Laney v. Second Chance Auto, Inc., No. 21-2783 (7th Cir. 2022)
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In 2019, Laney financed a Ford Edge from Second Chance, agreeing to pay attorney’s fees in the event of default. Four months later, Laney filed a Chapter 13 bankruptcy petition. The bankruptcy court ordered Laney to amend his original plan to account for Chance's “Claim 3” for the Edge as a “910 claim” (debts for personal vehicles purchased less than 910 days before the filed bankruptcy petition must be paid in full, 11 U.S.C. 1325(a)). Laney amended the plan but failed to provide for full payment. Chance again objected and requested attorney’s fees for filing the same objection twice. The bankruptcy court again ordered Laney to amend the plan and allowed Chance to file an affidavit of attorney’s fees. Laney’s second amended plan accounted for the full outstanding principal and interest but not for attorney’s fees.
The bankruptcy court confirmed the plan, which listed the Edge claim to be paid in full with interest. At the court’s request, Second Chance amended Claim 3 to include attorney’s fees, but labeled it as “Claim 9,” which led Laney to object. The court concluded that Claim 9 would be treated as an amendment to Claim 3. Laney unsuccessfully argued that the claim violated 11 U.S.C. 1327(a). The district court and Seventh Circuit affirmed. The bankruptcy court provided compelling reasons for allowing the post-confirmation amendment; the attorney’s fees were reasonable and necessary.
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