Opinion
No. 99-40983S
December 13, 1999
ORDER SUSTAINING OBJECTION TO MODIFICATION
THIS CAUSE is before the Court upon the Objection to Plan as Modified, filed by Chrysler Financial Company, LLC, on November 8, 1999. The matter was called for hearing at which time the parties appeared, stipulated to many facts and presented the testimony of the debtor. The issue before the Court is whether the Chapter 13 debtor may modify the plan, initially confirmed on April 22, 1999, to surrender collateral that diminished in value and to treat any deficiency as an unsecured claim.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 157(a), 1334. Moreover, this Court concludes that this is a "core proceeding" within the meaning of 28 U.S.C. § 157(b) as exemplified by 28 U.S.C. § 157(b)(2)(L).
The creditor, Chrysler Financial Corporation holds an allowed claim, fully secured by a 1995 Dodge automobile. The plan, confirmed on April 22, 1999, provides for full payment of that claim. Sometime after the plan was confirmed, the debtor began experiencing mechanical difficulties with the vehicle which have proven difficult and expensive to repair. Because the vehicle is apparently inoperable and thus, of little value to the debtor, she now seeks to modify her plan to surrender the vehicle she cannot maintain or make operable in full satisfaction of the Chrysler Financial Company's claim.
This Court considered a similar factual situation in In re Cooper, 167 B.R. 889 (Bankr.E.D.Ark. 1994) (Scott, J.) and did not permit the debtor to modify the terms of her plan to surrender the vehicle. The Cooper decision, however, rests in large part upon the egregious conduct of the debtor in causing the damage to the vehicle. The Court is now presented with the factual situation in which there is no evidence of bad faith, and the inoperable condition of the vehicle does not appear to be through any fault of the debtor. Nor, does there appear to be any bad faith on the part of the creditor. This is a situation in which the debtor has a faulty car and the Court must determine who must bear the burden when the breakdown occurs in the post confirmation context. The case authority is divided on this issue.
In the preconfirmation context, this Court has permitted "surrender" of a vehicle despite the fact that it could not be physically turned over to the creditor, because debtor's former spouse had absconded with the vehicle. In re Alexander, 225 B.R. 665 (Bankr.E.D.Ark. 1998) (Scott, J.).
The Court has reviewed the relevant statutes, the case law, and considered the arguments of counsel. Upon due consideration, this Court adopts the legal reasoning found in In re Dunlap, 215 B.R. 867 (Bankr.E.D.Ark. 1997) (Mixon, J.) and In re Banks, 161 B.R. 375 (Bankr.S.D.Miss. 1993). The discussions in Dunlap andBanks fully and cogently address the issues and this Court need not repeat them. Under the terms of section 1329(a) of the Bankruptcy Code, the mechanical problems with the debtor's vehicle, unfortunately, are not grounds for modification of the confirmed plan. Accordingly, it is
ORDERED that the Objection to Plan as Modified, filed by Chrysler Financial Company, LLC, on November 8, 1999, is SUSTAINED.
IT IS SO ORDERED.