In re Mitchell
Nov
13
2007
Ruling
Inclusion of negative equity in financing defeated purchase money security interest status and allowed for bifurcation of debt.
Procedural posture
Bankruptcy debtors' proposed chapter 13 plan provided for treatment of a claim of a creditor secured by the debtor's vehicle as secured only to the extent of the value of the vehicle. The creditor objected to bifurcation of its claim into secured and unsecured claims, asserting that 11 U.S.C. § 1325(a) (hanging paragraph referencing paragraph 5) precluded such bifurcation based on the creditor's purchase-money security interest ("PMSI").
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Court
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