See. e.g., In re Smith, 192 B.R. 563, 565 n. 5 (Bankr.W.D.Okla. 1996); In re Mellema, 124 B.R. 103 (Bankr. D.Colo. 1991). Further the tenth Circuit recognized that there may be "special circumstances" that render the current market rate inequitable, such as when the market rate is higher than the contract rate agreed to between the lender and the debtor. See Hardzog, 901 F.2d at 860.
See, e.g., In re Smith, 42 B.R. 198 (Bankr. N.D.Ga. 1984) (debtor failed to rebut presumption that contract rate is correct rate to be applied for purposes of § 1325(a)(5)(B) (ii)); In re Vincente, 257 B.R. 168 (Bankr. E.D. Pa. 2001) (interest rate in parties' agreement is presumptively the appropriate rate to be used); In re Vincent, 252 B.R. 91 (Bankr. E.D. Va. 2000) (contract rate of interest is presumptively the proper rate to be paid, and it is debtor's burden to rebut this presumption); In re Smith, 192 B.R. 563 (Bankr. W.D. Okla. 1996) (contract rate is appropriate starting point in determination of interest rate under § 1325(a)(5)(B) (ii)); In re Kennedy, 177 B.R. 967, 974-75 (Bankr. S.D.Ala. 1995). Contra. In re Scott, 248 B.R. 786 (Bankr. N.D. Ill. 2000) (cramdown rate of interest generally cannot be set at contract rate of interest without overcompensating creditor); In re Coles, 252 B.R. 66 (Bankr. E.D. Va. 1999) (9% interest rate proposed by the debtor was a fair rate of interest, where creditor failed to establish its incremental borrowing rate, and rate of 24% charged debtors in the contract was inappropriate).
See, e.g., In re Smith, 42 B.R. 198 (Bankr.N.D.Ga. 1984) (debtor failed to rebut presumption that contract rate is correct rate to be applied for purposes of § 1325(a)(5)(B)(ii)); In re Vincente, 257 B.R. 168 (Bankr.E.D.Pa. 2001) (interest rate in parties' agreement is presumptively the appropriate rate to be used); In re Vincent, 252 B.R. 91 (Bankr.E.D.Va. 2000) (contract rate of interest is presumptively the proper rate to be paid, and it is debtor's burden to rebut this presumption); In re Smith, 192 B.R. 563 (Bankr.W.D.Okla. 1996) (contract rate is appropriate starting point in determination of interest rate under § 1325(a)(5)(B)(ii)); In re Kennedy, 177 B.R. 967, 974-75 (Bankr.S.D.Ala. 1995). Contra.
1998) ("The Tenth Circuit, therefore, capped the cramdown interest rate at the contract rate."). But see In re Smith, 192 B.R. 563, 566-68 (Bankr.W.D.Okla. 1996) (questioning whether contract rate must be used as a cap where the creditor is undersecured); General Motors Acceptance Corp. v. Jones, 999 F.2d 63, 71 n. 11 (3d Cir. 1993) (contract rate should not be used as a cap). Even if we accept the rationale of the courts in Oglesby and Segura, however, the "Ceiling" proposed by the Debtor is inappropriate for present value calculations because it is based on the variable contract rate as of October 31, 1997.
1998) (accepting the coerced loan approach as bound by Hardzog, using rate charged for a similar loan under similar circumstances; alternatively, looking to contract rate at time of confirmation); In re Segura, 218 B.R. 166 (Bankr.N.D.Okla. 1998) (reluctantly adopting the coerced loan approach in deference to the Tenth Circuit's decision in Hardzog, but preferring the Second Circuit's approach in Valenti); Green Tree Fin. Serv. Corp. v. Smithwick, 121 F.3d 211 (5th Cir. 1997) cert. denied 523 U.S. 1074, 118 S.Ct. 1516, 140 L.Ed.2d 669 (1998) (endorsing the rebuttable presumption approach of the Third Circuit in GMAC v. Jones, and adopting the coerced loan method); In re Smith, 192 B.R. 563 (Bankr.W.D.Okla. 1996) (adopting analysis and procedure of Third Circuit in GMAC v. Jones as consistent with Hardzog); GMAC v. Jones, 999 F.2d 63 (3d Cir. 1993) (presumptive cramdown interest rate under 1325(a)(5)(B)(ii) is that which the secured creditor would charge, at the effective date of the plan, for a similar loan under similar circumstances; either party may rebut presumption); United Carolina Bank v. Hall, 993 F.2d 1126, 1131 (4th Cir. 1993) (specifically rejecting cost of funds approach, adopting a rule that looks to the secured creditor's lending market to determine interest rate, taking into account the rates the creditor obtains in similar loans as well as the creditor's expenses in obtaining those loans); In re Mellema, 124 B.R. 103 (Bankr.D.Colo. 1991) (following Hardzog); In re Hardzog, 901 F.2d 858 (10th Cir. 1990) (adopting coerced loan approach for determining current market rate of interest in Chapter 12 cases); Memphis Bank Trust Co. v. Whitman, 692 F.2d 427, 431 (6th Cir. 1982) (in t
See, e.g., Matter of Smithwick, 121 F.3d 211 (5th Cir. 1997); General Motors Acceptance Corp. v. Jones, 999 F.2d 63 (3rd Cir. 1993); United Carolina Bank v. Hall, 993 F.2d 1126 (4th Cir. 1993); In re Hardzog, 901 F.2d 858 (10th Cir. 1990) (determining rate to be applied in Chapter 12); United States v. Neal Pharmacal Co., 789 F.2d 1283 (8th Cir. 1986); Matter of Southern States Motor Inns. Inc., 709 F.2d 647 (11th Cir. 1983); Memphis Bank and Trust Co. v. Whitman, 692 F.2d 427 (6th Cir. 1982); In re Segura, 218 B.R. 166 (Bankr.N.D.Okla. 1998); In re Smith, 192 B.R. 563 (Bankr.W.D.Okla. 1996); In re Mellema, 124 B.R. 103 (Bankr.D.Colo. 1991). 2) those courts taking the "cost of funds" approach, and
The only issue remaining to be decided by the court, therefore, is the value of the vehicle. This court's decision in In re Smith, 192 B.R. 563 (Bankr.W.D.Okla. 1996) controls the interest rate issue. No evidence having been presented to the court indicating that the current market rate of interest would be other than the contract rate, debtor will be required to pay that rate if the vehicle is to be retained.
Hardzog v. Federal Land Bank of Wichita (In re Hardzog), 901 F.2d 858 (10th Cir.1990). In In re Smith, 192 B.R. 563 (Bankr.W.D.Okla.1996), this court recently adopted the practice and procedures set out in General Motors Acceptance Corp. v. Jones, 999 F.2d 63 (3rd Cir.1993) as the proper approach for determining the appropriate market rate of interest to be paid to holders of allowed claims secured by motor vehicles. The Jones court held that the appropriate rate of interest for purposes of § 1325(a)(5)(B)(ii) should be equal to the interest rate charged by the particular claimant for similar loans in the region, at the effective date of the plan, and that the rate of interest provided by the underlying contract should be the presumptive rate of interest in the absence of evidence of a different current market rate.