Oversecured Creditor Post-Petition Interest

On November 30, 2011, the 11th Circuit Court of Appeals (which is binding upon bankruptcy decisions in Florida) entered a decision pertaining to interest that an oversecured creditor may obtain during a chapter 13 plan. In re Garner, 2011 US App Lexis 23811, involved a secured creditor that had a contract rate of interest of 10.5%. The creditor wanted to be paid in the plan at this rate until it used up its equity cushion. The creditor objected to a plan that proposed under Section 506 a reduced interest rate. The bankruptcy court had allowed the cram down interest rate of 4.25%. (Till rate)

Garner held the creditor was entitled to contract interest rate post-petition until confirmation, but was only entitled to the cram down interest rate of 4.25% post-confirmation.

Contact Ft Lauderdale bankruptcy attorney for chapter 13 bankruptcy information.



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