secured claim holders even in a month when the debtor’s attorney or other priority claim holders are also receiving distributions. This will not always be financially possible.
[14]
Another solution is emerging in the case law: Pay the attorney’s fee in full before equal monthly installments begin. To get there, several courts have reasoned that nothing in § 1325(a)(5)(B)(iii)(I) requires equal monthly installments to begin at any particular moment during the Chapter 13 case. In other words, when the plan proposes periodic payments to an allowed secured claim holder, § 1325(a)(5)(B)(iii)(I) does not specify that equal monthly payments must begin immediately after the petition, immediately after confirmation or at any other particular time. As explained by the bankruptcy court in In re DeSardi:
The equal payment provision does not state that its requirements must be met beginning in month one of the plan. Nor does the section state that payments must be equal “as of the effective date of the plan.” . . . The Court understands this clause to require payments to be equal once they begin, and to continue to be equal until they cease. . . . DaimlerChrysler argued that upon the date of confirmation it should receive a lump sum payment equal to the difference between the adequate protection amount and the scheduled plan payments. This . . . would equalize the payments under the plan, fulfilling the equal payment provision. However, the argument fails if the Court applies this logic to adequate protection provided for under a plan. A lump sum payment would make all subsequent payments unequal to the lump sum payment. . . . Nuvell’s argument that plan payments must be equal throughout the life of the plan fails because a creditor cannot insist on continued payments once principal and interest are fully paid. . . . Nuvell’s interpretation means that every car lender must finance every car for the life of every plan. . . . [T]he equal payment provision terminates upon full payment. . . . [T]he equal payment provision requires that payments be level once they begin and terminate once the lender is fully paid. Exactly when these level payments begin is case-specific. . . . There is only one period of payment, dating from the first scheduled payment on a secured claim to the date of full satisfaction. Throughout this period, insofar as periodic payments are to be made, “such payments shall be in equal monthly amounts.”
[15]
If equal monthly payments need not begin immediately after the petition or at confirmation, then the plan can satisfy § 1325(a)(5)(B)(iii)(I) when equal monthly installments to an allowed secured claim holder begin several months after confirmation. This creates a gap during which the plan can use the money that would have gone to the secured claim holder for the payment of attorneys’ fees. This is exactly what several courts have concluded: After confirmation and before equal monthly installments begin to an allowed secured claim holder, the debtor can pay attorneys’ fees through the Chapter 13 plan.
[16]
Courts that permit payment of attorneys’ fees before commencement of equal monthly installments to an allowed secured claim holder impose an additional condition when adequate protection requirements are in play. Detailed elsewhere, § 1326(a)(1)(C) requires adequate protection of some allowed secured claim holders before confirmation and § 1325(a)(5)(B)(iii)(II) requires that payments to personal-property-secured creditors after confirmation must be sufficient to provide adequate protection during the period of the plan. These adequate protection imperatives collide with the equal monthly installment requirement because measuring adequate protection for a secured claim holder is a different calculation than determining the amount necessary to retire an allowed secured claim. Adequate protection typically mimics depreciation caused by the debtor’s use of the property or by the automatic stay. Paying an allowed secured claim consistent with § 1325(a)(5) involves amortization of debt over some period of months at a specified interest rate. The equal monthly installments required by § 1325(a)(5)(B)(iii)(I) will not be the same in amount or duration as the amount necessary to provide adequate protection after confirmation under § 1325(a)(5)(B)(iii)(II) except by coincidence. But § 1325(a)(5)(B)(iii)(II) compels that during the gap after confirmation and before commencement of equal monthly installments, most personal-property-secured claim holders are entitled to payments that at least provide adequate protection.
[17]
Putting these thoughts together, several courts have held that a Chapter 13 plan can delay commencement of equal monthly installments to an allowed secured claim holder for months after confirmation to permit payment of attorneys’ fees but that the allowed secured claim holder must receive payments that provide adequate protection while the creditor waits for equal monthly installments to begin. The result is an elegant accommodation of the adequate protection and equal monthly installment rights of secured claim holders and the practical need to pay administrative expenses in Chapter 13 cases. The alternative—that equal monthly installments must begin immediately after confirmation—would wreck the feasibility of a fair number of Chapter 13 plans and is an outcome not compelled by the language of § 1325(a)(5)(B)(iii).
[18]
There is a strained interpretation of § 1325(a)(5)(B)(iii)(I) that would require the periodic payments to all allowed secured claim holders to be in the same equal monthly amounts. This, of course, leads to the absurd result that a car lender and a home mortgage holder must be paid the same monthly payment through a confirmed Chapter 13 plan without regard to value or contract rights. The better reading of the new section would confine the equal monthly amount requirement to the payment of each individual allowed secured claim.
[19]
New § 1325(a)(5)(B)(iii)(I) shows no respect for Chapter 13 debtors who have seasonal or irregular incomes. Many eligible Chapter 13 debtors fall in this category—teachers who have nine months of income at one level and three months of no or different income; construction workers or anyone in an outdoor or seasonal trade. It is common to allow Chapter 13 debtors with seasonal employment to make larger payments into the plan during the good months and not-so-large payments during the not-so-good months. Distributions to creditors are accordingly uneven but sufficient over time to produce a confirmable plan before BAPCPA. Absent acceptance from allowed secured claim holders, Chapter 13 debtors with seasonal income will have to propose equal monthly payments even in months when less income is available to pay the Chapter 13 trustee. For some debtors, this will translate into smaller monthly payments spread out over a longer period of time than would be the case if the debtors could propose larger distributions in some months and smaller distributions in others.
[20]
Section 1325(a)(5)(B)(iii)(I) will complicate the design of Chapter 13 plans that increase payments to allowed secured claim holders as other debts are paid off during the plan. For example, it is not uncommon for a Chapter 13 debtor to have a mortgage arrearage that will be cured in, say, 18 months. The money distributed to the mortgage holder becomes available to other creditors in the 19th month after confirmation. Most Chapter 13 debtors would prefer to distribute that money to other allowed secured claim holders to retire those liens. It is not obvious why any allowed secured claim holder would object to increasing its monthly payment as other secured claims are paid off during the plan, but § 1325(a)(5)(B)(iii)(I) discourages Chapter 13 debtors from constructing that kind of plan.
[21]
The equal monthly payment requirement in § 1325(a)(5)(B)(iii)(I) is a confirmation entitlement that can be waived by the failure of an allowed secured claim holder to object to confirmation. For example, in In re Tonioli, the debtor defaulted in postconfirmation payments to a car lender entitled to equal monthly payments under § 1325(a)(5)(B)(iii)(I). The debtor moved to modify the plan to “abate” the delinquency. The bankruptcy court first concluded that abating the delinquent postconfirmation payments would violate the equal payment requirement in § 1325(a)(5)(B)(iii)(I). Had the lienholder objected to modification, the court would have denied the motion. Because the car lender was silent, acceptance of the modification was inferred and unequal payments permitted.
[22]
It is perhaps desirable that new § 1325(a)(5)(B)(iii)(I) will require greater specificity of the treatment of secured claims through Chapter 13 plans. It was a goal of the pre-BAPCPA Model Chapter 13 Plan that secured claim holders would always know exactly what monthly payment the plan proposed. The equal monthly amount requirement in new § 1325(a)(5)(B)(iii)(I) will require Chapter 13 debtors’ attorneys to carefully calculate plans to ensure there is enough money in each month to make the specified monthly payments to allowed secured claim holders.
[23]
The law of unintended consequences takes over when equal monthly payments are not exactly what a lienholder wants from the Chapter 13 case or when a little flexibility would actually advantage the lienholder by increasing the amount or decreasing the time for payments through the plan. It can be anticipated that in most such situations the lienholder will consent to unequal treatment when unequal is better.
Hamilton v. Wells Fargo Bank, N.A. (In re Hamilton), 401 B.R. 539 (B.A.P. 1st Cir. Mar. 6, 2009) (Carlo, Deasy, Kornreich) (Payment to mortgage holder "in such amounts and at such times as the chapter 13 trustee deems administratively convenient" required "periodic payments" for § 1325(a)(5)(B)(iii)(I) purposes because § 1326(a)(2) directed trustee to distribute monthly to mortgage holder; separate provision for balloon payment in 60th month violated equal-payment requirement in § 1325(a)(5)(B)(iii)(I). Too clever debtor argued that discretion to make payments was not "periodic" and did not trigger equal-payment requirement. "Overwhelmingly, courts have held that by its very terms, a balloon payment is not equal to the payment that preceded it, and thus violates § 1325(a)(5)(B)(iii)(I) with respect to periodic payments on a secured claim under a chapter 13 plan. . . . The Bankruptcy Code does not define 'periodic' . . . . [T]he plan requires the Debtor to make substantial monthly payments to the chapter 13 trustee. Section 1326(a)(2) will then impose an obligation on the chapter 13 trustee to make payments on the Wells Fargo modified secured claim on a monthly basis. The provisions of the plan and the requirements of § 1326(a)(2) will compel 'periodic' payments on account of the Wells Fargo modified secured claim. . . . Therefore, the payments must comply with the requirements of § 1325(a)(5)(B)(iii)(I) regardless of whether the plan explicitly directs timing of payments by the trustee. . . . [T]o suggest otherwise is to elevate form over substance." Rejecting In re Davis, 343 B.R. 326 (Bankr. M.D. Fla. 2006), when the plan proposes to modify a mortgage under § 1322(b)(2) with a balloon payment in full in the 60th month, § 1322(e) does not override the periodic-payment requirement in § 1325(a)(5)(B)(iii)(I).).
Wilson v. Wells Fargo Bank, N.A. (In re Wilson), 402 B.R. 66 (B.A.P. 1st Cir. Mar. 6, 2009) (Carlo, Deasy, Kornreich) (Because debtor failed to provide hearing transcript on appeal, BAP affirms holding that balloon payment of mortgage in 36th month violates § 1325(a)(5)(B)(iii)(I).).
Flynn v. Bankowski (In re Flynn), 402 B.R. 437 (B.A.P. 1st Cir. Mar. 6, 2009) (Carlo, Deasy, Kornreich) (Citing In re Szostek, 886 F.2d 1405 (3d Cir. 1989), failure of lienholder to object to balloon payment could be acceptance of plan under § 1325(a)(5)(A) notwithstanding equal-payment requirement in § 1325(a)(5)(B)(iii)(I); remand necessary because appellate record is insufficient to determine whether notice was adequate to support acceptance by silence.).
Bell v. Bankowski (In re Bell), No. MB 08-052, 2009 WL 8466783, at *2 (B.A.P. 1st Cir. Mar. 6, 2009) (unpublished) (Carlo, Deasy, Kornreich) (Monthly payments that mimic 30-year amortization of debt secured by multi-family dwelling were "periodic" for purposes of § 1325(a)(5)(B)(iii)(I), and balloon in 36th month violated equal-payment requirement. "By its very terms, the balloon payment is not equal to the preceding payments and, therefore, the plan fails to comply with § 1325(a)(5)(B)(iii)(I).").
In re Enders, No. 15-21737-GMH, 2015 WL 5772199, at *3 (E.D. Wis. Sept. 30, 2015) (Halfenger) (Distribution of available funds "pro rata" does not satisfy § 1325(a)(5)(B)(iii)(I) requirement that periodic payments to a car lender must be in equal amounts. "[Section] 1325(a)(5)(B)(iii)(I) requires that a plan's periodic payments to secured creditors be in equal monthly amounts. . . . [T]he plan's proposed pro rata payments to CAC will not be in equal monthly amounts, CAC does not accept that treatment, and the plan does not provide for surrender of the collateral. . . . [I]t cannot be confirmed.").
Ehiorobo v. Talmer Bank & Trust, No. 15-C-0169, 2015 WL 3936936, at *3 (E.D. Wis. June 26, 2015) (Adelman) (Monthly deposits into an escrow account together with a balloon payment in the 35th and 59th months of the plan do not satisfy the equal-monthly-payment requirement in § 1325(a)(5)(B)(iii)(I). Plan proposed to make balloon payments in the 35th and 59th month on mortgages secured by the debtor's home and rental properties. Along the way, the debtor would make monthly deposits into an escrow account that could be used to make the balloon payments or would be available to the mortgagee in the event of a default. "[I]nterpreting 'payment' to exclude the debtor's proposed escrow deposits would lead to an absurd result—namely, that a plan would not comply with the equal-monthly-amounts requirement if it proposed monthly payments directly to the creditor along with a balloon payment, but it would comply with that requirement if it proposed the same arrangement except that the creditors are deprived of the use of the monthly payments until some future date. . . . I can think of no reason why Congress would have wanted to allow the debtor to make the escrow deposits but prohibit him from paying the same monthly amounts directly to the creditors."), aff'g No. 13-24713-svk, 2015 WL 394363, at *2-*3 (Bankr. E.D. Wis. Jan. 29, 2015) (Kelley) (Equal-payments requirement in § 1325(a)(5)(B)(iii)(I) prohibits plan that would make monthly payments into escrow account with balloon payments in 35th and 59th months. "The Debtor's argument hinges on the literal use of the word 'payments' found in § 1325(a)(5)(B)(iii)(I), noting that a 'payment' must be tendered and accepted . . . . [T]he Debtor's plan calls for escrowing funds, which do not qualify as 'payments' under the Debtor's definition. . . . [C]ourts considering the 'equal monthly payments' requirement have overwhelmingly agreed that delayed balloon payments are prohibited unless the creditor consents. . . . Whether the money paid by the Debtor is called a payment, adequate protection, or escrow funds, the concept violates the purpose of the statutory provision. . . . [A]bsent creditor consent, a plan featuring a delayed balloon payment simply cannot be confirmed, regardless of whether the debtor makes monthly adequate protection payments or pays monthly amounts into an escrow account.").
Daimlerchrysler Fin. Servs Ams., LLC v. Rivera (In re Rivera), Nos. 07-11996, 1:08-CV-21-TS, 2008 WL 1957896, at *5 (N.D. Ind. May 2, 2008) (Springmann) (Plan that fails to specify monthly payment to car lender does not satisfy equal-payment or adequate protection requirements in § 1325(a)(5)(B)(iii); not sufficient that plan provided for payment in full of debt with 10% interest but left calculation of actual monthly distribution to trustee's "practice of administering" cases. "[T]he proposed plan contemplates periodic payments to the Appellant on an allowed secured claim . . . . However, the amount of those payments is not specifically set forth. Instead, it was left to the discretion of the trustee to make periodic payments to the Appellant. Thus, the plan does not provide that the trustee's distributions to the holder of the allowed secured claim be in 'equal monthly amounts.' . . . Nothing in the current plan would prevent the trustee from backloading payments to the Appellant or from making disbursements other than on a monthly basis. . . . [T]hat payments need not extend over the entire life of the plan does not explain or justify the complete absence of equal monthly payments in their proposed plan. . . . That the trustee may make distributions to the Appellant on a monthly basis because that is the trustee's 'practice of administrating' cases does not guarantee such. . . . Nor does it guarantee equal payments. . . . [U]nless the amount is provided in the plan, the abuses the BAPCPA was enacted to address are still possible.").
In re Shelton, No. 17bk35941, 2018 WL 4404631, at *4–*16 (Bankr. N.D. Ill. Sept. 14, 2018) (Barnes) (“Step” plan that would pay lower adequate protection payments to secured creditor for several months then larger payments that amortize the debt for the balance of the plan—when effect is to free up funds for payment of attorney fees—violates § 1325(a)(5)(B)(iii)(I) and lacks good faith under § 1325(a)(3). Silence from secured creditor is not acceptance of plan that violates § 1325(a)(5)(B)(iii)(I) when trustee objects on secured creditor’s behalf and debtor does not otherwise supply an affirmative acceptance of the plan by the creditor. Trustee has standing and duty to raise § 1325(a)(5)(B)(iii)(I) objection on behalf of secured creditor under § 1302(b) and in light of United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 130 S. Ct. 1367, 176 L. Ed. 2d 158 (Mar. 23, 2010). “Step plans are plans that set artificially low payments to secured creditors for a period of time . . . . [T]he lower initial amount theoretically frees up funds to pay the debtor’s counsel . . . . After counsel fees are paid, the amount paid to the secured creditors increases. . . . When investigating acceptance, one case appears to be central . . . Andrews v. Loheit (In re Andrews), 49 F.3d 1404, 1408 (9th Cir. [Mar. 8, 1995) (Tang, O’Scannlain, Merhige)]. . . . Andrews is unpersuasive . . . . Equating lack of objections, preclusion, or waiver with acceptance is . . . wrong on a number of levels. . . . [I]n chapter 13, objections and acceptances are not the same. . . . Debtor has the burden of demonstrating acceptance. Forcing a creditor to object to preserve its rights removes that burden from the Debtor. . . . [H]olding that the failure to object to a potentially defective plan provision equates to acceptance of that provision runs contrary to the Supreme Court’s ruling in United Student Aid Funds, Inc. v. Espinosa . . . . Espinosa’s preclusive decision but stern warnings to the court of its obligation to review plans and admonition that creditors need not object to be protected by the Bankruptcy Code, makes that even where preclusion applies, the court must fulfill its obligation to ensure plan provisions are actually met. Andrews was in error when relied on preclusion to conclude that the failure to object equates to acceptance. . . . Debtor here has intentionally proposed a plan inconsistent with section 1325(a)(5)(B)(iii)(I) and, rather than affirmatively seek acceptance by the affected secured creditors, has lain in wait to see if the creditor objects. Thus while silence might equal acceptance of a chapter 13 plan generally, it is difficult to find it so under the facts at bar. It is even more difficult to do so in light of the Objection from the Chapter 13 Trustee. . . . [A] chapter 13 trustee is permitted to stand in the shoes of creditors—including secured creditors—provided those creditors are not standing in those shoes themselves. . . . [W]hen a plan provision is proposed in clear contravention of both the express language and purpose of section 1325(a)(5)(B)(iii)(I) for the sole reason to manipulate payments to parties to benefit a debtor’s attorney, holding a creditor to a higher standard of actual, express acceptance is appropriate.”).
In re Miceli, 587 B.R. 492, 496–501 (Bankr. N.D. Ill. July 9, 2018) (Lynch) (Rejecting In re DeSardi, 340 B.R. 790 (Bankr. S.D. Tex. Apr. 21, 2006) (Isgur), plan that pays attorney fees in full before payments begin to cure prepetition mortgage arrearage violates equal-monthly-installment requirement in § 1325(a)(5)(B)(iii)(I). “The plan proposes to pay Associated Bank only its current monthly contractual payment . . . for the first 8 or 9 months, after which the monthly distribution will bump up . . . for the remainder of the plan . . . . Courts are divided whether a Chapter 13 plan can provide for such a two-step repayment arrangement for paying off attorneys’ fees without the secured creditor’s consent. . . . Periodic payments to a secured creditor under a Chapter 13 plan in an amount necessary to protect the creditor’s interest in depreciating collateral are ‘periodic payments’ as such term is used in section 1325(a)(5)(B)(iii)(I). Labeling them as ‘adequate protection’ does not change that result . . . . Regardless of the label affixed to the ‘current contractual installment payments’ and the ‘arrearage’ . . . they, too, are periodic payments within the meaning of the statute. Section 1325(a)(5)(B)(iii) requires the total monthly payments on such claim—regardless of label and regardless of whether through the trustee or direct—to be in equal amounts unless the creditor consents to different treatment. . . . The plain language of section 1325(a)(5)(B)(iii)(I) prevents expedited repayment of attorney’s fees through a plan if the result is unequal periodic payment to a secured creditor without its consent.”).
In re Benedicto, 587 B.R. 573, 574–78 (Bankr. S.D. Fla. June 29, 2018) (Mark) (Balloon payment of mortgage violates equal-installments requirement in § 1325(a)(5)(B)(iii)(I). “Both Chief Judge Isicoff and Judge Mark . . . agree . . . and adopt the majority view that balloon payments are non-conforming periodic payments prohibited by § 1325(a)(5). . . . The majority of courts that have considered the issue have ruled that section 1325 of the Bankruptcy Code bars confirmation of balloon-payment plans in chapter 13 cases. . . . Bankruptcy Judge Carter issued a recent and thoughtful opinion, In re Cochran, 555 B.R. 892 [(Bankr. M.D. Ga. Sept. 1, 2016) (Carter)], concluding that balloon payments are not periodic payments that violate the ‘equal monthly payment’ mandate of section 1325. . . . There simply is no clear path for concluding that the final monthly payment is not a periodic payment. If a debtor proposes to pay its lender a fixed sum in monthly payments, the monthly payments must be in equal amounts. To find that the final payment is not recurring, and therefore is not periodic, is a stretch. . . . [T]he final payment will never be ‘recurring,’ but it is still the last in a series of ‘periodic’ payments and, therefore, must be equal in amount to the preceding payments. . . . [T]he ‘equal monthly payment’ amendment was intended to apply to all secured creditors, not just those creditors, like car lenders, who are secured by depreciating personal property. . . . [T]he Court’s ruling in these cases is limited. Equal monthly payments are not required any earlier than the first payment after confirmation. If a modified plan is approved, the payments to secured creditors must be in equal amounts after the modified plan takes effect, but need not be in the same amount as the payments already made under the prior plan.”).
In re Amaya, 585 B.R. 403, 407–09 (Bankr. S.D. Tex. Apr. 11, 2018) (Rodriguez) (Citing In re DeSardi, 340 B.R. 790, 808 (Bankr. S.D. Tex. Apr. 21, 2006) (Isgur), plan that pays $1,100 per month to trustee for two months and then $1,200 per month to trustee for 58 months with “pro rata” distribution to secured creditors after administrative expenses are paid in full satisfies equal-monthly-installments requirement in § 1325(a)(5)(B)(iii)(I). Equal-payments requirement is measured against debtor’s payments to the trustee, not against the distribution waterfall used by the trustee to first pay administrative expenses in full. Code prefers administrative claims over secured claims in the order of distribution. “The plain language of § 1326(b) requires full payment of administrative claims prior to—or simultaneously with—payments to other creditors; whereas, the plain language of § 1325(a)(5)(B)(iii)(I) does not include a requirement for equal payments to begin in the first month of the plan. . . . Debtor’s Plan does not violate § 1325(a)(5)(B)(iii)(I) because it explicitly provides for pro rata payments to be made from months one through fifty-eight. . . . Although secured creditors are required to receive ‘equal monthly payments,’ a plan that provides for ‘periodic “pro rata” payments does not necessarily result’ in a violation of § 1325. . . . Courts following the reasoning of DeSardi have noted that § 1325(a)(5)(B)(iii) only requires a debtor ‘to make equal monthly payments to the plan, . . . not to a particular creditor.’ . . . A debtor submits the monthly plan payments to the chapter 13 trustee, who in turn distributes those funds to the debtor’s creditors. . . . Debtor’s proposal to continue making equal monthly payments of $1,100.00 and $1,200.00, respectively, to the same creditors throughout the life of the Plan satisfies Debtor’s duty to make equal monthly payments pursuant to § 1325(a)(5)(B)(iii)(I).”).
In re Williams, 583 B.R. 453, 457–58 (Bankr. N.D. Ill. Apr. 10, 2018) (Hunt) (Acknowledging split of authority, equal-payment requirement in § 1325(a)(5)(B)(iii)(I) prohibits confirmation of plan that pays attorney fees by reducing payment of car note until attorney fees are paid and then increasing car note for remainder of plan. “[T]here is no basis in the statute for finding that § 1326(b)(1) trumps the right of an objecting secured creditor to equal payments under § 1325(a)(5)(B). . . . [I]n instances where both §§ 1325(a)(5)(B) and 1326(b)(1) apply, debtors ‘need to calculate plan payments sufficient to provide for these payments and for payment of attorney fees and other administrative expenses.’ . . . [S]ubsections I and II of § 1325(a)(5)(B)(iii) are joined by ‘and,’ which indicates both provisions must be satisfied. In other words, ‘the plan must provide for [objecting secured] creditors to receive equal monthly payments beginning with the first distribution post-confirmation and the payment amount must be sufficient to provide adequate protection during the period of the plan.’ . . . [T]he Debtor cannot merely continue pre-confirmation adequate protection under § 1326(a)(1)(C) as post-confirmation payments under § 1325(a)(5)(B)(iii), if doing so will lead to unequal payments on a secured claim. . . . [T]his court can find no support for the holding . . . that the term ‘equal monthly amounts’ in § 1325(a)(5)(B)(iii) references payments to the trustee, as opposed to a creditor. . . . [B]ecause the plan proposes to pay Ford a lesser amount until debtor’s attorney’s fees are paid in full and Ford has not accepted this treatment, the plan does not comply with § 1325(a)(5)(B)(iii).”).
In re Carr, 584 B.R. 268 (Bankr. N.D. Ill. Apr. 10, 2018) (Thorne) (Failure of car lender to object to confirmation was acceptance of plan that paid attorney fees in advance of car loan with effect that car lender received only adequate protection payments for several months after confirmation before equal installments began in a different amount. Payment of attorney fees ahead of car lenders was fee agreement that must be in writing and disclosed under Bankruptcy Rule 2016 when effect is to expose debtors to additional risk in event of early plan failure.), correcting and superseding 583 B.R. 458 (Bankr. N.D. Ill. Apr. 10, 2018) (Thorne) (Absent objection from car lenders, plans can be confirmed that provide payment to attorneys with same priority as car lenders notwithstanding that result may be unequal payments to car lenders during early months after confirmation. Lenders’ silence is acceptance without reaching equal-installments issue under § 1325(a)(5)(B)(iii)(I). Not lack of good faith for plan to pay attorney fees ahead of other creditors in manner permitted by § 1326(b)(1). Attorneys must disclose to Chapter 13 debtors that payment of attorney fees ahead of car lenders in early stages of Chapter 13 case could put debtor in jeopardy of losing car if plan fails before payments to car lenders are caught up.).
In re Jenison, No. 5:17-bk-72283, 2017 WL 10742575, at *2 (Bankr. W.D. Ark. Dec. 27, 2017) (Barry) (Balloon payment of real estate mortgage in 60th month does not satisfy equal-monthly-payment requirement in § 1325(a)(5)(B)(iii)(I). That short-term mortgage could be dealt with under § 1322(c) does not rescue plan because equal-payment requirement still applies in absence of consent or surrender. “Because the loan . . . becomes due prior to the date on which the final payment under the plan is due, the debtor is permitted to modify the rights of United Bank in compliance with § 1322(c)(2) by proposing to pay the bank’s loan in full under her plan. . . . [B]y proposing to make a balloon payment by refinancing or selling the property before the 60-month commitment period ends, the debtor is not proposing a plan that pays the bank in equal monthly amounts.”).
In re Davenport, No. 15-00540, 2017 WL 4011012, at *5–*8 (Bankr. D.D.C. Sept. 11, 2017) (unpublished) (Teel) (Applying § 1322(c)(2) and Witt v. United Cos. Lending Corp. (In re Witt), 113 F.3d 508 (4th Cir. May 21, 1997) (Russell, Michael, Motz), confirmed plan can pay mortgage that matured a year after petition by paying equal monthly installments of principal and interest, fully amortizing balance due over life of plan. Mortgagee is required by confirmed plan to apply installments to interest and attorney fees with any net to reduce principal, notwithstanding note provision that would only allow a lump-sum payment of principal. Confirmed plan permissibly modifies fully matured balloon note to pay principal in installments with interest over life of plan. “Congress amended the Bankruptcy Code to allow for modification of secured claims protected by § 1322(b)(2) if the final payment of the secured claim became ‘due before the date on which the final payment under the plan is due.’ 11 U.S.C. § 1322(c)(2). The purpose of this amendment was to help debtors who were unable under § 1322(b)(2) to cure stub or short-term mortgages that matured or ballooned prior [to] the filing of a petition. . . . A modification under § 1322(c)(2) must follow the restrictions laid out in § 1325(a)(5). A plan under chapter 13 that provides for periodic payments on allowed secured claims must distribute such payments ‘in equal monthly amounts.’ 11 U.S.C. § 1325(a)(5)(B)(iii)(I). . . . [C]reditors may apply plan payments to all costs, interest, and principal as they choose. However, there are limits to the creditors’ discretion. . . . Under 11 U.S.C. § 1325(a)(5)(B)(iii)(I), the plan permissibly called for equal monthly payments of the debt, and after satisfaction of the non-principal amounts that had been incurred the balance of the payment must be treated as payment of principal. . . . 11 U.S.C. § 1322(c)(2) permitted this type of modification. . . . [T]he Note matured on September 22, 2016 . . . . This due date is before November 13, 2020 (60 months after the plan payments were required to commence under § 1326(a)(1)) when the final payment under the plan would be due. . . . This is the exact kind of situation § 1322(c)(2) was designed for and by its express language § 1322(c)(2) overrides the anti-modification provision of § 1322(b)(2). . . . The debtor does not need to make a full lump payment on the principal to pay the ‘full amount of the allowed secured claim.’ . . . [T]he creditors’ right under the Note and Deed to receive a lump payment on principal has been modified by the plan in accordance with § 1322(c)(2), and allows for the debtor to pay monthly payments on principal, removing the creditors’ right to a lump payment.”).
In re Cochran, 555 B.R. 892, 896-904 (Bankr. M.D. Ga. Sept. 1, 2016) (Carter) (Because a balloon payment is not a “periodic” payment, plan can make adequate protection payments for 12 months and then pay balance of secured debt in full as a single balloon payment without violating § 1325(a)(5)(B)(iii)(I). Plan proposed to make $2,500 adequate protection payments for 12 months and then to pay $650,000 balance of real estate–secured claim in full within 12 months after confirmation. “[A]n overwhelming majority of reported decisions . . . take the position that § 1325(a)(5)(B)(iii)(I) proscribes confirmation of a plan with a balloon payment on a secured claim following a stream of periodic payments. . . . The Court disagrees with this conclusion. A balloon payment satisfies the debt in full, and thus by definition cannot be repeated periodically, whether in equal amounts or otherwise. Because ‘periodic’ payments are regularly reoccurring and balloon payments are not, balloon payments are not ‘property to be distributed . . . in the form of periodic payments’ and, consequently, are outside the scope of § 1325(a)(5)(B)(iii)(I). . . . [I]t is only the periodic payments—and not the balloon payment—that are subject to the ‘equal monthly amounts’ directive of § 1325(a)(5)(B)(iii)(I). . . . [C]ases prohibiting balloon payments as contrary to the history or purpose of § 1325(a)(5)(B)(iii)(I) do so based on unsupported judicial speculation, rather than formal legislative history. . . . [C]onfirmation of feasible Chapter 13 plans providing for a series of payments on a secured claim followed by and culminating with a balloon payment was a regular feature of pre-BAPCPA practice. Neither the statutory language nor the legislative history indicates that Congress intended to depart from this prior practice by enacting § 1325(a)(5)(B)(iii)(I).”).
In re Romero, No. 15-26763-svk, 2015 WL 5920322 (Bankr. E.D. Wis. Oct. 9, 2015) (Kelley) (Plan that would pay adequate protection of $75 per month until attorney fees are paid and then $122 per month until secured claim is paid violates equal-installments requirement in § 1325(a)(5)(B)(iii)(I).).
In re Hernandez, No. 14-12231-BKC-LMI, 2015 WL 5554126, at *1, *3-*4 (Bankr. S.D. Fla. Sept. 18, 2015) (Isicoff) ("[S]ection 1325(a)(5)(B)(iii)(I) requires that equal monthly payments begin not from the first payment to the chapter 13 trustee, but rather, no earlier than the first payment due after the chapter 13 plan is confirmed." Contrasting In re DeSardi, 340 B.R. 790 (Bankr. S.D. Tex. Apr. 21, 2006) (Isgur), with In re Denton, 370 B.R. 441 (Bankr. S.D. Ga. June 12, 2007) (Dalis), "neither DeSardi nor Denton nor any of the cases following either has found that the equal monthly payment requirement begins earlier than the first post-confirmation payment. . . . As for which of DeSardi or Denton is the correct interpretation . . . I do not need to reach that issue in this case. The [plan] has not been confirmed yet and this case is in month 18 or 19. The [plan] proposes equal payments starting in month 10. Accordingly, it is not necessary . . . for me to decide which of DeSardi or Denton I should follow.").
In re Freire, No. 13-27437-BKC-AJC, 2015 WL 4600481, at *1 (Bankr. S.D. Fla. July 29, 2015) (Cristol) (Distinguishing In re Ramirez, No. 13-20891-AJC, 2014 WL 1466212 (Bankr. S.D. Fla. Apr. 7, 2014) (Cristol), and notwithstanding equal-payment requirement in § 1325(a)(5)(B)(iii)(I), balloon payment not allowed because there is no cramdown of the mortgage in this case and debtor presented no evidence to satisfy "more stringent" evidence standard with respect to ability to pay balloon. "[B]alloon payments may be allowed in the final month of a plan if the balloon payment is feasible. . . . [T]here is no cramdown in this case and, therefore, the more stringent standard requiring 'credible and definite evidence' of the Debtor's ability to repay the balloon applies, as there is an increased potential for abuse when no cramdown is involved. The Debtor has presented no evidence of how she intends to repay the balloon payment and her current income is insufficient to meet this obligation.").
In re Soppick, 516 B.R. 733 (Bankr. E.D. Pa. Aug. 28, 2014) (Fox) (Citing Hamilton v. Wells Fargo Bank, N.A. (In re Hamilton), 401 B.R. 539 (B.A.P. 1st Cir. Mar. 6, 2009) (Carlo, Deasy, Kornreich), gradually increasing periodic payments plus a lump-sum payment from pending state court action ran afoul of § 1325(a)(5)(B)(iii)(I).).
In re Spark, 509 B.R. 728, 729-30 (Bankr. M.D. Fla. May 5, 2014) (Williamson) (Equal-payments requirement in § 1325(a)(5)(B) prohibits confirmation of plan that pays 59 monthly installments and then a balloon payment of balance of mortgage on non-homestead property. "[A] balloon payment is, by definition, not an 'equal monthly payment.' And the overwhelming majority of courts . . . have held that a balloon payment runs afoul of the plain terms of § 1325. . . . When Congress passed BAPCPA in 2005, it added the "equal monthly amounts" language to § 1325 to prevent debtors from making balloon payments.").
In re Cupolo, No. 12-51633, 2013 WL 486338, at *3 (Bankr. E.D. Ky. Feb. 5, 2013) (Schaaf) (Mortgage that matured before petition cannot be paid in lump sum by refinancing after effective date of plan; when debtor can't make equal monthly payments sufficient to pay mortgage in full in 60 months, stay relief is warranted. "[T]he Plan cannot be confirmed with a lump sum payment due after the effective date. . . . [A]ny cure must be paid within 60 months because the note matured pre-petition. . . . [§] 1322(c)(1) . . . . The required equal monthly payments would be in excess of $3,500.00 per month. This the Debtor cannot do. . . . Debtor cannot present a feasible plan that includes periodic payments of the Bank's claim. Accordingly, cause exists to modify the stay[.]").
In re Nguyen, No. 11-35979-rld13, 2012 WL 1110022, at *2 (Bankr. D. Or. Apr. 2, 2012) (Dunn) (Equal-monthly-payment requirement in § 1325(a)(5)(B)(iii)(I) applies to real property and precludes balloon-payment plan that pays real estate-secured claim through sale or refinance. "I read § 1325(a)(5)(B)(iii)(II) to impose the additional condition of providing adequate protection when the collateral involved is personal property, not to reach back to eliminate the requirement for equal monthly payments as to real property collateral. Had Congress intended [that] result . . . , it could easily have drafted § 1325(a)(5)(B)(iii) to begin not by the single word 'if,' but by the phrase 'if the holder of the claim is secured by personal property. . . .'").
In re Holliday, No. 11-62315-13, 2012 WL 601926, at *4 (Bankr. D. Mont. Feb. 23, 2012) (Kirscher) (Plan that would sell home to pay creditors but made no payments to personal property secured creditors for two years did not satisfy equal-monthly-payment requirement. Although § 1325(a)(5)(B)(iii)(I) "does not appear to preclude a plan from providing single lump sum payments," delaying payment to secured creditors pending sale of home was not confirmable.).
In re Kirk, 465 B.R. 300, 303-07 (Bankr. N.D. Ala. Jan. 23, 2012) (Robinson) (Car lender must be paid in equal monthly installments that begin with first distribution after confirmation; secured debt cannot be deferred to payment of administrative expenses. "[I]f an allowed secured claim . . . is to be paid with periodic payments . . . those payments must be in equal amounts and paid monthly, and . . . payments must begin with the first disbursement by the trustee following confirmation. . . . Any notion that continuing § 1326(a)(1)(C) adequate protection payments post confirmation will satisfy § 1325(a)(5)(B)(iii)(I), when the adequate protection payments are less than the monthly amount of plan payments on the secured claim, completely ignores the plain language of the Code. . . . [S]taggering payments to secured claimants post-confirmation to allow attorney's fees and other administrative expenses to be more rapidly paid is not permissible under the statutory framework . . . . [T]he plan must provide for such creditors to receive equal monthly payments beginning with the first distribution post-confirmation and the payment amount must be sufficient to provide adequate protection during the period of the plan. . . . [I]f not paid before, the administrative fees may be paid contemporaneously with 'each payment' to creditors under the plan, and if those creditors being paid contemporaneously hold secured claims, nothing in § 1326(b)(1) carves out an exception to the requirement mandated by § 1325(a)(5)(B)(iii)(I) that they be paid in equal monthly amounts commencing at the effective date—confirmation—of the plan.").
In re Willis, 460 B.R. 784, 785-92 (Bankr. D. Kan. Nov. 14, 2011) (Nugent) (Equal-monthly-installment requirement in § 1325(a)(5)(B)(iii) mandates that periodic payments be equal and begin immediately after confirmation; pro rata distribution to secured creditors is not permitted, and reduced payments while attorneys' fees are paid are not permitted. "In these four cases, the debtors have followed a long-standing practice and proposed that their secured creditors be paid monthly, but in pro-rated amounts based upon the creditors' ratable shares of each monthly disbursement after deduction of the Trustee's fees, the debtors' attorney's fees, and other payments. The Court concludes that proposing pro-rated payments does not meet the 'equal monthly amount' requirement and that where, as here, the affected creditors object to the ratable payments, the plans cannot be confirmed. . . . In [In re DeSardi, 340 B.R. 790 (Bankr. S.D. Tex. Apr. 21, 2006) (Isgur)], the court held that the equal monthly amount clause only requires that payments to a creditor be equal once they begin and must continue to be equal until they cease and that the clause does not apply to adequate protection payments before the equal payment stream commences. . . . The [In re Denton, 370 B.R. 441 (Bankr. S.D. Ga. June 12, 2007) (Dalis),] line of cases holds that the equal monthly amount requirement applies to all post-confirmation recurring payments on allowed secured claims, whether denominated as adequate protection payments or as amortized payments. These courts correctly observe that the 'periodic payments' reference in § 1325(a)(5)(B)(iii)(I) does not distinguish between adequate protection payments and amortized debt payments. . . . The distribution of property in equal monthly amounts referred to in (iii)(I) should begin upon confirmation in order to return to the secured creditor the value of the property securing the claim 'as of the effective date.' And, delay in distributing to secured creditors in order to first accommodate payment of debtor's attorney's fees would ignore § 1326(a)(2)'s requirement that upon confirmation of the plan, 'the trustee shall distribute any such payment [the debtor's plan payment to the trustee] in accordance with the plan as soon as is practicable,' along with the further requirement of § 1326(c) that 'except as otherwise provided in the plan or in the order confirming the plan, the trustee shall make payments to creditors under the plan.'").
In re Bollinger, No. 10-62344-fra13, 2011 WL 3882275, at *3-*4 (Bankr. D. Or. Sept. 2, 2011) (Alley) (Section 1325(a)(5)(B)(iii)(I) requirement that periodic payments be in equal monthly amounts prohibits balloon payment by sale or refinancing of lien on investment property. "[I]t appears every published decision to consider balloon payments in the context at bar has held § 1325(a)(5)(B)(iii)(I) forbids them. . . . [T]he plain language of 11 U.S.C. § 1325(a)(5)(B)(iii)(I) requires repayment plans to secured creditors to provide for equal periodic payments, which necessarily excludes balloon payments. The prohibition is consistent with the overall policies of Chapter 13 and the Bankruptcy Code, and cannot be seen as absurd or anomalous.").
In re Redden, No. 10-38954-H3-13, 2011 WL 2292312 (Bankr. S.D. Tex. June 7, 2011) (Paul) (Although § 1322(c)(2) permits modification of mortgage that matured prepetition, balloon payment plan failed to satisfy equal monthly payment requirement in § 1325(a)(5)(B).).
In re LaVictoire, Nos. 10-10076, 10-10325, 2011 WL 1168288 (Bankr. D. Vt. Mar. 29, 2011) (unpublished) (Brown) (Confirmations were denied mother and son plans in separate cases when court could not determine whether equal-payment requirement in § 1325(a)(5)(B)(iii)(I) was satisfied. Plans proposed to sell some property but did not specify which property would be sold or how proceeds would be distributed.).
In re Vause, No. 6:09-bk-06224-ABB, 2010 WL 1204534 (Bankr. M.D. Fla. Mar. 16, 2010) (Briskman) (Plan that pays secured portion of modifiable mortgage in 59 monthly payments with balloon in month 60 satisfies equal-monthly-payment requirement in § 1325(a)(5).).
In re Valiquette, No. 09-64167-fra13, 2010 WL 695991, at *3 (Bankr. D. Or. Feb. 24, 2010) (Alley) (Confirmed plan that pays attorney fees before car lender, resulting in five months during which car lender would not receive payments, does not threaten adequate protection, but "if objected to by a creditor[,]" the "stepped-payment" provision would violate equal-monthly-installment requirement in § 1325(a)(5)(B)(iii).).
In re Brennan, 455 B.R. 237, 240-41 (Bankr. M.D. Fla. Dec. 2, 2009) (Briskman) (Debtors can continue preconfirmation payments to car lender for 15 months while attorney fees are paid through confirmed plan and then increase payments to car lender for months 16 through 60 without offending equal-monthly-payment requirement in § 1325(a)(5)(B)(iii)(I). Plan proposed $200 per month to car lender for months 1 through 15 while attorney fees were paid and then $393.88 for months 16 through 60. "The majority of the Bankruptcy Courts have held pre-confirmation adequate protection payments may continue post-petition in one amount and be replaced by a higher amount post-petition after attorneys' fees have been paid. . . . The Debtors' increased payment . . . in month sixteen complies with Sections 1325(a)(5) and 1326(b). No provision of the Bankruptcy Code requires such payment [to] begin on a particular date. . . . The Amended Plan provides for payment in full . . . from distributions of the Debtors' equal monthly Amended Plan payments. The Debtors are not required to make equal monthly payments to a particular creditor.").
In re Cooper, No. 6:08-BK-11960-ABB, 2009 WL 4258301 (Bankr. M.D. Fla. Nov. 17, 2009) (Briskman) (Equal-monthly-payment requirement in § 1325(a)(5)(B)(iii) does not apply when plan cures defaults under § 1322(b)(5). Agreeing with In re Davis, 343 B.R. 326 (Bankr. M.D. Fla. May 3, 2006) (Proctor), when claim secured by nonresidential property can be modified, plan can cure arrearages with 59 monthly payments and balloon payment of balance of allowed secured claim in month 60.).
In re Henning, 420 B.R. 773 (Bankr. W.D. Tenn. Nov. 6, 2009) (Boswell) (Lump-sum payment in 59th month is not equal monthly payments. Plan confirmation followed stay relief to creditor with mortgage that matured before petition. No grounds for reconsideration of stay relief when plan cured mortgage by monthly payments and lump sum in 59th month. Any cure of matured home mortgage must comply with § 1325(a)(5), including equal-payment requirement.).
In re Acosta, No. 08-11411, 2009 WL 2849096, at *1-*3 (Bankr. N.D. Cal. May 7, 2009) (Jaroslovsky) (Plan that pays "adequate protection" to mortgagee for 48 months with refinance between 48 and 60 months fails equal-payments requirement in § 1325(a)(5)(B)(iii)(I). "[B]y proposing a balloon payment at the end, the plan violates the 'equal payments' provision of § 1325(a)(5)(B)(iii)(I) . . . . This provision eliminates the sort of plan the debtors have proposed with 'adequate protection' payments for a few years and a balloon payment at the end. . . . Their argument is that the interest payments are 'adequate protection payments' and not 'periodic payments.' The court declines their invitation to engage in this sophistry; payments are payments.").
In re Hernandez, No. 08 B 72148, 2009 WL 1024621 (Bankr. N.D. Ill. Apr. 14, 2009) (Barbosa) (Equal-monthly-payment requirement in § 1325(a)(5)(B)(i)(II) obligates debtor to make equal monthly payments to the entire plan, not to particular creditors; Chapter 13 trustee is not required to disburse equal monthly payments to each secured creditor because priority claims, including attorney fees, must be paid before or concurrently with other claims.).
In re Butler, 403 B.R. 5 (Bankr. W.D. Ark. Mar. 17, 2009) (Barry) (Plan must propose equal monthly payments to personal-property-secured lender, but equal monthly payments need not begin at confirmation so long as adequate protection payments are made. With respect to equal monthly payments and the payment of administrative expenses: "the trustee is not bound by the equal payment provision of § 1325(a)(5)(B)(iii)—Sections 1322 and 1325 concern the contents of a plan and what a debtor must do to have a plan confirmed." Accordingly, adequate protection payments and administrative expenses are paid before equal monthly payments to a lienholder.).
In re Gray, No. 07-07380-ESL, 2008 WL 5068849 (Bankr. D.P.R. Nov. 25, 2008) (unpublished) (Lamoutte) (Balloon payment of short-term mortgage does not satisfy equal monthly payment requirement of § 1325(a)(5)(B)(iii)(I).).
In re Marks, 394 B.R. 198 (Bankr. N.D. Ill. Sept. 25, 2008) (Cox) (Equal monthly payments for purposes of § 1325(a)(5)(B)(iii) need not begin with first month after confirmation so long as lienholder gets adequate protection payments in the interim. "Requiring Marquette to receive its claim value payment beginning with the first payment and throughout the duration of the plan conflicts with the provision of the Code requiring priority treatment of administrative expenses. . . . Since Marquette is receiving adequate protection payments in the amount of depreciation while the administrative claims are covered, it will not be left holding the bag for any loss in value of the collateral if the plan should later fail or become converted to a chapter 7 case. . . . Debtor is required to make equal monthly payments to the plan by § 1325(a)(5)(B)(iii), not to a particular creditor. . . . [T]he trustee is not obligated to disburse equal monthly payments to the creditor because of the trustee's duty to pay priority claims. . . . There is no requirement in § 1326 that the plan payments to the creditor start in month one.").
In re Correale-Darling, No. 07-14395-WCH, 2008 WL 4057141 (Bankr. D. Mass. Aug. 25, 2008) (Hillman) (Plan that pays secured creditor in periodic payments with lump sum in final month violates equal monthly payment requirement in § 1325(a)(5)(B)(iii)(I).).
In re Espinoza, No. 08-20778, 2008 WL 2954282, at *4-*5 (Bankr. D. Utah Aug. 1, 2008) (Thurman) ("Step up" plan that pays car lender $200 a month for nine months as adequate protection while attorney fees are paid and then pays $510 per month until car claim is paid in full fails equal payment requirement in § 1325(a)(5)(B)(iii)(I). "This Court is persuaded by the reasoning of [In re Denton, 370 B.R. 441 (Bankr. S.D. Ga. 2007),] and [In re Sanchez, 384 B.R. 574 (Bankr. D. Or. 2008)]. The language of § 1325(a)(5)(B)(iii) clearly requires that periodic payments to a creditor on an allowed secured claim be in equal monthly amounts and the payment amounts be sufficient to provide adequate protection during the period of the plan. The term 'periodic payments' refers to all regularly-recurring post-confirmation payments to be made to secured creditors[.] . . . It follows that, unless [the creditor] agrees otherwise, it must receive equal monthly payments beginning with the first post-confirmation distribution and continuing until its claim is paid in full. . . . '[T]wo-tiered' payment plan, in which post-confirmation payments characterized as 'adequate protection payments' are less than the payments characterized as 'periodic monthly payments,' is inconsistent with the requirements of § 1325(a)(5)(B)(iii)(I).").
In re Carman, No. 07-44271-JBR, 2008 WL 2909863, at *1 (Bankr. D. Mass. July 25, 2008) (unpublished) (Rosenthal) (Mortgage payments of Interest only with lump sum payment at end of plan violates § 1325(a)(5)(A)(iii)(I). Although mortgage on nonresidential property may be modified, once periodic interest payments commence, "'subsequent balloon payment would be unequal to those that preceded it.[']".).
In re Melillo, 385 B.R. 476 (Bankr. D. Mass. Apr. 8, 2008) (Hillman) (Rejecting In re Davis, 343 B.R. 326 (Bankr. M.D. Fla. 2006), equal-monthly-installments requirement in § 1325(a)(5)(B)(iii)(I) applies to curing of defaults under § 1322(b)(5); balloon payment from sale or refinancing not permitted by § 1325(a)(5)(B)(iii)(I). "I understand 11 U.S.C. § 1325(a)(5)(B)(iii)(I) to require that a plan providing for periodic payments to a secured creditor have payments in an equal amounts [sic] from the time they begin until the time they cease. . . . [O]nce periodic payments to [a] creditor commence, a subsequent balloon payment would be unequal to those that preceded it. . . . While 11 U.S.C. § 1322(e) supercedes 11 U.S.C. § 1325(a)(5)(B)(ii) with respect to the amount necessary to cure the default, there is nothing in that provision to suggest that it renders 11 U.S.C. § 1325(a)(5) completely inapplicable when arrears on a long term debt are cured through the plan. . . . It is irrelevant that the Debtors seek only to cure their arrears through their respective plans, as the payments remain periodic payments made to secured creditors.").
In re Williams, 385 B.R. 468 (Bankr. S.D. Ga. Mar. 28, 2008) (Barrett) (Absent consent, equal-payment requirement in § 1325(a)(5)(B)(iii)(I) must begin at confirmation; plan cannot continue paying adequate protection after confirmation when adequate protection payment is less than amount necessary to satisfy secured creditor under § 1325(a)(5). "I agree with the [In re Denton, 370 B.R. 441 (Bankr. S.D. Ga. 2007),] analysis. The term 'periodic payments' refers to all recurring post-confirmation payments to be made to secured creditors . . . . Unless the creditor agrees otherwise, the plan must provide for such creditors to receive equal monthly payments beginning with the first distribution post-confirmation and the payment amount must be sufficient to provide adequate protection during the period of the plan.").
In re Chavez, No. 07-36007-H3-13, 2008 WL 624566, at *2 (Bankr. S.D. Tex. Mar. 5, 2008) (Letitia Clark) ("Pro rata" satisfies equal-monthly-payments requirement when there are six creditors that will be paid pro rata and the amount of money that will be paid by the debtor is constant. Plan provided for payment of attorney fees beginning in month one and ending in month three. Six claimants, including DaimlerChrysler, would be paid "pro rata" over months 3 to 48. "Because the monthly plan payment and the fixed amounts to be deducted therefrom remain the same throughout these months, the remaining amount for distribution to the 'pro rata' claimants is the same amount each month. . . . [T]he number of claimants sharing in the remaining amount available for distribution does not change during this period. Thus, payment on a pro rata basis would result in payment to each 'pro rata' claimant, including DaimlerChrysler, in an equal amount each month.").
In re Lucier, No. 07-30658, 2007 WL 4868323, at *3 (Bankr. D.N.D. Dec. 5, 2007) (Hill) (Plan proposing "$214.53 Avg." per month to car lender cannot be confirmed. "Section 1325(a)(5)(B)(iii)(I) provides that property distributed in the form of periodic payments shall be in equal monthly payments. Accordingly, Debtors may not propose an average monthly payment.").
In re Lee, No. 07-26758-D-13L, 2007 WL 4166563 (Bankr. E.D. Cal. Nov. 19, 2007) (unpublished) (Section 1325(a)(5) as amended by BAPCPA does not require that payments to creditors begin in first month of plan, but only requires equal monthly payments after payments begin.).
In re Wallace, Nos. 07-10729, 07-10728, 2007 WL 3531551 (Bankr. M.D.N.C. Nov. 12, 2007) (Waldrep) (To satisfy § 1325(a)(5)(B)(iii), plan that pays real estate-secured creditor in installments must provide for equal payments. Proposed plan paid bank $2,000 a month until April 2012 and a lump-sum payment of the balance in May 2012. "As required by Section 1325(a)(5)(B)(iii) . . . upon the objection of a creditor secured by real property, a proposed Chapter 13 plan must provide for periodic payments in 'equal monthly amounts' on the debt secured by that real property. . . . A plan that provides for a balloon payment to a creditor secured by real property, over the objection of a creditor, is not confirmable.").
In re Luckett, No. 07-24706-SVK, 2007 WL 3125278, at *1-*2 (Bankr. E.D. Wis. Oct. 24, 2007) (Monthly adequate protection payments to mortgage holder followed by one balloon payment do not constitute periodic payments for purposes of § 1325(a)(5)(B)(iii)(I). "[A] plan that proposes adequate protection payments to a creditor secured by non-depreciating collateral for a 35 month period and then a lump sum to pay off the balance of the claim in the 36th month violates the equal monthly payment requirement . . . . Calling the property distributed on the claim 'adequate protection payments' does not change the fact that this is property distributed on the claim. If made over time, the distributions of the property on the claim must be in equal monthly amounts, and, unless AMC consents, the balloon payment at the end of the Plan will not satisfy this requirement.").
In re Erwin, 376 B.R. 897, 901-03 (Bankr. C.D. Ill. Oct. 1, 2007) (Pro rata payments to secured creditors from amount available after payment of attorney fees satisfies equal-payment requirement in § 1325(a)(5)(B)(iii)(I) notwithstanding that payments to secured creditors will not be exactly equal in every month; equal-payment requirement applies to plan and debtor but not to trustee. Plan provided that debtors would pay trustee $875 per month for 60 months and that after payment of priority attorney fees, secured creditors would receive "pro-rata payments set forth by the Trustee." "The equal payment provision prevents debtors from backloading payments to secured creditors or paying them other than on a monthly basis. . . . [T]he accelerated payment of debtors' attorney fees was not intended to be precluded by the equal payment provision . . . . The specific terms of a confirmed plan are binding on the debtor and each creditor, but not on the trustee. . . . Since the equal payment provision was added to Section 1325, not Section 1326, . . . it serves as a restriction on how debtors may propose payments, not as a directive as to how trustees must make payments. . . . The DEBTORS will pay $875.00 each and every month for sixty months. Since the DEBTORS are making level payments for the entire term of the Amended Plan, and AFS will be paid prorata [sic], the proposed treatment of AFS's claim is for payments that are equal in amount. While it is true that the amount of the monthly payments to AFS will increase once the DEBTORS' attorney fees are fully paid, that increase does not result from the terms of the Amended Plan. Rather, the increase results from the Court's Standing Order and the operation of Section 1326(b)(1). . . . The Amended Plan provides that AFS will be paid a proportional share of the DEBTORS' payments which are equal in amount for the entire sixty-month term of the plan. Backloading of payments or other abusive payment terms are not present. Therefore, the Amended Plan does not violate the equal payment provision.").
In re Debtors' Attorney Fees in Chapter 13 Cases, 374 B.R. 903, 908 (Bankr. M.D. Fla. Aug. 31, 2007) (In Tampa Division of Middle District of Florida, presumptively reasonable fees are paid before commencement of equal monthly payments pursuant to § 1325(a)(5)(B)(iii)(I) except that motor vehicle lienholder is paid 50% of monthly payment provided in plan at same time as monthly payment toward attorney fees. "[T]he commencement of the equal monthly payments to be paid to holders of secured claims pursuant to § 1325(a)(5)[(B)](iii)(I) shall be deferred and shall not commence until all attorneys fees allowed to the debtor's attorney and entitled to priority under sections 507 and 1326(b)(1) shall have been paid in full; provided however, until such time, the holder of a lien on a motor vehicle shall be paid monthly at the rate of 50 percent of the monthly payment provided in the chapter 13 plan on account of such lien, at the same time that a monthly payment is made toward payment of attorneys fees.").
In re McDonald, 397 B.R. 175 (Bankr. D. Me. Aug. 17, 2007) (Kornreich) (Citing Rake v. Wade, 508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (1993), and notwithstanding § 1322(e), curing mortgage default under § 1322(b)(5) provides for arrearages under § 1325(a)(5) and thus periodic payment of arrearages must be in equal monthly installments under § 1325(a)(5)(B)(iii)(I). Plan paid mortgage arrearages at the rate of $153.15 for 12 months and $179.05 thereafter to allow for payment of attorney fees. "[T]he Supreme Court determined that a provision in a plan for the cure of an arrearage under § 1322(b)(5) was a proposal for modifying a secured claim under § 1325(a)(5). . . . [Section] 1322(e) did nothing to upset Rake's determination that a cure proposal under § 1322(b)(5), with or without interest, is a proposal to modify a secured claim under a plan. As such, it must meet the requirements of § 1325(a)(5). . . . [T]he Debtors' cure proposal . . . fails to meet the test for equal monthly payments under § 1325(a)(5)(B)(iii)(I).).
In re Newberry, No. 07-10170, 2007 WL 2029312 (Bankr. D. Vt. July 10, 2007) (unpublished) (Brown) (Payment of fully matured mortgage with monthly installments of interest only and balloon after completion of plan satisfies § 1322(c)(2) but does not satisfy § 1325(a)(5); amending to move balloon to last month of payments under plan may satisfy full-payment requirement in § 1325(a)(5)(B)(ii) but would still violate equal-monthly-payment requirement in new § 1325(a)(5)(B)(iii)(I).).
In re Porter, 370 B.R. 891, 892-93 (Bankr. M.D. Pa. June 15, 2007) (Plan is in "literal compliance" with § 1325(a)(5)(B)(ii)(I) which provided interest-only payments to trustee but deferred distribution to mortgage holder until 48th month when debtors would either sell or refinance home. "This complied with the literal requirements of [§ 1325(a)(5)(B)(iii)] since only one 'distribution' to the creditors would occur. . . . [T]he Debtors included a provision that [the mortgage holder] could waive the requirements of [§ 1325(a)(5)(B)(iii)] and receive interest only distributions from the Trustee. The Debtors also included a provision in the plan that dismissal of the confirmed bankruptcy would result in the interest-only fund held by the Trustee being released to [mortgage holder] instead of being returned to the Debtors. . . . While literal compliance with § 1325(a)(5) may have been met, I am concerned that the plan may not have been proposed in good faith in compliance with § 1325(a)(3).").
In re Denton, 370 B.R. 441, 445-46 (Bankr. S.D. Ga. June 12, 2007) (Dalis) (Rejecting In re DeSardi, 340 B.R. 790 (Bankr. S.D. Tex. 2006), equal monthly payments must begin in the first month after confirmation and cannot be manipulated to allow for payment of attorney's fees. "The provision in § 1325(a)(5)(B)(iii)(I) that 'such payments shall be in equal monthly amounts' means that all regularly-recurring post-confirmation payments on an allowed secured claim must be in equal monthly amounts. It follows that pre-confirmation adequate protection payments may not be extended beyond the date of confirmation when the monthly amount of the adequate protection payment is less than the monthly amount of payment on the allowed secured claim under the plan. . . . [S]ecured creditors must begin receiving payments in equal monthly amounts beginning with the first payment after confirmation.").
In re Hill, 397 B.R. 259 (Bankr. M.D.N.C. Feb. 12, 2007) (Waldrep) (Equal monthly installments need not begin at confirmation; plan can pay attorney fees concurrently with adequate protection payments and equal monthly payments sufficient to amortize secured debt can begin after payment of attorney fees. "[P]arsing Section 1325(a)(5)(B)(iii)(II) demonstrates that the phrase 'during the period of the plan' modifies 'adequate protection,' not 'such payments.' The language of the statute simply cannot be read to dictate any specific time for the equal monthly payments to begin. . . . [E]qual monthly payments need not begin immediately after confirmation. Once they do begin, they must continue until the creditor is paid in full or the debtor receives a discharge at the end of the plan.").
In re Tonioli, 359 B.R. 814, 818 (Bankr. D. Utah Feb. 5, 2007) (Postconfirmation modification of plan to "abate" delinquent postconfirmation payments ordinarily would violate equal-payment requirement in § 1325(a)(5)(B)(iii); GMAC's silence is acceptance of proposed modification, notwithstanding that court would be required to deny motion to abate had GMAC objected. "The effect of the abatement will be that GMAC, a secured creditor receiving payments under the plan, will not receive equal monthly payments of $303.00 as required by the Court's confirmation order. If GMAC objected to the proposed modification, the Court would be required under §§ 1329(b)(1) and 1325(a)(1)(B)(iii) to deny the Debtor's Motion to Abate.").
In re Schultz, 363 B.R. 902, 906 (Bankr. E.D. Wis. Jan. 12, 2007) (Siding with In re Wagner, 342 B.R. 766 (Bankr. E.D. Tenn. 2006), and rejecting In re Davis, 343 B.R. 326 (Bankr. M.D. Fla. 2006), plan that maintains monthly payments on a long-term mortgage with balance paid from refinancing at end of 60 months fails equal-payment requirement in § 1325(a)(5)(B)(iii)(I); creditor that did not object is deemed to have accepted and plan can be confirmed under § 1325(a)(5)(A). "This court is not persuaded that subsection 1325(a)(5)(B)(iii) does not apply when only a portion of the allowed secured claim, i.e., current payments and the arrearage, are being paid pursuant to the plan. . . . Section 1322(b)(5) just means that the entire secured claim need not be paid in full under certain circumstances allowing cure of default, but the claim is still an allowed secured claim. This court holds that periodic payments must be equal, period. This applies when the default is cured and only current payments and the arrearage are being paid pursuant to the plan pursuant to 11 U.S.C. § 1322(b)(5) and when a long-term or matured debt are paid in full under the plan.").
In re Blevins, No. 06-10978 A 13, 2006 WL 2724153, at *2 (Bankr. E.D. Cal. Sept. 21, 2006) (unpublished) (Equal-monthly-amount requirement in § 1325(a)(5)(B)(iii)(I) is satisfied by plan that begins equal monthly payments after attorney's fees are paid in full. "The phrase 'equal monthly amounts' in § 1325(a)(5)(B) does not require that the equal payments be made over the life of the plan. To interpret the Code in that way . . . would not allow for payments to cease once a creditor had been paid in full.").
In re Lemieux, 347 B.R. 460, 463-64, 465 (Bankr. D. Mass. Aug. 16, 2006) (Feeney) (Although second and third mortgages are "short term" and can be modified consistent with § 1322(c), installments that provide adequate protection for 35 months and a balloon payment in the 36th month of $95,853 by refinancing does not satisfy equal-payment requirement in § 1325(a)(5)(B)(iii)(I). "Because Davis-Mullen's mortgages are payable in October 2006 within the term of the Debtors' proposed plan, the Debtors may modify her secured claims if they satisfy the requirements of § 1325(a)(5)(B). . . . The Debtors propose to make regular monthly payments through their plan . . . . While that sum may be sufficient to provide adequate protection to Davis-Mullen under 11 U.S.C. § 361, the Debtors must make a balloon payment in the sum of $95,853 to satisfy Davis-Mullen's secured claims in order to comply with 11 U.S.C. §§ 1322(c) and 1325(a)(5) because the notes mature in October 2006. The difficulty with the Debtors' proposed treatment of Davis-Mullen's secured claims is the requirement that payments be in equal monthly amounts because they are distributing property to Davis-Mullen in the form of periodic plan payments. The Debtors' plan does not contain provisions for distributions in equal monthly amounts." Although § 1325(a)(5)(B)(iii)(I) may not require that payments be equal in every month of the plan, the debtors "have not tested" that issue in this case, rather "they have proposed a plan with unequal periodic payments that cannot be confirmed because of the plain language of the statute.").
In re Wagner, 342 B.R. 766, 772 (Bankr. E.D. Tenn. May 22, 2006) (Equal-monthly-payment requirement in § 1325(a)(5)(B)(iii)(I) does not permit a balloon payment in the 24th month after confirmation. Plan proposed monthly "maintenance installments" of $728 beginning after confirmation with respect to a lien that survived discharge in a prior Chapter 7 case, with balloon payment ($68,829.49) in 24th month. "[T]o obtain confirmation, the Debtor's plan must provide for equal monthly payments . . . over the life of the plan until the lien claim is satisfied. Such treatment cannot then allow for a balloon payment in the final month.").
In re Davis, 343 B.R. 326, 328 (Bankr. M.D. Fla. May 3, 2006) (Citing Rake v. Wade, 508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (1993), Telfair v. First Union Mortgage Corp., 216 F.3d 1333 (11th Cir. 2000), and the 1994 enactment of § 1322(e), payments to cure arrearages on a long-term debt provided for under § 1322(b)(5) need not be equal because § 1325(a)(5)(B)(ii) does not apply. Plan cured arrearages on a claim secured by a manufactured home in unequal periodic payments of $0 for months 1-10 and $122.23 for months 11-57. "[Rake] held that Chapter 13 debtors who cure a default on an oversecured mortgage under Section 1322(b)(5) must pay postpetition interest on the arrearages pursuant to Section 1325(a)(5) . . . . Since the enactment of Section 1322(e) courts have consistently recognized that the Rake decision was technically overruled, as Section 1322(e) has the effect of overriding Section 1325(a)(5) when arrears on a long term debt are cured. . . . [E]qual monthly payments are not required as the claim at issue is one in which arrears on long term debt are being cured. Thus, Creditor's claim falls outside the ambit of requirements contained under Section 1325(a)(5).").
In re DeSardi, 340 B.R. 790, 805-07 (Bankr. S.D. Tex. Apr. 21, 2006) (Isgur) (Section 1325(a)(5)(B)(iii)(I) does not require that installment payments to a car lender begin in the first month of the petition or that installment payments be the same for every month while the plan is pending; rather, once installment payments begin after confirmation, payments must be equal until the end of the plan or full payment of the claim, whichever occurs first. "The equal payment provision does not state that its requirements must be met beginning in month one of the plan. Nor does the section state that payments must be equal 'as of the effective date of the plan.' . . . The Court understands this clause to require payments to be equal once they begin, and to continue to be equal until they cease. . . . DaimlerChrysler argued that upon the date of confirmation it should receive a lump sum payment equal to the difference between the adequate protection amount and the scheduled plan payments. This . . . would equalize the payments under the plan, fulfilling the equal payment provision. However, the argument fails if the Court applies this logic to adequate protection provided for under a plan. A lump sum payment would make all subsequent payments unequal to the lump sum payment. . . . Nuvell's argument that plan payments must be equal throughout the life of the plan fails because a creditor cannot insist on continued payments once principal and interest are fully paid. . . . Nuvell's interpretation means that every car lender must finance every car for the life of every plan. . . . [T]he equal payment provision terminates upon full payment. . . . [T]he equal payment provision requires that payments be level once they begin and terminate once the lender is fully paid. Exactly when these level payments begin is case-specific. . . . There is only one period of payment, dating from the first scheduled payment on a secured claim to the date of full satisfaction. Throughout this period, insofar as periodic payments are to be made, 'such payments shall be in equal monthly amounts.' . . . While equal payment does not need to start in month one of a plan, adequate protection does. . . . In other words, plan payments under § 1326(a)(1)(A) are likely to be different from adequate protection. . . . [A]dequate protection payments are not meant to be considered when fulfilling the requirements of the equal payment provision. . . . An adequate protection payment that occurs after the plan is confirmed cannot set the standard as to what the equal payments will be once they begin.").
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