## Facts

- Charles and Debra Meeks filed a Chapter 13 petition.
- GMAC filed a claim totaling $6,822.18; $5,888.16 was treated as secured by the debtors’ 1988 Cadillac DeVille and $934.02 as unsecured.
- The confirmed Chapter 13 plan required payment of GMAC’s full allowed secured claim over 36 months, extending the original contract term.
- Four months after confirmation, the debtors moved to modify the plan to (i) surrender the Cadillac, (ii) reduce plan payments by the amount previously paid toward GMAC’s secured claim, and (iii) treat any post-sale deficiency as unsecured.
- The trustee consented, and the court entered an order granting the modification on an ex parte basis without notice to GMAC.
- GMAC obtained stay relief, repossessed and sold the vehicle, and asserted a remaining secured balance of $2,165.28 after applying sale proceeds.
- GMAC moved to set aside the modification order, arguing the Bankruptcy Code did not permit post-confirmation reclassification of its allowed secured claim.

## Issues

1. Whether 11 U.S.C. § 1329 permits post-confirmation modification of a Chapter 13 plan to surrender collateral securing an allowed secured claim and reclassify the remaining balance as unsecured.
2. Whether the ex parte order approving the modification should be set aside under Fed. R. Civ. P. 60(b), as incorporated by Bankruptcy Rule 9024, given the lack of notice to the secured creditor and the relief granted.

## Decision

- The court granted GMAC’s motion and vacated the ex parte modification order.
- The court held that § 1329 does not authorize a post-confirmation modification that re-determines or reclassifies the secured status of an allowed secured claim fixed at confirmation.
- The originally confirmed plan remained controlling, and GMAC’s remaining balance retained its secured character.

## Legal Principles

- Section 1329(a) permits post-confirmation plan modification only to (i) increase or reduce payments on claims, (ii) extend or reduce the time for payments, or (iii) adjust distributions to account for payments made outside the plan; it does not authorize reclassification of an allowed secured claim as unsecured.
- The amount and secured status of a claim determined under §§ 506(a) and 1325(a)(5) at confirmation are generally fixed for the life of the plan and are not reopened through § 1329.
- A debtor who retains and uses collateral after confirmation bears the depreciation risk; post-confirmation surrender cannot be used to shift that risk to the secured creditor by converting the remaining secured balance into an unsecured deficiency.
- Rule 60(b) and Bankruptcy Rule 9024 permit vacatur of an order where procedural irregularities (including lack of notice) and substantive error warrant relief.

## Conclusion

The court vacated an ex parte post-confirmation modification and held that § 1329’s limited modification authority does not permit surrender of collateral to reclassify the unpaid portion of an allowed secured claim as unsecured after confirmation; the confirmed plan’s secured-claim treatment remained binding.


In re Meeks, 237 B.R. 856 (Bankr. M.D. Fla. 1999)