Case Summary:
Debtors filed a chapter 13 plan in which they proposed to pay directly two claims that are secured by the Debtors’ vehicles. The chapter 13 trustee objected to the plan, asserting the Debtors are required to pay the claims through the Trustee based on a long-standing practice in this District. The Court rejected the Trustee’s argument that all payments to pre-petition vehicle creditors must be disbursed through the Trustee. The Court overruled the Trustee’s objection but emphasized its decision is dependent on the facts and circumstances of this particular case, including that the Debtors had proposed a 100% plan, the maturity dates for the loans were after the plan’s completion date, and there were no pre-petition arrearages on the claims.

Statute/Rule References:
11 U.S.C. § 1322(b) -- Contents of Plan
11 U.S.C. § 1325(a)(5) -- Confirmation of Plan

Key Term:
Direct payments