UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
JIMMY RAY JUDE
VINA SUE JUDE CASE NO. 92-70289
This matter is before the Court upon the Motion for Approval of Reaffirmation Agreement filed herein on January 27, 1993 by The National Bank of Commerce of Williamson in Williamson, West Virginia. This is a Chapter 13 proceeding. A hearing was held on February 9, 1993 on the Motion, at which time the Court took the matter under advisement.
The Reaffirmation Agreement submitted with the Motion cites that the Debtor, Jimmy Jude, transferred the collateral for the loan by the Movant herein to a third party. Apparently that collateral was a 1992 Honda 4-wheeler vehicle and a motorcycle.
In this Motion the Debtors and Movant seek to reaffirm Debtors' obligation to Movant. It appears that Bankruptcy Code'524(c) and (d) contemplate reaffirmation of debts in Chapter 13 proceedings. The specific language of Subsection (d), however, suggests that the appropriate time to consider approval of a reaffirmation agreement is after the Court has determined whether or not to grant a discharge which, in the case of a Chapter 13 proceeding, is at the point where Debtors have complied with their Chapter 13 Plan pursuant to Bankruptcy Code '1328(a) or has entitlement to a hardship discharge pursuant to Bankruptcy Code '1328(b). In the present case, an Order Confirming Amended Chapter 13 Plan was entered November 10, 1992 confirming a Plan amended on September 25, 1992 to provide for 60 monthly payments of $625.00 each. Thus, the time to consider allowing reaffirmation of an indebtedness pursuant to '524 has not arrived in this particular case.
It appears to the Court, pursuant to'1328(a), assuming all payments are made by the Debtors, that the indebtedness to The National Bank of Commerce may be dischargeable since a discharge granted under '1328(a) discharges obligations described in Bankruptcy Code '523(a)(6).
It would appear therefore that the proposed Reaffirmation Agreement is premature and that the Motion to Approve it should be OVERRULED. A separate Order will be entered herein.
Dated this ______ day of ____________________, 1993.
BY THE COURT
Sidney N. White, Esq.
James B. Ratliff, Esq.
Paul Deaton, Esq.