UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF KENTUCKY

COVINGTON DIVISION

IN RE:

KATHERINE MARIE TUCKER

CASE NO. 08-20295

DEBTOR

ORDER

     This matter having come before the court on an Objection to Claim (DOC 36), and a hearing having been held on August 5, 2008, and the court having taken the matter under submission, the court hereby issues this order.

     This matter is submitted to the court on the issue of whether $4,660.42 in debt listed as secured on Deutsche Bank National Trust Company’s Proof of Claim # 6 should be treated as an unsecured debt.

    FACTS. The facts are not in dispute. Deutsche Bank National Trust Company’s claim is for debt owed on Debtor’s real property. Debtor lists the value of the real property as $88,000.00 on her schedules. Deutsche Bank National Trust Company’s proof of claim lists debt of $103,328.84. Thus, Deutsche Bank National Trust Company’s claim is undersecured. Deutsche Bank National Trust Company’s proof of claim lists $4,660.42 for other charges which includes $2,766.42 for an escrow shortage. Debtor argues that this $4,660.42 should be treated as an unsecured debt.

     CONCLUSIONS OF LAW. 11 U.S.C. § 506(b) does not allow postpetition interest, fees, costs and charges as part of a secured claim unless the claim is oversecured. Here, there is no dispute that the claim is undersecured. Thus, Deutsche Bank National Trust Company’s claim does not meet the requirements of 11 U.S.C. § 506(b).

     This court has recently ruled in In re Short, 08-20830, that

11 U.S.C. § 506(b) does apply to undersecured creditors. This court based that decision on In re Evans, 336 B.R. 749, 755 (Bankr. S.D. Ohio 2006). This court sees no reason to change its position of agreement with Evans.

     Deutsche Bank National Trust Company argues that even if this court agrees with Evans that the $2,766.42 in escrow shortage, which consists of payments made for tax and insurance, should still be held to be secured because Deutsche Bank National Trust Company is subrogated to the rights of the taxing authority. However, Deutsche Bank National Trust Company provides no case law or other authority saying that these costs should be viewed differently than other costs in a 11 U.S.C. § 506(b) context. Furthermore, this court sees no logical reason why these costs should be viewed differently.

     For those reasons, Debtor’s Objection to Claim (DOC 36) is hereby SUSTAINED. Deutsche Bank National Trust Company’s Proof of Claim # 6 shall be treated as an unsecured debt in the amount of $4,660.42. The remaining portion of Deutsche Bank National Trust Company’s Proof of Claim # 6 shall be treated as secured debt.

Copies to:

Michael L. Rice, Esq.

Casey M. Cantrell0Swartz, Esq.

Debtor

Beverly M. Burden, Esq.