In re Rebuelta, Bankruptcy No. 81-01728A
Decision Date | 10 February 1983 |
Docket Number | Bankruptcy No. 81-01728A,Adv. No. 82-2649A. |
Parties | In re Manuel REBUELTA, Debtor. The CITIZENS AND SOUTHERN NATIONAL BANK f/k/a the Citizens and Southern Bank of Henry County, Plaintiff, v. Manuel REBUELTA and J. Sam Plowden, Trustee, Defendants. |
Court | United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Georgia |
John J. Goger, Rubin, Winter & Goger, P.C., Atlanta, Ga., for plaintiff.
James J. Macie, Atlanta, Ga., for defendants.
On October 25, 1982, The Citizens and Southern National Bank of Henry County ("C & S") filed its Complaint for Relief from the Automatic Stay and Other Relief. C & S requested relief from the automatic stay, adequate protection, or relief from the codebtor stay to proceed against Mr. Luis Rebuelta concerning C & S' interest in a 1979 Chevrolet pickup truck. The issue in this case arises out of the application of Bankruptcy Rule 13-302(e)(1) to the following facts:
The above-styled Chapter 13 proceeding was filed on April 28, 1981. After notice, a § 341 Meeting of Creditors was held on June 9, 1981. A hearing on confirmation of the debtor's plan was held on July 28, 1981. Thereafter, on August 4, 1981, the debtor's plan was confirmed. C & S filed its proof of claim on October 14, 1982 in the amount of $7,009.80 alleging secured status.
Rule 13-302(e)(1) of the Rules of Bankruptcy Procedure states that:
The comment to this Rule arising out of the implementation of the 1978 Bankruptcy Code states that:
"This rule is not affected by the Code."
While some Courts have held that Rule 13-302(e)(1) is inconsistent with the Bankruptcy Code, this Court rejects that position.
The question before the Court is whether the filing of an untimely proof of claim, which results in an otherwise secured creditor being treated as an unsecured creditor for purposes of distribution, also would result in said secured creditor losing the other benefits of secured status, such as the right to adequate protection and the right to bring a complaint for relief from the automatic stay. The case of In re Hines, 20 B.R. 44, 9 BCD 106 (Bkrtcy.S.D.Ohio 1982) addresses this question.
In Hines, the Bankruptcy Court held that Rule 13-302(e)(1) of the Rules of Bankruptcy Procedure is applicable to cases under the Bankruptcy Code. The Court in Hines attempted to distinguish what it termed the procedural and substantive effects of Rule 13-302(e)(1) by stating that one who files a late proof of claim, and is therefore treated as unsecured for purposes of distribution, does not lose the other benefits of secured status.
Id. 20 B.R. 44, 9 BCD at 108.
This Court agrees with the conclusion that the lien of a secured creditor that is being treated as an unsecured creditor does survive the Chapter 13...
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