## Facts

- Leareen and James Wright purchased a 2004 Nissan Altima on May 29, 2004, financed by Centrix Funds Series CLPF, which held a purchase-money security interest in the vehicle.
- The retail installment contract set an interest rate of 17.9%.
- The Wrights filed a Chapter 13 petition on December 5, 2005, after BAPCPA’s effective date.
- The proposed Chapter 13 plan treated Centrix’s automobile claim as fully secured and proposed to pay 7.75% interest.
- Centrix filed a proof of claim reflecting the 17.9% contract rate and objected to confirmation, asserting it was entitled to contract interest.

## Issues

1. Whether BAPCPA’s unnumbered paragraph following § 1325(a)(9) (the “910-vehicle” provision) requires a Chapter 13 plan to pay the contract interest rate on a qualifying fully secured vehicle claim.
2. Whether the interest rate for present-value payments under § 1325(a)(5)(B)(ii) remains determined by Till’s prime-plus formula after BAPCPA.

## Decision

- The court overruled Centrix’s objection to confirmation.
- The court held that the 910-vehicle provision prevents application of § 506 (and thus bifurcation) but does not mandate the contract interest rate.
- The court applied Till and concluded that a prime-plus interest rate (including the plan’s 7.75% rate) could satisfy § 1325(a)(5)(B)(ii)’s present-value requirement.

## Legal Principles

- Under § 1325(a)(5)(B)(ii), a plan confirmed over a secured creditor’s objection must provide payments with a present value, as of the plan’s effective date, equal to the allowed secured claim; this requires an appropriate discount (interest) rate.
- BAPCPA’s 910-vehicle provision makes § 506 inapplicable to certain purchase-money vehicle claims, thereby barring stripdown and requiring treatment as fully secured, but it does not change § 1325(a)(5)(B)(ii)’s interest-rate standard.
- Till’s prime-plus approach governs the interest rate used to provide present value under § 1325(a)(5)(B)(ii) absent a statutory directive to use the contract rate.
- A creditor’s entitlement to be treated as fully secured under the 910-vehicle provision does not imply a right to the prepetition contract interest rate in Chapter 13 confirmation.

## Conclusion

The court held that BAPCPA’s 910-vehicle provision eliminates bifurcation for qualifying vehicle loans but does not require payment of the contract interest rate; the proper interest rate for present-value payments under § 1325(a)(5)(B)(ii) continues to be determined under Till’s prime-plus formula, so the creditor’s objection seeking contract interest was denied.


In re Wright, 338 B.R. 917 (Bankr. M.D. Ala. 2006)