May chapter 13 plans prioritize payments to debtors’ attorneys over secured creditors? Bankruptcy courts are divided, and two recent decisions have widened the gap.

Under 11 U.S.C. § 1325, a chapter 13 plan must pay secured creditors the value of their claims. If a plan proposes to pay those claims in periodic payments — as most plans do — § 1325(b)(iii)(I) requires those payments be in equal monthly amounts. Section 1325(b)(iii)(II), in turn, requires those payments to at least be sufficient to provide the creditor “adequate protection” (that is, an amount sufficient to compensate a creditor for the decline in the collateral’s value during the plan).

Want more content like this? Join ABI for the 14th Annual Mid-Atlantic Bankruptcy Workshop, back at the fabulous Hotel Hershey! Sessions of interest include:
 

Interactive Panel: Breaking Down the DIP Budget

This panel will explore the components of the DIP budget and the key issues for different stakeholders. The panelists will discuss how the DIP is constructed, negotiated and presented based on the interests of the debtor, lenders and unsecured creditors, and offer insight for professionals at every level of experience.

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Kicking the Tires: Automotive Supplier Restructurings/Tariffs

In an environment of rapid technological change and political uncertainty, automotive suppliers face fresh challenges. This panel will explore the possibility of trade wars, the politics of infrastructure, and the challenges and possibilities presented by self-driving cars and emerging technologies.

Consumer and UST Ethics Issues: Bankruptcy Billing, Bundling and the UpRight Decision

This panel will address hot topics in the consumer bankruptcy world, including analysis of the UpRight decision and the ongoing evolution of fee arrangements.

Ethical Use of Artificial Intelligence/Technology in the Legal Industry

As fast-emerging technologies change the way we conceive of how we will practice law in the very near future, ethics rules will need to address this revolution. The panelists will discuss how to keep ahead of these developments and adapt our practices to best understand and address our developing ethical obligations.