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#2105

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS

In Re:

KENNETH W. WHITE, KANDI M. WHITE,

DEBTOR(S)

NO. 93-40721-13

CHAPTER 13

MEMORANDUM OF DECISION

This case is before the Court on creditor First Savings Bank's motion for stay relief and to dismiss, and the debtors' opposition thereto and request to abate certain payments and modify their confirmed chapter 13 plan. The bank appears by counsel Brenda J. Bell. The debtors appear by counsel Jerry L. Harper. No evidentiary hearing has been held on these matters, but counsel have submitted memoranda in support of their positions. The Court believes that the following controlling facts are undisputed and that this matter is ready for decision.

FACTS

The debtors filed their chapter 13 petition, schedules, and plan on May 3, 1993. The plan called for the debtors to pay an arrearage on their home mortgage, consisting of one missed payment and some penalties, and their car payments through the chapter 13 trustee, while making their current mortgage payments directly to the mortgagee, First Savings Bank (FSB). At the time the plan was filed and confirmed, the debtors were both working, with Mrs. White earning slightly more than her husband. A wage withholding order was issued to and honored by Mrs. White's employer.

Sometime after confirmation, Mr. White lost his job, depriving the family of his income. Mrs. White's employer continued wage withholding, so the plan payments were made to the trustee. However, because they had lost Mr. White's income, the debtors fell behind on their direct payments to FSB. The present dispute resulted.

Mr. White has now obtained a job which pays him somewhat more than his old one had. Based on this increase and a raise Mrs. White has received, the debtors propose to modify their plan to cure the post-confirmation arrearage on their mortgage and resume making future current payments directly to FSB. The debtors' home is worth substantially more than they owe FSB. Thus, FSB is oversecured and unlikely to lose either principal or interest if the debtors' new plan should fail.

DISCUSSION AND CONCLUSIONS

Both FSB and the debtors cite cases which support their respective positions. The Court believes that FSB's security interest is protected by the substantial equity cushion in a type of asset which generally does not depreciate. The debtors' default appears to have been beyond their control and not reasonably foreseeable during the confirmation process. The debtors appear to have the present ability to pay the arrearage incurred and maintain current payments to their creditors. Under these circumstances, the debtors should be given the opportunity to prove that their proposed plan modification should be approved. In reaching this conclusion, the Court adopts the reasoning of the following cases: In re Bereolos, 126 B.R. 313 (Bankr. N.D. Ind. 1990) and In re Hoggle, 12 F.3d 1008 (11th Cir. 1994).

FSB's motion will be denied without prejudice; it may be reasserted if the debtors' modified plan is not confirmed. The Clerk will be directed to set the debtor's proposed plan modification for hearing.

The foregoing constitutes Findings of Fact and Conclusions of Law under Rule 7052 of the Federal Rules of Bankruptcy Procedure and Rule 52(a) of the Federal Rules of Civil Procedure. A judgment based on this ruling will be entered on a separate document as required by FRBP 9021 and FRCP 58.

Dated at Topeka, Kansas, this 3d day of January, 1995.













_________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS







In Re: )

)

KENNETH W. WHITE, ) NO. 93-40721-13

KANDI M. WHITE, ) CHAPTER 13

)

DEBTOR(S). )

JUDGMENT ON DECISION

This case was before the Court on creditor First Savings Bank's motion for stay relief and to dismiss, and the debtors' opposition thereto and request to abate certain payments and modify their confirmed chapter 13 plan. The bank appeared by counsel Brenda J. Bell. The debtors appeared by counsel Jerry L. Harper. The Court has now issued its Memorandum of Decision resolving this dispute.

First Savings Bank's motion for stay relief and to dismiss is hereby denied without prejudice. The bank may reassert its motion if the debtors' modified plan is not confirmed. The Clerk is hereby directed to set the debtors' proposed plan modification for hearing on the January calendar.

IT IS SO ORDERED.

Dated at Topeka, Kansas, this 3d day of January, 1995.













__________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

 

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