Magdaleno Cabello and Juana de la Cruz Cabello

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
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06/10/06
Magdaleno Cabello and Juana de la Cruz Cabello
04-15931
Order Denying [11-1] Chapter 13 Plan, [5-1] Chapter 13 Plan .
Received on: 2005-04-06 10:44:43.000
2005-04-06 00:00:00.000
2005-04-06 00:00:00.000
Patti Hennessy
Case 04-15931-j13 Doc 32 Filed 04/06/05 Entered 04/06/05 12:28:00 Page 1 of 5

1Debtors failed to file Schedule A (Real Property) when they filed their petition, and have never
filed Schedule A despite having been granted an extension to file missing statements and schedules. See
Order Extending Time to File Schedules, Statement of Financial Affairs and Chapter 13 Plan,
entered September 14, 2004. The petition lists the Debtors’ address as 318 S.1st Street, Lovington,
NM, and the Objection to Confirmation of the Chapter 13 Plan and Motion to Value Collateral Filed
on September 9, 2004, filed by HomEq, states that its mortgage is on real property commonly known
as 318 S. 1st Street, Lovington, New Mexico. Debtors’ Schedule D lists HomEq with a claim based
on a mortgage on property generally described as 318 S. 1st, Lovington, New Mexico. Based on these
documents, the Court infers that the property commonly known as 318 S. 1st Street, Lovington, New
Mexcio is the Debtors’ principal residence, and that HomEq holds a mortgage on the Debtors’
principal residence.
1
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re: MAGDALENO CABELLO and No. 13-04-15931 MR
JUANA DE LA CRUZ CABELLO,
Debtors.
ORDER DENYING CONFIRMATION OF DEBTORS’ CHAPTER 13 PLAN
THIS MATTER is before the Court on confirmation of the Debtors’ proposed Chapter 13 plan
of reorganization. The Court held a final confirmation hearing on March 30, 2005 and took the matter
under advisement. After reviewing the plan and the claims on file, the Court FINDS:
1. Debtors filed their voluntary petition under Chapter 13 of the Bankruptcy Code on August
13, 2004.
2. Creditor HomEq Servicing Corporation (“HomEq”) filed a proof of claim for a secured
claim in the total amount of $49,281.89 as of the petition date. The claim is secured by real property
that is the Debtors’ principal residence.1 Of the total claim, $17,002.22 is for pre-petition arrears,
including attorneys’ fees and foreclosure fees and costs. See Claim #3.
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2HomEq and DaimlerChrysler each objected to the valuation of its claim listed in the Debtors’
proposed plan.
2
3. Debtors did not file an objection to HomEq’s claim.
4. Debtors’ plan is a sixty-month plan, with monthly payments in the amount of $627.98, for a
total plan base of $37,678.80. The plan proposes that the Debtors make a balloon payment in the
sixtieth month if needed to render the plan feasible. The plan proposes to continue making the regular
monthly mortgage payments directly to HomEq outside the plan.
5. HomEq, DaimlerChrysler Services North America , LLC (“DaimlerChrysler”), and the
Chapter 13 Trustee each filed an objection to the Debtors’ proposed Chapter 13 plan. See Docket #
20 (Objection of DaimlerChrysler); Docket #21 (Objection of Chapter 13 Trustee); and Docket # 24
(Objection of HomEq).2
6. Debtors’ plan proposes to pay HomEq’s claim for pre-petition arrears in the amount of
$7,150.05, DaimlerChrysler’s secured claim in the amount of $10,735.00, and AmeriCredit’s secured
claim in the amount of $2,800.00, but provides that if there is a difference in the amount of the claim
listed in the plan and the amount of the claim reported on the creditor’s proof of claim, that the trustee
shall pay the claim amount listed on the creditor’s proof of claim. See Chapter 13 Plan, ¶ 5.b.
6. The proposed stream of payments under the Debtors’ plan is insufficient to pay even the
principal amount of the allowed secured claims on file:
$17,022.22 HomeEq - pre-petition arrears (Claim #3)
$ 4,629.32 AmeriCredit (Claim #7)
$21,089.13 DaimlerChrysler Services North America, LLC (Claim #6)
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3AmeriCredit did not object to the Debtors’ proposed Chapter 13 plan. However, the plan
base still falls short using the claim amount for Americredit proposed in Debtors’ Chapter 13 plan.
4That section provides, in relevant part:
[T]he plan may --
(2) modify the rights of holders of secured claims, other than a claim
secured only by a security interest in real property that is the debtor’s principal
residence, or of holders of unsecured claims, or leave unaffected the rights of holders of any
class of claims.
11 U.S.C. § 1322(b)(2) (emphasis added).
3
TOTAL: $42,730.67
7. The plan is, therefore, infeasible.3
8. Even if the Debtors were allowed to make a balloon payment in the sixtieth month to make
up the shortfall, the proposed plan impermissibly alters the rights of HomEq in contravention of 11
U.S.C. § 1322(b)(2).4 The portion of HomEq’s secured claim attributable to the pre-petition arrears
is $17,002.22 per the proof of claim. Debtors did not object to HomEq’s proof of claim, but
attempted to reduce the claim through a Chapter 13 plan by proposing to pay $7,150.05 to cure the
pre-petition arrears.
WHEREFORE, IT IS HEREBY ORDERED, that confirmation of the Debtors’ proposed
Chapter 13 plan is DENIED.
_________________________________________
MARK B. McFEELEY
United States Bankruptcy Judge
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4
I certify that on the date shown on the attached
document verification, a true and correct copy of
the foregoing was either electronically transmitted,
faxed, delivered or mailed to the listed counsel
and/or parties.
Glen L. Houston Kelley L. Skehen
Attorney for Debtors Chapter 13 Trustee
1304 W. Broadway Pl 625 Silver Ave. SW, Suite 350
Hobbs, NM 88240 Albuquerque, NM 87102
Karen Howden Weaver AmeriCredit
Attorney for HomEq c/o Attorney Alice Whitten
3803 Atrisco Blvd. NW, Suite A PO Box 183853
Albuquerque, NM 87120 Arlington, TX 76096
DaimlerChrysler Services North America, LLC
c/o Attorney James E. Shively
2999 North 44th Street, Suite 500
Phoenix, AZ 85018
________________________________
Patti G. Hennessy
Law Clerk
(505) 348-2545
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