The Tide Turns Against Hybrid Plans in the Circuit Where They Began

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In this article from the February 2013 ABI Journal, I review the reasoning of several recent decisions which depart from previous precedent permitting the treatment of real estate loans beyond the term of a chapter 13 plan. Under the so-called hybrid plan, a chapter 13 debtor is permitted to bifurcate a loan to value, and pay the remaining balance beyond the term of the plan. This is significant because these decisions are from courts in the First Circuit, which originally approved these plans, and have approved them in cases for almost two decades. These decisions may have an impact on the issue in other jurisdictions.

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