In re Williams, Bankruptcy No: 17bk33186

CourtUnited States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Illinois
Writing for the CourtHon. LaShonda A. Hunt, U. S. Bankruptcy Judge
Citation583 B.R. 453
Parties IN RE: Felicia WILLIAMS, Debtor.
Docket NumberBankruptcy No: 17bk33186
Decision Date10 April 2018

583 B.R. 453

IN RE: Felicia WILLIAMS, Debtor.

Bankruptcy No: 17bk33186

United States Bankruptcy Court, N.D. Illinois, Eastern Division.

Signed April 10, 2018

Rae Kaplan, Kaplan Bankruptcy Firm, LLC, Chicago, IL, for Debtor.


Hon. LaShonda A. Hunt, U. S. Bankruptcy Judge

This matter is before the court for ruling on an objection to confirmation by creditor Ford Motor Credit Company LLC ("Ford"). Ford asserts that the Chapter 13 plan proposed by debtor Felicia Williams ("Debtor") fails to provide for equal monthly payments on its allowed secured claim as required by

583 B.R. 454

section 1325(a)(5)(B) of the Bankruptcy Code ("Code"). 11 U.S.C. § 1325(a)(5)(B). The parties have briefed the issues and presented oral arguments. For the reasons that follow, Ford's objection is sustained.


Debtor filed for Chapter 13 bankruptcy protection on November 6, 2017, and listed in her petition and Schedule D, a secured debt owed to Ford for a 2016 Ford Fusion motor vehicle with 25,000 miles. (Dkt. # 1). Debtor also filed a Chapter 13 plan that same day, in which she proposed 60 monthly payments of $785 to the trustee (Dkt. # 2, Section D.1), and payment of Ford's secured claim totaling $23,185, at 7% interest and a fixed monthly amount of $459.09, (Dkt. # 2, Section E.3.1(a) ). In her initial plan, Debtor directed the trustee to disburse $459.09 each month to Ford as pre-confirmation adequate protection (Section G.1).1 (Id. ) She further estimated attorney's fees of $3,800 (Section E.4). (Id. ) Section F of this district's required model plan2 sets forth the order of priority for trustee disbursements—secured claims in Section E.3 are paid at a higher level than attorney's fees in Section E.4. (Id. ) However, Debtor sought to change that payment scheme by adding a special term in Section G.2, allowing the trustee to pay her attorney $246 per month, at the same priority level as Ford. (Id.)

Within days, Ford objected to confirmation, challenging the interest rate as insufficient and concurrent payment of attorney's fees with its secured claim as potentially depriving Ford of adequate protection and resulting in unequal monthly payments. (Dkt. # 15). In response, Debtor filed modified plans that deleted both provisions in Section G and reduced Ford's monthly amount, first to zero dollars at 7% interest (Dkt. # 20, January 4, 2018 Plan), and then to $300 dollars at 7.5% interest (Dkt. # 24, January 9, 2018 Plan). Debtor amended the plan again on January 19, 2018, this time reducing the monthly payment to zero dollars at 7.5% interest, and adding two new special terms in Section G—to pay Ford $275 each month beginning February 2018 and to step up those payments to $741 each month upon completion of administrative expenses, including attorney's fees. (Dkt. # 26). In essence, the Debtor's new proposal flipped the script from giving Ford a higher monthly amount ($459) and her attorney less ($246), to allocating a greater portion to counsel first, and paying more to Ford later in the plan term.

Consistent with her plan, Debtor responded to Ford's objection on January 19, contending that equal monthly payments to secured creditors need not begin immediately after confirmation and that accelerated payment of attorney's fees is allowed so long as Ford receives monthly adequate protection payments, which she calculated to be $275. (Dkt. # 27). The court ordered Ford to file a reply by February 7, and it did so, arguing that the plain language of § 1.325(a)(5)(B) is clear about equal periodic

583 B.R. 455

payments beginning at confirmation, not a later date. (Dkt. # 36). The City of Chicago ("City"), a non-creditor in this case, moved to file an amicus brief in support of Ford's objection, which the court denied, citing the absence of any statute or rule providing for these filings in pending bankruptcy cases.3 Ford then orally moved to adopt the City's arguments as its own, and that request was granted over Debtor's objection. (Dkt. # 35). Debtor subsequently filed a sur-reply, reiterating her reliance upon case law from this district and others supporting her interpretation of the statutory requirements. (Dkt. # 42). The court heard oral arguments on March 20, 2018 ("Hearing"). Having reviewed the written submissions and hearing transcript, the court is now prepared to rule on whether the proposed plan meets the requirements of §§ 1325 and 1326.


This court has jurisdiction pursuant to 28 U.S.C § 1334(b) and 28 U.S.C. § 151. Matters relating to confirmation of a plan are core proceedings under 28 U.S.C. § 157(b)(2)(L). Ford argues that the statute, as written, clearly requires that monthly periodic payments distributed post-confirmation must be equal throughout duration of the plan, at least until the claim is paid in full. In this case, Ford calculated that a set payment of $480 per month would adequately protect its interest and pay off the claim. (Hearing Tr. at 9:18–21, Dkt # 43). Debtor concedes that Ford is entitled to equal monthly payments, but maintains that the statute is silent as to when those must begin. As such, she urges the court to consider the impact of 11 U.S.C. § 1326(b)(1), requiring payment of priority administrative claims "[b]efore or at the time of each payment to creditors under the plan," and construe the two provisions together as allowing adequate protection payments to Ford that cover depreciation of the vehicle—$275 per month—and once the debt to counsel is paid in full, commencing equal payments on Ford's secured claim—$741 per month.4 Ultimately, the Debtor seeks to prioritize payments to her attorney and Ford objects that she cannot do so at the expense of a secured creditor. Resolution of this dispute depends upon who is entitled to be paid what and when under the applicable provisions of §§ 1325 and 1326.



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5 cases
  • In re Shelton, Case No. 17bk35941
    • United States
    • United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Illinois
    • 14 Septiembre 2018
    ...of the bankruptcy estate and are, thus, within the court's core jurisdiction. 28 U.S.C. § 157(b)(2)(A), (L) ; In re Williams , 583 B.R. 453, 455 (Bankr. N.D. Ill. 2018) (Hunt, J.) ("Matters relating to confirmation of a plan are core proceedings under 28 U.S.C. § 157(b)(2)(L)."). The matter......
  • In re Miceli
    • United States
    • United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Illinois
    • 9 Julio 2018
    ...Erwin's reading of subsection (5)(B)(iii) to be no less strained than the approach proposed by the DeSardi line of cases. As the court in In re Williams, we "can find no support for the holding ... that the term ‘equal monthly amounts’ in § 1325(a)(5)(B)(iii) references payments to the trus......
  • Credit Acceptance Corp. v. Thompson
    • United States
    • U.S. District Court — Southern District of Indiana
    • 2 Octubre 2019 equal payments under § 1325(a)(5)(B)," because attorney's fees and secured claims can be paid simultaneously. In re Williams , 583 B.R. 453, 457 (Bankr. N.D. Ill. 2018). Further, because § 1325(a)(5)(B)(iii) has its own adequate protection requirement, which must be satisfied along with ......
  • In re Randell
    • United States
    • United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Eastern District of Wisconsin
    • 19 Enero 2022
    ...of an attorney over a secured creditor's right to equal monthly payments under § 1325(a)(5)(B). Id. at 500 (citing In re Williams, 583 B.R. 453, 457 (Bankr. N.D. Ill. 2018) ). Schultz concerned a debtor who wished to pay off her entire mortgage, including prepetition arrears, by making regu......
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