Adequate Protection Payments Need Only Be Designated for Vehicle Creditors?

Adequate protection payments to secured creditors in a Chapter 13 plan are only required if the collateral involved is a motor vehicle. This is what I am hearing from attorneys who populate the 341 hearing rooms. As a debtor’s attorney, this means that I do not have to calculate a specific monthly payment for furniture, jewelry or appliance creditors – instead these creditors will be paid pro rata by the Chapter 13 trustee.

If this scuttlebutt is true, it would be a benefit to Chapter 13 debtors since we could designate more of the monthly trustee payment to a mortgage arrearage or to an objecting vehicle creditor. One less thing for a Chapter 13 debtor and his attorney to worry about.

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