In re Montoya, 2006 WL 931562 (Bankr.D. Utah)
PUBLISHED
The Debtor proposed a Chapter 13 plan in which she sought to pay for a car that was purchased within 910 days of filing her petition (910-vehicle claim) by bifurcating the secured claim under 11 U.S.C. § 506(a)(1), paying the secured value of the car in full, and paying only a small percentage of the unsecured balance. Although the hanging paragraph found after § 1325(a)(9) now prohibits bifurcation under § 506(a)(1) in certain instances, the Debtor and the Chapter 13 Trustee argued that bifurcation is still allowed because the creditor secured by the car failed to file an objection to the Debtor's Chapter 13 plan and, therefore, should be deemed to accept the plan under § 1325(a)(5)(A). The Court found (1) that under the BAPCPA, § 1325(a)(5) can no longer be used to cram down a 910-day vehicle claim; (2) that a creditor's failure to object to a plan is not deemed implied acceptance of that plan when the plan proposes treatment that is contrary to the statute; and (3) a plan that incorrect bifurcates a 910-day vehicle claim does not comply with the provisions of Chapter 13 and, therefore, cannot be confirmed under § 1325(a)(1).