Lineberger v. Henry

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 05-1294

In Re: DELORIS JEAN HENRY,

Debtor.
- - - - - - - - - - - - - -

FRANK JAMES LINEBERGER,

Appellant,

versus

DELORIS JEAN HENRY,

Appellee.

Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Graham C. Mullen, Chief
District Judge. (CA-03-367-3; BK-03-31155)

Submitted: August 26, 2005 Decided: October 28, 2005

Before NIEMEYER, MOTZ, and TRAXLER, Circuit Judges.

Vacated and remanded by unpublished per curiam opinion.

Frank James Lineberger, Appellant Pro Se. Terry Michael Duncan,
Charlotte, North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:

Frank James Lineberger appeals from the district court’s

order affirming the bankruptcy court’s orders denying his motion

for relief from the automatic stay in Deloris Henry’s bankruptcy

case, 11 U.S.C. § 362(a) (2000), overruling his objection to

confirmation of the bankruptcy plan, and confirming Henry’s Chapter

13 plan. We find that the plan proposed an impermissible

modification of the terms of the agreement between Henry and

Lineberger, and therefore vacate the district court’s order and

remand for further remand to the bankruptcy court for further

proceedings.

Section 1322 of the Bankruptcy Code provides in part that

a proposed Chapter 13 plan may “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.” 11 U.S.C. § 1322(b)(2) (2000). “[N]otwithstanding

paragraph (2) of this subsection, [the plan may] provide for the

curing of any default within a reasonable time and maintenance of

payments while the case is pending on any . . . secured claim on

which the last payment is due after the date on which the final

payment under the plan is due.” 11 U.S.C. § 1322(b)(5).

The final payment on the debt to Lineberger was due

before Henry filed her petition in bankruptcy. Thus, Lineberger’s

claim was fully matured prior to the bankruptcy filing and cannot

- 2 -
be “cured” within the meaning of § 1322(b)(5). See In re Litton,

330 F.3d 636, 643 n.7 (4th Cir. 2003) (stating that “cure provision

applies only to secured claims that have yet fully to mature”).

Although the plan proposed to pay the total amount due with

interest,* this proposal constituted an impermissible modification

of the terms of the debt because it sought to extend the term of

repayment and to alter the interest rate. See id. at 644; In re

Gianguzzi, 145 B.R. 792, 794 (Bankr. S.D.N.Y. 1992) (denying

confirmation and lifting stay for mortgagee where debtor proposed

to pay fully matured mortgage at reduced interest rate over five

year term of plan). Because § 1322(b)(2) prohibits confirmation of

a plan that seeks to modify the terms of a debt secured only by the

debtor’s principal residence, we find that the bankruptcy court

erred in confirming Henry’s Chapter 13 plan, and the district court

erred in affirming that decision.

Accordingly, we vacate the district court’s order and

remand with instructions for further remand to the bankruptcy court

for further proceedings. We dispense with oral argument because

the facts and legal contentions are adequately presented in the

materials before the court and argument would not aid the

decisional process.

VACATED AND REMANDED

*
The parties disagree as to the amount of the claim and the
applicable interest rate. We express no opinion on these issues.

- 3 -