U.S. Bankruptcy Court, WDNY
Secured Property Partially Divided
In re Michele L. Hurd
Background: At issue was whether Section 1325(a)(5) of the Bankruptcy Code allowed a court to overrule a mortgagee’s objection to a plan that proposes to divide the collateral into two parcels: one to be abandoned and the other to be retained on condition of payment of a portion of the secured indebtedness. The issue arises from the purchase of two lots of real estate from the creditor. The debtor’s ex-spouse currently holds an interest in one of the lots.
Ruling: The Bankruptcy Court sustained the creditor’s objection. The court found that the creditor has a secured claim from a single loan. The plan seeks to partially distribute the value of the collateral leaving the creditor with the burden of dealing with an abandonment of property in which her ex-spouse retains an interest.
Michael A. Weishaar for the debtor; Mary B Ilardo for the creditor Eunice A. Mooradian; Albert J. Mogavero, Chapter 13 Trustee