Case Summary:
Debtors filed a Chapter 12 plan proposing to reamortize debt on personal property and the mortgage on Debtors’ homestead. Debtors proposed making these payments directly to the Creditor. The Trustee objected asserting that the re-amortized debt should be paid through the Trustee. Debtors filed an amended plan proposing the personal property debt be paid through the Trustee and the reamortized mortgage debt be paid directly to the Creditor. The Trustee maintained the objection. The Court held that direct payments, like the one proposed in the plan, must be evaluated on a case-by-case basis especially given the purpose of Chapter 12. Applying the factors used in Pianowski, the Court determined the amended plan struck an appropriate balance and could be confirmed over the Trustee’s objection.
Statute/Rule References:
11 U.S.C. § 1222(a)(1) -- Contents of plan - future earnings
11 U.S.C. § 1225 -- Confirmation of plan
11 U.S.C. § 1226(c) -- Payments
Key Terms:
Chapter 12 plan
Direct payment
Pianowski factors