## Facts

- The debtor filed a Chapter 13 case and proposed a plan addressing a vehicle purchased for personal use within 910 days before the petition date.
- The vehicle lender held a purchase-money security interest in the vehicle.
- The plan proposed to bifurcate the lender’s claim into secured and unsecured portions using 11 U.S.C. § 506(a), despite the post-BAPCPA provision following § 1325(a)(9) stating § 506 does not apply to qualifying 910-day vehicle claims for § 1325(a)(5) purposes.
- The plan included a nonstandard clause stating that a creditor’s failure to object before confirmation would be deemed acceptance of the plan and the creditor’s proposed treatment.
- The lender received notice but did not object or appear.
- At the confirmation hearing, the parties agreed the proposed bifurcation of the 910-day vehicle claim was inconsistent with the Bankruptcy Code, but the debtor argued confirmation was still permissible because the lender’s silence constituted acceptance under § 1325(a)(5)(A).

## Issues

1. Whether a secured creditor’s failure to object to a Chapter 13 plan, after notice of a “silence equals acceptance” clause, constitutes “acceptance” under 11 U.S.C. § 1325(a)(5)(A) when the plan’s treatment violates the Bankruptcy Code.
2. Whether the post-BAPCPA provision following § 1325(a)(9) bars use of § 506(a) to bifurcate a qualifying 910-day purchase-money vehicle claim for confirmation under § 1325(a)(5).
3. Whether the court may confirm a plan that is facially inconsistent with § 1325(a) requirements based on creditor inaction.

## Decision

- The court denied confirmation of the plan as proposed (including as orally modified at the hearing) because it did not satisfy § 1325(a)(5) for the vehicle lender’s claim.
- The court held that creditor silence did not amount to acceptance under § 1325(a)(5)(A) where the plan’s treatment was contrary to the Bankruptcy Code.
- The court held that the qualifying 910-day purchase-money vehicle claim could not be bifurcated under § 506(a) for purposes of § 1325(a)(5) due to the post-BAPCPA provision following § 1325(a)(9).

## Legal Principles

- A bankruptcy court has an independent obligation to confirm only plans that comply with the Bankruptcy Code; lack of creditor objection does not permit confirmation of a plan that violates statutory confirmation standards.
- For § 1325(a)(5)(A), a creditor’s failure to object may not be treated as acceptance when acceptance would validate plan treatment the Code forbids.
- The post-BAPCPA provision following § 1325(a)(9) renders § 506 inapplicable, for § 1325(a)(5) confirmation purposes, to a purchase-money security interest in a motor vehicle acquired for the debtor’s personal use within 910 days of the petition date; such claims may not be crammed down via § 506(a) bifurcation.

## Conclusion

The court refused to confirm a Chapter 13 plan that attempted to bifurcate a qualifying 910-day vehicle claim and relied on a “deemed acceptance” clause to treat the secured creditor’s silence as consent, holding that confirmation requires statutory compliance and that the § 1325(a)(9) post-BAPCPA provision bars § 506 cramdown of such claims for § 1325(a)(5) purposes.


In re Montoya, 341 B.R. 41 (Bankr. D. Utah 2006)