In re Ryles (09-40692)
A postpetition fire destroyed the debtors' house, resulting in insurance proceeds totaling $107,000.00, which the creditor bank held. The debtors filed a motion to use this cash collateral. Both parties agreed that the creditor bank was entitled to keep an amount equaling the payoff of the house note, but the parties did not agree on how the house note's dragnet clause (and subsequent credit transactions between the parties) affected the reach of the lien to further proceeds. The Court granted the debtors motion in part and denied it in part, allowing the debtors to keep the amount over the balance of the house plus the amount owed on a vehicle in which the creditor held a security interest. The car debt was treated in a confirmed Chapter 13 plan, and the creditor was bound by the terms of that plan.