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Opinion 37

Case Name: 

In re Case, 11 B.R. 843 (Bankr.D.Utah)

Judge: 
Judge Mabey
Date: 
Jun-10-1981
Case Number(s): 
80-0294
Status: 

PUBLISHED

Body: 

In a chapter 13 case, the court established the value of the secured and unsecured portions of two creditors' claims. Debtors then agreed with those creditors to make payments on the secured portions directly, rather than having trustee make the payments, in order to avoid paying the trustee's fee under 11 U.S.C. § 1302(e)(2) on "all payments under the plan." The court ruled that, since it had limited creditors' secured claims under 11 U.S.C. § 1325(a)(5), those claims were "provided for by the plan," and trustee was entitled to a fee on each payment made on those claims, whether they were made by trustee or debtor directly. However, some secured creditors may be "handled wholly outside of the plan," and those payments would not be subject to a trustee's fee. The court indicated, however, that its view regarding such outside-of-plan handling would not necessarily apply to an unsecured claim. Based on the facts before it, including that a trustee's fee would be charged on any payments made on the secured obligations, debtors were ordered to amend their plan to include the payments to the creditors at issue, which would be paid by the trustee.

Internal Ref: 
Opinion 37
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