Gary L. Hudson, II

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UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE DIVISION

In re:

Gary L. Hudson, II,
Debtor
Case No. 25-50337

Chapter 13

Judge John W. Kolwe

Ruling on Motion to Lift Stay
Before the Court is a Motion to Lift Stay and Co-Debtor Stay filed by Republic
Finance, LLC (“Republic”). Republic contends the stay should be lifted because the
Debtor’s confirmed plan fails to provide for treatment of Republic’s allowed secured
claim, and the Debtor is not otherwise paying the claim. The Debtor objected to
Republic’s Motion, asserting that the Plan contains a provision relegating Republic
to an unsecured status, which is now res judicata. The Court held multiple hearings
on this matter, and the parties filed multiple briefs. The Court has studied the briefs,
the applicable law, other sources, and the confirmed Plan, and for the following
reasons finds that the Plan does not treat Republic’s secured claim, and that the
Plan’s attempt to “treat” Republic as unsecured is ineffective. Accordingly, the Motion
to Lift Stay will be granted.
________________________________________
JOHN W. KOLWE
UNITED STATES BANKRUPTCY JUDGE
SO ORDERED.
SIGNED August 17, 2026.
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Background
The Debtor filed his Chapter 13 case and Chapter 13 Plan on April 22, 2025.
On May 7, 2025, Republic filed a proof of claim (Claim No. 2) asserting a secured
claim of $28,670.00 and an unsecured claim of $1,079.52. Attached to Republic’s claim
are various supporting documents, including certain UCC filings and an auto title
appearing to show that Republic’s secured claim was properly perfected in certain
household goods and a 2010 Ford Escape. The face of the claim indicates that the
secured portion of Republic’s claim is based on the value of the collateral as declared
by the Debtor at the time of the loan.
On June 26, 2025, Republic filed an Objection to the Plan (ECF # 12).
Republic’s Objection states that “Debtor’s plan of reorganization fails to provide for
the treatment of the secured claim either through payment or surrender of the
collateral during the 36 month plan. Republic does not accept the plan.” Id, p. 1. The
entire basis for Republic’s Objection was that the Plan does not treat its claim.
The hearing on the Debtor’s original Plan was held on July 23, 2025. Republic
failed to appear at the hearing to prosecute its objection. Following the hearing, the
Court ordered the Debtor to file an Objection to the IRS’s claim and continued the
hearing on confirmation until September 10, 2025. The Court also carried Republic’s
objection to the September date at the Debtor’s request.
Republic also failed to appear at the September 10th hearing. The Debtor did
not offer or otherwise agree to address Republic’s objection. Thus, the Court overruled
Republic’s Objection for failure to appear and prosecute the objection and ordered the
Debtor to file an Immaterially Amended Plan to address minor issues. The Court then
confirmed the Immaterially Amended Plan (ECF #26) by a Confirmation Order dated
October 31, 2025 (ECF #29).
On January 16, 2026, Republic filed its Motion for Relief from Stay on the 2010
Ford Escape. Republic’s motion is premised on its assertion that the Debtor’s plan
does not provide for its allowed secured claim, which is the same assertion it made in
its objection to the Debtor’s plan that was overruled for failure to prosecute.
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The Debtor filed an objection to Republic’s motion asserting that Republic’s
claim is provided for in the plan because it is treated as unsecured under certain
nonstandard plan provisions set forth in Section 9 of the Confirmed Plan, specifically
the following sentence: “Any claim with a secured value of $0 or otherwise not treated
in Part 3 herein, shall be treated as a general unsecured claim.” (ECF #26). Thus, the
Debtor claims that Republic’s claim was rendered unsecured by this language in the
Plan. Further, the Debtor contends that Republic is bound by this Plan provision
since the Court overruled Republic’s objection to confirmation raising the same issue
underlying its Motion for Relief from Stay.
Based on the parties’ positions, the Court must determine whether the Debtor’s
confirmed Plan effectively strips Republic of its allowed secured claim.
Discussion
The Court will begin its discussion with the primary cause of the current
dispute between the parties: Republic’s failure to appear at and prosecute its
objection to the Debtor’s Plan at either of the confirmation hearings. The Debtor
contends that the Court’s overruling of Republic’s objection necessarily means that
Republic is bound by the Plan as confirmed under the doctrine of res judicata. The
Court agrees. The question facing the Court, however, is not whether the Plan binds
Republic. Rather, it is the effect of the Plan, as confirmed, on Republic’s claim, which
will be determined by the language of the Plan itself.
Before examining the Plan, the Court will briefly review the options generally
available to debtors under the Bankruptcy Code for dealing with secured claims.
A. Options for Treating Secured Claims in Chapter 13 Cases.

Republic filed its proof of claim asserting a secured claim approximately two
weeks after the Debtor filed this case, and it appears undisputed that Republic
possesses a “deemed allowed” secured claim.
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Section 1325(a)(5) of the Code sets forth

1
Republic timely filed its proof of claim asserting a secured claim in the amount of $28,670.00
and attaching documentation in support of the claim. No party in interest has objected to Republic’s
proof of claim. Accordingly, Republic’s claim is an “allowed secured claim” under 11 U.S.C. §§ 501(a)
and 502(a); see also Fed. Rule Bankr. P. 3001 and 3002.
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three alternative options for the treatment of each “allowed secured claim provided
for by the plan:” (i) acceptance of the plan by the holder of the claim as provided under
§ 1325(a)(5)(A), (ii) compliance with Chapter 13 cramdown requirements as allowed
under § 1325(a)(5)(B), or (iii) surrender of the collateral to the holder of the claim as
authorized under § 1325(a)(5)(C). See 11 U.S.C. § 1325(a)(5). A court generally must
confirm a plan if any one of these three alternatives is satisfied with respect to an
“allowed secured claim provided for by the plan” (and assuming all other
requirements for confirmation are met).
Section 1325(a)(5), however, applies only to allowed secured claims “provided
for by the plan.” The term “provided for by the plan” is not defined in the Code, but it
has been interpreted as meaning “to make provision for,” “stipulate to,” “deal with,”
or “refer to” a claim in a plan. See 8 C
OLLIER ON BANKRUPTCY ¶ 1325.06[1][b] (Richard
Levin & Henry J. Sommer eds., 16th ed.), citing Rake v. Wade, 508 U.S. 464, 473-74,
113 S. Ct. 2187, 2192-93 124 L.Ed.2d 424 (1993).
Finally, a plan is confirmable even if it does not provide for an allowed secured
claim, as the Code does not mandate that a debtor provide for such claims in the plan.
See 11 U.S.C. § 1322(b)(2) (“[T]he plan may−modify the rights of secured creditors ... ”
(emphasis added)). If the plan does not provide for an allowed secured claim, then the
claim generally survives confirmation, and the holder of such claim may seek relief
from the automatic stay to pursue contractual remedies against the collateral.
Because a plan need not modify allowed secured claims it is
discretionary with the debtor whether to make provision in the
chapter 13 plan for allowed secured claims. In the event the plan
makes no provision for one or more allowed secured claims, the plan
is to be confirmed by the court regardless of its acceptance or rejection
by holders of allowed secured claims not provided for by the plan and
without any other showing being required under section 1325(a)(5).
The holders of allowed secured claims not provided for by the
plan may seek appropriate relief from the automatic stay in
furtherance of any contractual or other remedies available
against the chapter 13 debtor or their collateral.
8 C
OLLIER ON BANKRUPTCY ¶ 1325.06[1][b] (emphasis added).

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B. The Debtor’s Plan does not provide for Republic’s Claim.
The Court now turns to the question of whether the Debtor’s Plan in this case
provides for Republic’s deemed allowed secured claim by effectively reclassifying it as
unsecured. This question can be answered within the context of the confirmed plan,
which is essentially a contract binding on all creditors.
The parties’ rights are established by the confirmed Plans. When
interpreting a confirmed plan, Courts apply traditional principles of
contract interpretation. Official Creditors Comm. of Stratford of Tex.,
Inc. v. Stratford of Tex., Inc. (In re Stratford of Tex., Inc.), 635 F.2d
365, 368 (5th Cir. 1981). Absent an ambiguity, Courts review the
express language of the governing document to determine the intent
of the parties. Kimbell Foods, Inc. v. Republic Nat’l Bank of Dallas,
557 F.2d 491, 496 (5th Cir. 1977), aff’d sub. Nom. United States v.
Kimbell Foods, Inc., 440 U.S. 715, 99 S.Ct. 1448, 59 L.Ed.2d 711
(1979); In re Victory Markets, Inc., 221 B.R. 298, 303 (2d Cir. BAP
1998) (explaining a confirmed plan is a binding contract between a
debtor and its creditors, for which the “starting point for review” is its
plain language.)
In re Linn Energy, LLC, 576 B.R. 532, 535–36 (Bankr. S.D. Tex. 2017), aff’d sub nom.
Matter of Linn Energy, L.L.C., 927 F.3d 350 (5th Cir. 2019). See also, e.g., In re Charis
Hosp., L.L.C., 360 B.R. 190, 193 (Bankr. M.D. La. 2007) (noting that “a confirmed
plan essentially is a contract” subject to ordinary contract interpretation principles);
In re Burk Dev. Co., Inc., 205 B.R. 778, 786 (Bankr. M.D. La. 1997) (noting that a
confirmed plan is “itself a legal contract”).
Turning to the Debtor’s confirmed Plan, Part 1, titled “Notices,” contains
instructions for both Debtors and Creditors which is set forth just before a table of
three “checkbox” choices for the Debtor to indicate whether certain provisions, which
may have the effect of modifying creditors’ rights, are included in the Plan. Just above
the table, the Plan provides: “The following matters may be of particular importance.
Debtors must check one box on each line to state whether or not the plan
includes each of the following items. If an item is checked as ‘Not Included’
or if both boxes are checked, the provision will be ineffective if set out later
in the plan.” See Plan, p. 1 (ECF #26) (emphasis in original). This table follows in
the Debtor’s Plan:
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The nonstandard provisions in Part 9 of the Debtor’s Plan are as follows:
For those claims treated in sections 3.2 and 3.3 herein, Secured
creditors’ lien(s) shall remain until the secured claim is paid, effective
upon discharge. Each of the above secured claims in Section 3.2, if
allowed, shall be paid the secured value, as set forth above, or the
amount of the secured claim filed, whichever is less. Any claim with
a secured value of $0 or otherwise not treated in Part 3 herein,
shall be treated as a general unsecured claim. Any claim filed
as an unsecured claim, upon confirmation, shall be estopped from
later attempting to validate or otherwise assert a security interest,
lien, encumbrance, or privilege in any collateral owned by the Debtor
and shall furthermore cancel any recordation of any security interest,
lien, encumbrance, or privilege within 60 days of discharge.
Id, p. 5 (emphasis added).
The Debtor essentially argues that Section 3 of the Plan does not treat any
secured claim, so any secured claim necessarily must be treated as a general
unsecured claim under the plain language of Section 9’s nonstandard provisions. In
the Debtor’s view, not only did the checkbox in Part 1 of the Plan put creditors on
notice that the Plan contains special provisions in Section 9, but those special
provisions are clearly written and lead to only one conclusion, that any secured claim
is to be treated as a general unsecured claim.
Republic points out that the first checkbox provision clearly states that the
Plan does not include “[a] limit on the amount of a secured claim, set out in Section
3.2, which may result in a partial payment or no payment at all to the secured
creditor.”
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In Section 3.2 of the Plan, concerning “Request for valuation of security,
payment of fully secured claims, and modification of undersecured claims,” the Debtor
checked the box for “None,” failing to request valuation, establish payment of a fully
secured claim, or modify—i.e., cramdown—an undersecured claim. Republic argues

2
This quote is taken from the first checkbox provision of the Plan.
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that the special provisions in Section 9 are incompatible with the checkbox noting
that there is no limit on the amount of a secured claim and that payments on secured
claims will not be reduced.
The Court agrees with Republic. First, the checkbox provisions included at the
beginning of the Court’s form Chapter 13 Plan are intended to clearly put creditors
on notice of important provisions, and creditors must be able to rely on them.
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Here,
a secured creditor reading the first checkbox provision would clearly expect that there
would be no limit on payments on secured claims. The special provisions the Debtor
included in Section 9 completely contradict the plain language of the first checkbox,
which in the Court’s view is not a valid method of relegating a secured creditor to an
unsecured class, particularly given the structure of this District’s form Chapter 13
plan.
Not only that, but immediately before the checkboxes, the Plan provides notice
that “[i] f an item is checked as ‘Not Included’ or if both boxes are checked, the
provision will be ineffective if set out later in the plan.” Because the Debtor checked
the box indicating that a limit on the amount of a secured claim is “Not Included,”
any later provision in the Plan at odds with that election, including the nonstandard
provisions in Section 9, is ineffective. The Debtor is therefore bound to pay secured
claims in full or face a motion to lift stay and to allow the creditor to proceed in state
court to foreclose on the collateral.
Second, the special provisions in Section 9 largely do not even apply to the
circumstances of this case, as they refer to claims treated in Sections 3.2 and 3.3, but
the Plan in this case does not treat any claims in any part of Section 3. The special
provisions appear to be boilerplate language included in other plans, not a bespoke
provision written for this Plan.

3
LBR 3015-1(a) adopts the Local Form Plan, which is “to be utilized in all chapter 13 cases
instead of the Official Form Plan...without alteration, except as otherwise provided in the Local Form
Plan or for any changes described in Fed. R. Bankr. P. 9009(a).”
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To be clear, and as mentioned above, if the Debtor had intended to modify
Republic’s secured claim, he could have done so within the structure of this District’s
form Plan. Section 3.2 of this District’s form Chapter 13 Plan provides the following:

To modify Republic’s claim, the Debtor should have checked the first box in
Part 1 of the Plan to put Republic on notice that Section 3.2 included a limit on the
amount of its secured claim, checked the box under Section 3.2 to request that the
Court determine the value of the secured claim, and listed Republic’s claim on the
table with the Debtor’s own asserted value of the collateral. If the Debtor had done
so and Republic objected, the Court could have determined the value of the collateral,
for purposes of determining the extent of Republic’s secured claim under § 506 of the
Code, as part of the confirmation process.
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If Republic either failed to object or
objected but failed to pursue its objection, as occurred here, the plain language of the
Plan would operate to modify Republic’s claim. Since the Debtor did not check the box

4
§ 506(a)(1) of the Code provides in part that “[a]n allowed secured claim of a creditor secured
by a lien on property in which the estate has an interest . . . is a secured claim to the extent of the
value of such creditor’s interest in the estate’s interest in such property . . . and is an unsecured claim
to the extent that the value of such creditor’s interest . . . is less than the amount of such allowed
claim.” 11 U.S.C. § 506(a)(1).
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affirmatively indicating he intended to modify Republic’s claim, his later attempt to
do so in Part 9 was ineffective.
The Debtor is bound by his own decisions, and the Court must apply the plain
language of the confirmed Plan. Thus, Republic is entitled to relief from the stay.
Conclusion
It is a bit ironic for this Court to grant Republic relief from the automatic stay
given its complete lack of diligence at the confirmation stage of this case. Even so, the
Court is bound to interpret the Plan put forth by the Debtor. Page one of the Plan
clearly indicates in the checkbox table that the Debtor is not modifying any secured
claims in Section 3.2 of the Plan—the Section of the Plan specifically designed to
address collateral values in relation to determining the extent of a creditor’s secured
status for purposes of § 506 of the Code. Page one of the Plan also clearly states that
“if an item is checked as ‘Not Included’ or if both boxes are checked, the provision will
be ineffective if set out later in the plan.” Thus, even though the Debtor is attempting
to modify Republic’s secured status as part of the nonstandard provision in Part 9 of
the Plan, that attempt is simply ineffective under the plain language of the Plan.
Moreover, the Court does not and will not condone the use of Part 9 in such a fashion
when Part 3.2 of the Plan was specifically designed to address cramdown of a
creditor’s claim as allowed by § 1325(a)(5)(B). Accordingly, the Court finds that
Republic is entitled to relief from the automatic stay notwithstanding its lack of
diligence during the confirmation process may make it undeserving of such relief.
The Court will enter an order providing the Debtor 15 days to file a modified
plan to address the claim of Republic. If a modified plan is not timely filed, Republic
is authorized to submit an order granting its Motion.
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