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07
Apr
2021

Creditor Required to Release Lien

In this case, Robert Schultz and his wife owed more than $15,000 to Hancock Bank on a loan secured by debtors’ Chevrolet Caprice. The amount owed was not in dispute.

Debtors’ Chapter 13 Plan proposed to repay Hancock Bank the value of its security, which was listed at $8,175.

The balance of the funds owed to Hancock of approximately $6,800 was classified as an unsecured claim by the debtors; Hancock filed a proof of claim for the full amount of the secured claim and properly identified its security. The court confirmed debtors’ repayment plan.

Debtors completed payments to the Chapter 13 Trustee and requested Hancock to discharge its lien on the collateral. Hancock refused to release its lien since it had not been paid in full on the secured loan.

Debtors filed to reopen the bankruptcy case and compel Hancock to release its lien. The court held that the bank must release its lien since the repayment plan was confirmed to repay the bank only the reduced value of the collateral. Robert Schultz v. Hancock Bank, 153 B.R. 170.

Author: Charles R. Harroun, Attorney at Law



This entry was posted on Wednesday, April 7th, 2021 at 8:56 am and is filed under Bankruptcy, National, Secured Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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