In re Shealy (14-11295)

In this Chapter 13 case, an oversecured creditor attempted to amend its proof of claim several years after plan confirmation to add interest accrued from the date the petition was filed until the plan confirmation.  The creditor argued that under 11 U.S.C. § 506(b) such interest accrues inherently as part of its claim. Further, the creditor asserted that the Debtor’s motion to modify its plan canceled the res judicata effect of the plan confirmation. The court disagreed, holding that because the creditor failed to provide any notice of its intent to collect this interest prior to plan confirmation, the order confirming the Debtor’s Chapter 13 plan is res judicata and precludes the creditor from enlarging its claim post-confirmation.

Monday, May 6, 2019