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Chicago-Kent College of Law

Seventh Circuit Review

Journal

2007

BAPCPA

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Full-Text Articles in Law

Who’S Left Suspended On The Line?: The Ominous Hanging Paragraph And The Seventh Circuit’S Interpretation In In Re Wright, Simone Jones Sep 2007

Who’S Left Suspended On The Line?: The Ominous Hanging Paragraph And The Seventh Circuit’S Interpretation In In Re Wright, Simone Jones

Seventh Circuit Review

What happens to a 910 creditor’s claim under the BAPCPA where a Chapter 13 debtor surrenders the 910 vehicle to the creditor? Bankruptcy courts are divided—both among and within circuits—resulting in costly litigation between parties unsure of the approach to which the particular court subscribes. The Seventh Circuit, in In re Wright, became the first Court of Appeals to address this issue and concluded that where a debtor surrenders the 910 vehicle, the creditor is allowed to bifurcate its claim into a secured and unsecured portion. Specifically, if the amount of the claim exceeds the value of the surrendered …