Bullard v. Blue Hills Bank

Facts

P filed a petition for Chapter 13 bankruptcy. P filed a proposed repayment plan listing the various claims he anticipated creditors would file and the monthly amounts he planned to pay on each claim over the five-year life of his plan. P’s plan indicated that the mortgage was significantly “underwater”: the house was worth substantially less than the amount P owed the Bank (D). P’s third amended plan-the one at issue here-proposed a “hybrid” treatment of his debt to D. He proposed splitting the debt into a secured claim in the amount of the house’s then-current value (which he estimated at $245,000), and an unsecured claim for the remainder (roughly $101,000). Under the plan, P would continue making his regular mortgage payments toward the secured claim, which he would eventually repay in full, long after the conclusion of his bankruptcy case. The unsecured claim would be treated the same as any other unsecured debt, paying only as much on it as his income would allow over the course of his five-year plan. At the end of this period, the remaining balance on the unsecured portion of the loan would be discharged. P’s plan called for him to pay only about $5,000 of the $101,000 unsecured claim. D objected to the plan and, after a hearing, the Bankruptcy Court declined to confirm it. The Bankruptcy Court ordered P to submit a new plan within 30 days. P appealed to the Bankruptcy Appellate Panel (BAP) of the First Circuit. The BAP concluded that the order denying plan confirmation was not final. BAP nonetheless exercised its discretion to hear the appeal under a provision that allows interlocutory appeals “with leave of the court.” §158(a)(3). On the merits, the BAP agreed with the Bankruptcy Court that P’s proposed treatment of D’s claim was not allowed. The Court of Appeals dismissed his appeal for lack of jurisdiction. The Supreme Court granted certiorari. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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