Citizens State Bank v. Schiller, No. 21-6001 (8th Cir. 2021)
Annotate this CaseThe Bankruptcy Appellate Panel vacated the bankruptcy court's order confirming debtor's chapter 12 plan, concluding that the bankruptcy court erred by failing to hold an evidentiary hearing to determine the value of the Bank's collateral where the collateral was disputed. The panel also concluded that the Bank needed to file a proof of claim. The panel explained that, until the bankruptcy court holds the requisite evidentiary hearing and determines the value of the Bank's collateral, it is impossible to say whether under the debtor's plan the Bank will be paid not less than the allowed amount of its secured claim. Accordingly, the panel remanded for further proceedings. Finally, the panel concluded that the record amply supports the bankruptcy court's finding of disposable income under 11 U.S.C. 1225(b)(1)(B).
Court Description: [Nail, Author, with Schermer and Saladino, Bankruptcy Judges] Bankruptcy Appellate Panel. The bankruptcy court erred in not holding an evidentiary hearing to determine the value of the creditor bank's collateral where the matter was disputed; the bankruptcy court did not err in determining the bank did not file proof of its unsecured claim; the order confirming debtor's plan is vacated, and the matter is remanded for an evidentiary hearing on the value of the bank's collateral. [ July 14, 2021 ]
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