IN RE: Douglas R. COMBS (2026)

MEMORANDUM OPINION AND ORDER ON THE CHAPTER 13 TRUSTEE'S OBJECTION TO ALLOWANCE OF CLAIM 20-1 (DOC. 45) FILED BY IH CREDIT UNION, INC.

I. Introduction

This matter is before the Court on the Trustee's Objection to Allowance of Claim (Court Claim 20, Trustee Claim(s) 48) (Doc. 45) (the “Claim Objection”), filed on the basis of IH Credit Union, Inc.’s (“IH” and “Creditor”) failure to file its deficiency claim—the only claim it filed in this second chapter 13 case filed by Douglas R. Combs (“Debtor” and “Mr. Combs”)—“within seventy (70) days of the petition ․ [Rule 3002(a) and (c)].” Claim Obj. at 1. Although the Claim Objection was originally unopposed, because the deficiency claim language in the surrender paragraph of the Nonstandard Provision (the “NSP”), paragraph 13, of Debtor's confirmed Amended Plan made no mention of IH needing to file a claim by the deadline under Bankruptcy Rule ¹ 3002(c), as do most surrender paragraphs in nonstandard provisions, the Court set the Claim Objection for a status conference and subsequently permitted briefing by the Chapter 13 Trustee, Debtor, and IH. Although the Court finds that the NSP language is ambiguous and conflicting, given the facts of this particular case (as well as Debtor's prior chapter 13 case in which he attempted to retain IH's collateral, a 2021 Keystone Bullet Travel Trailer), coupled with the long-standing practice of asserting deficiency claims in Dayton, and interpreting the ambiguous NSP language to not violate Bankruptcy Rule 3002(c), the Court will sustain the Claim Objection. But this opinion should serve as a cautionary tale that chapter 13 plan language can alter the normal functioning of Bankruptcy Rule 3002(c) and could, in another case, lead to a different result.

There are at least two takeaways from this case. First, the language used in the nonstandard provision in paragraph 13 of this District's mandatory chapter 13 plan matters and can have consequences, including contradicting or altering the Bankruptcy Code and Bankruptcy Rules, so choose wisely. Second, based on the briefing in this case and explanation of how the deficiency claims process works, as well as examining local rules of other bankruptcy courts, it might be worth revisiting Local Bankruptcy Rule (“LBR”) 3001-1(d)(2) to clarify the deficiency claim process, which was not well explained in the NSP language in this case, and which might serve to place less reliance on the nonstandard provision in each plan.

II. Jurisdiction

This Court has subject matter jurisdiction over this claim objection pursuant to 28 U.S.C. § 1334(a) and (b) and Amended General Order No. 05-02 of the United States District Court for the Southern District of Ohio (Amended Standing Order of Reference). This is a core proceeding under 28 U.S.C. § 157(b)(2)(B), and this Court has jurisdiction to determine whether a claim shall be allowed against the bankruptcy estate.

III. Background

A. Mr. Combs's Prior Chapter 13 Case

In the current case, Debtor Douglas R. Combs (“Mr. Combs” and the “Debtor”) filed a Voluntary Petition (Doc. 1) for chapter 13 bankruptcy relief under the Bankruptcy Code, along with his Schedules (A/B, C, D, E/F, G, H, I, and J), Statement of Financial Affairs, and related forms on December 11, 2024.

Mr. Combs had one prior case, another chapter 13 filed on April 15, 2022, which was dismissed on March 24, 2025, for failure to make plan payments, just over a month before he filed this current case. See Post-Confirmation Dismissal Order (Doc. 62), In re Combs, 22-30482 (Bankr. S.D. Ohio Nov. 6, 2024).² The Chapter 13 Standing Trustee's Final Report and Account (Doc. 67) filed in that prior case on February 19, 2025, reflected that during the approximately two years and two months that the case was pending after confirmation of the plan, IH was paid $9,885.54 in principal and $2,560.31 in interest on a timely filed secured claim of $26,290.20. The claims register for that prior case shows that IH filed a proof of claim, No. 8-1 (the “Prior Claim”), on May 6, 2022,³ for the amount of $26,290.20, secured by the “2021 Keystone Bullet TT” purchased from Paul Sherry RV's, Inc. That Prior Claim was signed by IH's attorney, W.D. Shane Latham, who likewise has represented IH in this chapter 13 case. And before filing the Prior Claim, Mr. Combs had filed a Chapter 13 Plan (Doc. 11) in which he identified the 2021 Keystone Bullet TT in paragraph 5.1.3 as a “910 Claim/Personal Property.” Chp. 13 Plan (Doc. 11) at 4, ¶ 5.1.3. This treatment did not change in either the First Amended Chapter 13 Plan (Doc. 19) or the Second Amended Chapter 13 Plan (Doc. 22), which was confirmed in his prior chapter 13 case. Under the confirmed plan, Debtor was to pay $555 each month, including 5% interest. Second Am. Chp. 13 Plan at 4, ¶ 5.1.3.⁴ In fact, the Nonstandard Provision in his Second Amended Chapter 13 Plan provided that “due to the retention of the recreational vehicle[,]” Mr. Combs agreed that the payout on nonpriority unsecured claims would remain at 100%. Id. at 10, ¶ 13.

Of further note, in his prior chapter 13 case, in which he was represented by the same counsel, Mr. Combs included a Nonstandard Provision in his confirmed Second Amended Chapter 13 Plan regarding a 2017 Honda Accord being surrendered to American Honda Finance Corporation, which stated as follows:

Debtor(s) propose to surrender their interest in 2017 Honda Accord to the Creditor American Honda Finance. Upon confirmation of the amended plan, the stay affecting this property shall be deemed modified to allow in rem disposition of the collateral to effect the surrender. Pursuant to L.B.R. 3001-1(d)(2), the Trustee will NOT pay on this claim to the listed Creditor until the Creditor files a deficiency claim. The deficiency claim shall be filed no later than 90 days from the date that the amended plan is confirmed. If the deficiency claim is filed more than 90 days after the amended plan is confirmed, then it shall be disallowed except upon further Order of the Court by the Creditor filing timely a Motion to Extend Time or a Motion to File Deficiency Claim Out of Time. The personal liability of the Debtor(s) shall be discharged upon completion of the Plan and the entry of Discharge.

Second Am. Chp. 13 Plan at 10, ¶ 13 (Nonstandard Provision), In re Combs, 22-30482 (Bankr. S.D. Ohio May 31, 2022) (Doc. 22) (emphasis added). Unlike the present case, American Honda Finance Corporation originally filed a proof of claim, No. 4-1, on April 22, 2022, for its secured claim, prior to the bar date under Bankruptcy Rule 3002(c); however, it did not file the amendment to its claim to assert the unsecured deficiency claim for $1,884.33 until January 18, 2024, which was approximately two months beyond the ninety (90) day period after the Second Amended Chapter 13 Plan was confirmed by entry of the Order Confirming Chapter 13 Plan (Doc. 22) and Awarding Attorney Fees (Doc. 31) on August 24, 2022. On that basis, the Chapter 13 Trustee filed his Trustee's Objection to Allowance of Claim (Court Claim 4) (Doc. 55), to which American Honda Finance Corporation did not respond, and an Order Sustaining Trustee's Objection to Allowance of Claim (Doc. 56) was entered, disallowing the deficiency claim filed after the deadline stated in the Nonstandard Provision, paragraph 13, of the confirmed Second Amended Chapter 13 Plan. Nonetheless, American Honda Finance Corporation apparently did understand that it needed to file a claim by the Bankruptcy Rule 3002(c) bar date in order to later file an amended deficiency claim.

B. Filings in the Current (Second) Chapter 13 Case

1. Schedules, Motion to Extend Stay, and Initial Chapter 13 Plan

In his Schedule A/B, Mr. Combs listed the 2021 Keystone Bullet Travel Trailer (the “2021 Keystone Camper”) under the category of “[w]atercraft, aircraft, motor homes, ATVs and other recreational vehicles” with a value of $25,000. Schedule A/B (Doc. 1) at 11, Part 2, item 4.1. And he listed IH Credit Union as holding a claim for $23,716.40 secured by the Trailer. Also on the petition date, Mr. Combs, by and through counsel, filed a Motion to Extend Automatic Stay (Doc. 6) (the “Motion to Extend Stay”), representing that he fell behind in payments in his prior chapter 13 case because he “switched jobs and his income decreased.” Mot. to Extend at 4. As a result, he planned to pay unsecured non-priority creditors twenty-five percent (25%) in this case, as opposed to one hundred percent (100%) as in his prior dismissed case.

The following day, Mr. Combs filed his initial Chapter 13 Plan (Doc. 8) (the “Initial Plan”). Of particular relevance, not only did Mr. Combs propose a lower distribution for unsecured nonpriority claims, but he listed the 2021 Keystone Camper as collateral that would be surrendered, such that “[u]pon confirmation of the Plan, the stay under § 362(a) ․ shall be terminated as to the surrendered property only. Rule 3015(g)(2).” Initial Plan at 7-8, ¶ 6. In addition, the Initial Plan contained the following Nonstandard Provision, which, except for the identity of the collateral and creditor, was exactly the same as the language used in the Nonstandard Provision in Mr. Combs's Second Amended Chapter 13 Plan in his prior chapter 13 case:

Debtor(s) propose to surrender his interest in 2021 Keystone Camper to the Creditor IH Credit Union. Upon confirmation of the amended plan, the stay affecting this property shall be deemed modified to allow in rem disposition of the collateral to effect the surrender. Pursuant to L.B.R. 3001-1(d)(2), the Trustee will NOT pay on this claim to the listed Creditor until the Creditor files a deficiency claim. The deficiency claim shall be filed no later than 90 days from the date that the plan is confirmed. If the deficiency claim is filed more than 90 days after the plan is confirmed, then it shall be disallowed except upon further Order of the Court by the Creditor filing timely a Motion to Extend Time or a Motion to File Deficiency Claim Out of Time. The personal liability of the Debtor(s) shall be discharged upon completion of the Plan and the entry of Discharge.

Initial Plan at 9, ¶ 13 (emphasis added). The language of the NSP remained unchanged in the First Amended Chapter 13 Plan (Doc. 24) (the “Amended Plan”) that Mr. Combs later filed on January 28, 2025 (Doc. 24), through the same counsel who had represented him in his first chapter 13 case. First Am. Plan at 9.

2. Motion for Stay Relief

On January 27, 2025, without awaiting confirmation of the Initial Plan that provided for surrender of the 2021 Keystone Camper, IH filed its Motion for “Removal of Stays” (Doc. 23) (the “Motion for Stay Relief”). This was prior to the seventy (70) day deadline to file proofs of claim under Federal Rule of Bankruptcy Procedure (“Bankruptcy Rule”) 3002(c), which was February 19, 2025, and is further discussed below. See Notice of Chp. 13 Bankr. Case (Doc. 10) at 2, § 8. In the Motion for Stay Relief, IH alleged that Debtor was in arrears on his obligations to IH and that Debtor was proposing to surrender the Trailer through the plan. Mot. for Stay Relief at 2, ¶ 3-4. The Motion for Stay Relief also asserted that: (a) IH held a “properly perfected security interest in Respondent, Douglas R. Combs's 2021 Keystone Bullet ․ [;]” (b) “Copies of the Contract and Title are attached hereto as Exhibits ‘A’ and ‘B’, respectively[;]” (c) “The average (used retail) valued of the Motor Vehicle is $24,495.00 as evidenced by the value guide attached hereto as Exhibit C[;]” and (d) “[t]he balance due to Movant is $23,968.53.” Mot. for Stay Relief at 2, ¶ 2. Attached to the Motion for Stay Relief were the Retail Installment Contract and Security Agreement, the Ohio Certificate of Title, and a J.D. Power valuation. IH, however, did not mention in its Motion for Stay Relief whether it would seek to hold Mr. Combs responsible for any deficiency claim, stating only that if IH was “not permitted to foreclose on its security interest ․, it will suffer pecuniary loss and damage.” Mot for Stay Relief at 2, ¶ 5.

3. Amended Plan and Claims Bar Date (Bankruptcy Rule 3002(c))

On January 28, 2025, the day after IH filed its Motion for Stay Relief, Debtor filed his Amended Plan (Doc. 24), as referenced above. As previewed in Mr. Combs’ Motion to Extend Stay, the Amended Plan proposed to pay a twenty-five percent (25%) dividend to creditors holding allowed nonpriority unsecured claims. Am. Plan at 1, ¶ 2.2. The unsecured nonpriority claims pool in this case, including IH's asserted deficiency claim of $14,781.18 filed on May 20, 2025, is approximately $38,116.08.

IH did not object to the Amended Plan. On February 25, 2025, stay relief in favor of IH was granted through the Order Removing Stays (Doc. 29), which permitted IH “to pursue its state court remedies regarding the subject 2021 Keystone Bullet ․”

The claims bar date, established by Bankruptcy Rule 3002(c), was February 19, 2025, less than a week before the Order (Doc. 29) was entered granting IH stay relief. But notwithstanding IH's timely filed secured proof of claim in Mr. Combs’ first chapter 13 case (and receipt of over $12,000 in disbursements from the Chapter 13 Trustee), and despite spending the time to file its Motion for Stay Relief, IH did not file a proof of claim in this (second) chapter 13 case. It is unclear why IH did not file an initial proof of claim in this case, particularly given that its Motion for Stay Relief was not granted until six (6) days after the claims bar date ran.⁵

4. Confirmation of Amended Plan

Subsequent to IH obtaining relief from the automatic stay, and following Debtor's resolution of an objection to confirmation filed by the Chapter 13 Trustee through the Agreed Order (Doc. 31) entered on March 6, 2025, the Order Confirming Chapter 13 Plan (Doc. 24) and Awarding Attorney Fees (Doc. 39) (the “Confirmation Order”) was entered on April 4, 2025. This meant that under the time period established in the NSP in the Amended Plan, which remained unchanged from the Initial Plan, IH had until Thursday, July 3, 2025, to file a “deficiency claim” for any deficiency balance due on the loan following disposition of the 2021 Keystone Camper.

5. IH's Deficiency Claim

On May 20, 2025, well within the ninety (90) day period established by the NSP in the confirmed Amended Plan, IH filed a deficiency claim for $14,781.18. See Claim 20-1 (the “Deficiency Claim”). The same Retail Installment Contract and Security Agreement that had been attached as Exhibit A in its Motion for Stay Relief was attached to its Deficiency Claim; however, IH did not state whether the 2021 Keystone Camper was sold or, if so, for how much. Instead, IH simply attached a “Statement” listing $7,075.38 in principal and $7,705.80 in interest, for a total of $14,781.18. In fact, considering that IH filed a secured proof of claim for $26,290.20 in Mr. Combs’ prior (first) chapter 13 case on May 6, 2022, and was paid over $12,000 by the Chapter 13 Trustee in that case, it is unclear whether IH is giving credit for any proceeds of sale of the 2021 Keystone Camper or whether IH is including postpetition interest in its Deficiency Claim.

C. Claim Objection, Status Conference, and Memoranda

The Trustee filed his Claim Objection on June 13, 2025, less than a month after the Deficiency Claim was filed, on the sole basis that IH's Claim 20-1 “was not filed within seventy (70) days of the petition ․ [Rule 3002(a) and (c)][.]” Claim Obj. at 1. Neither IH nor the Debtor opposed the Claim Objection. The deadline for responses was July 16, 2025.

On September 8, 2025, the Court, sua sponte, entered an Order Scheduling Status Conference on Chapter 13 Trustee's Objection to Allowance of Claim (Court Claim 20-1, Trustee's Claim 48) (Doc. 45) of IH Credit Union (Doc. 47) (the “Scheduling Order”), highlighting a concern with the NSP language in Debtor's confirmed Amended Plan due to a perceived conflict with Bankruptcy Rule 3002(c). Thus, the Court scheduled a telephonic status conference for September 25, 2025, and provided two weeks for counsel for the Chapter 13 Trustee, Debtor, and IH to file memoranda in advance and stated that if any of the parties “sufficiently addresses the Court's concerns, the Court may cancel the status conference[.]” Scheduling Order at 2.

On September 22, 2025, the Chapter 13 Trustee (the “Trustee”) filed his Memorandum in Support of Objection to Allowance of Claim (Doc. 45) (Doc. 49), citing In re Bauer, 660 B.R. 649 (Bankr. N.D. Ohio 2024) and United States v. Chavis (In re Chavis), 47 F.3d 818, 824 (6th Cir. 1995), and putting the NSP language in this case in context of the bigger picture of filing claims in chapter 13 cases under 11 U.S.C. § 502(b)(9) and Bankruptcy Rule 3002. The Trustee asserted that it would be “an impermissible circumvention of both 11 U.S.C. § 502 and Rule 3002” to permit a formerly secured creditor to “only file an unsecured deficiency balance” claim within ninety days after confirmation. Memo. in Supp. at 1. Debtor joined in, filing his Memorandum in Support of Trustee's Objection to Allowance of Claim (Court Claim 20, Trustee Claim(s) 48) (Doc. 50), though he did not cite any case law. And not to be left out, IH filed a Memorandum of Creditor, IH Credit Union, Inc. in Opposition to Chapter 13 Trustee's Objection to Allowance of Claim (Court Claim 20-1), (Trustees Claim 48) (Doc. 45) (Doc. 51). IH, understandably in light of the Court's Scheduling Order, cited the language of the NSP, advised that IH had in fact “sold the surrendered 2021 Keystone Bullet Travel Trailer at auction and received $13,665.00 as proceeds of sale[,]” alleged that it had been owed $23,968.53 on the date this (second) chapter 13 case was filed, and attached the Ohio Certificate of Title noting IH's lien.

Counsel for IH, the Debtor, and the Trustee all attended the status conference where they reiterated their perspectives. Counsel for IH described the NSP language as “ambiguous at best.”

As a result of the status conference held on September 25, 2025, and because the parties’ memoranda had only confirmed there was an issue with the NSP language, the next day, September 26, the Court entered an Order Setting Deadline for the Filing of Supplemental Memoranda (Doc. 45) (Doc. 53), providing the parties forty-five (45) days to file any supplemental memoranda, which were required to “contain reference to citations of legal authority, upon which counsel propose to rely in support of their respective position(s) in connection with the issues discussed by the Court.” Moreover, the Court advised that after review of those memoranda, the Court would determine what action may be necessary. On November 6, 2025, the Court entered an Agreed Order Extending Deadline for Filing of Supplemental Memoranda (Doc. 53) (Doc. 57), extending the 45-day period to and including December 10, 2025.

On December 10, 2025, each of the interested parties filed a Supplemental Memoranda, beginning with the Chapter 13 Trustee's Supplemental Memoranda in Support of Objection to Allowance of Claim (Docs. 53 & 57) (Doc. 59). In short, the Trustee focused on the inclusion of a reference to LBR 3001-1(d)(2) in the NSP language, which does talk about filing an amended proof of claim; however, the language of the NSP does not. The Trustee also asserts that the deadline to file a deficiency claim “is conditioned upon the initial filing of an allowed secured claim[,]” but the language of the NSP did not state that condition. The Trustee did not cite any further case law in support of his position; however, he noted that this same language “has been used in Dayton Chapter 13 plans for over twenty years.” Supp. Mem. in Supp. (Doc. 59) at 2. Next up, the Debtor filed his Second Memorandum in Support of Trustee's Objection to Allowance of Claim (Court Claim 20, Trustee Claim(s) 48) (Doc. 60). This filing echoed the Debtor's prior Memorandum in Support (Doc. 50) but added citations to case law, such as In re Tench, No. 15-8026, 2016 WL 2892497, 2016 Bankr. LEXIS 1989 (B.A.P. 6th Cir. May 11, 2016). The Debtor argued that use of this NSP “is an established practice in this district” and “that this provision is intended for an amended deficiency claim.” Second Mem. in Supp. (Doc. 60) at 4. Lastly, IH filed its Supplemental Memorandum of Creditor, IH Credit Union, Inc. in Opposition to Chapter 13 Trustee's Objection to Allowance of Claim (Court Claim 20-1, Trustees Claim 48) (Docs. 53 and 57) (Doc. 61). Similarly, this filing largely echoed IH's prior Memorandum in Opposition (Doc. 51) but added that in a chapter 13 plan in another case, which also involved the surrender of a recreational vehicle, the NSP language stated that “[t]he Creditor must timely file a proof of claim pursuant to B.R. 3002(c).” Suppl. Mem. in Opp. (Doc. 61) at 2 (citing First Am. Chp. 13 Plan (Doc. 18), In re Hensley, No. 25-31563 (Doc. 18) (Bankr. S.D. Ohio Oct. 9, 2025)).⁶ And IH argued that because this language was not in the NSP in this case, “its omission bolsters the argument that the date for filing a deficiency claim established by the confirmed Amended Plan is the relevant deadline in this case.” Id.

Finally, also in his Memorandum in Support, the Trustee takes issue with IH's Claim 20-1 because it “sets forth no evidence that Creditor had a secured interest in the travel trailer beyond the retail installment contract” because the “Trustee has no information regarding whether Creditor had a perfected security interest or the amount owed as of the date of filing.” Mem. in Supp. at 2. That information might be gleaned from Mr. Combs's prior chapter 13 case in which IH filed a secured claim for $26,290.20, and the Trustee paid IH $9,885.54 in principal and $2,560.31 in interest—a total of $12,445.85 on account of its secured claim, as reflected in the Chapter 13 Standing Trustee's Final Report and Account (Doc. 67), Case No. 22-30482, as well as IH's Motion for Stay Relief filed in this chapter 13 case. But perhaps that does not provide the Trustee all the information he seeks, and there would have been further bases upon which to object to Claim 20-1. However, the only objection presently before this Court is that IH's proof of claim was not filed within the period set by Bankruptcy Rule 3002(c).

IV. Analysis

A. Overview

The Claim Objection filed by the Trustee states as its only grounds that “[t]he proof of claim was not filed within seventy (70) days of the petition ․ [Rule 3002(a) and (c)].” Claim Obj. at 1. Although not expressly stated, but as confirmed by his subsequent memoranda, that the Trustee seeks to disallow IH's Claim 20-1 pursuant to § 502(b)(9), which provides that a claim should not be allowed if the “proof of claim is not timely filed,” unless the Bankruptcy Rules permit a “tardily filed” proof of such claim. Further, IH has not filed a motion to extend the time to file a proof of claim on the only basis possible, which is that “notice was insufficient to give [IH] a reasonable time to file.” Fed. R. Bankr. P. 3002(c)(7).⁷ And it is almost certain that IH could not succeed on this argument given that it filed a Motion for Stay Relief on January 27, 2025, twenty-three (23) days before the February 19, 2025 bar date under Bankruptcy Rule 3002(c). See Fed. R. Bankr. P. 9006(b)(3)(A) (providing that a court may extend the time to act under Rule 3002(c) “only as permitted by [that] rule[ ].”).

The briefing in this matter, while helpful, was not exhaustive, and this is a tough issue. Accordingly, the Court took extra time to contemplate the issue before ruling, particularly given the potential impact on chapter 13 practice. The Court also notes that the parties did not mention Mr. Combs’ immediately preceding chapter 13 case, dismissed less than a month before this case was filed, in which he had unsuccessfully attempted to retain the 2021 Keystone Camper as a “910” vehicle.⁸ On the one hand (no one-handed lawyer jokes, please), a plain language reading of the NSP suggests that IH did not need to do anything more to have an unsecured deficiency claim than to file a proof of claim by or before the 90th day after the Amended Plan was confirmed. The plain language of the NSP says that IH just had to “file a deficiency claim.” It nowhere mentioned that IH first had to file a secured claim by the Bankruptcy Rule 3002(c) bar date, as is often expressly required in nonstandard provisions in chapter 13 plans filed with this Court. See, e.g., First Am. Chp. 13 Plan, In re Hensley, No. 23-31026 (Bankr. S.D. Ohio Aug. 25, 2023) (Doc. 17) (containing a surrender paragraph in the nonstandard provision). And it was striking to the Court as one of the first NSPs seen with no reference to Bankruptcy Rule 3002(c).⁹

On the other hand, the NSP language is an iteration of language used in other chapter 13 plans in this Court, which discusses assertion of a deficiency claim within a deadline established by confirmation of the chapter 13 plan, and mentions LBR 3001-1(d)(2), which has been in place in very similar form for over thirty years. The language in this NSP, however, is ambiguous and potentially in conflict with Bankruptcy Rule 3002(c) and LBR 3001-1(d)(2). Words, or the lack thereof, can have consequences, but in this specific context, utilizing rules of interpretation applicable to chapter 13 plan language, there is enough to go on to conclude that this NSP language did not derail the established deficiency claims process. However, had the NSP simply referenced Bankruptcy Rule 3002(c), the Claim Objection likely would have been granted without this opinion and without wading into these issues. And, as noted below, had IH simply filed a secured claim in this case, as it had in Mr. Combs’ prior chapter 13 case, the Trustee would not have filed the Claim Objection.

B. The Claims Process in Chapter 13

Creditors may file a proof of claim in a bankruptcy proceeding. 11 U.S.C. § 501. Such claims are allowed “except to the extent that ․ proof of such claim is not timely filed[,]” with certain exceptions not applicable here. 11 U.S.C. § 502(b)(9). In a chapter 13 case, also with certain exceptions not applicable here, a “proof of claim is timely if filed within 70 days” of the petition.” Fed. R. Bankr. P. 3002(c). The 70-day deadline generally creates a “bar date,” after which late filed claims are disallowed, except to the extent a different deadline is set. See, e.g., In re Ditech Holding Corp., No. 19-10412, 2024 Bankr. LEXIS 1735, at *16-17 (Bankr. S.D.N.Y. July 26, 2024). The purpose of the bar date is to prevent continued litigation and to allow a debtor to timely receive their fresh start through the bankruptcy process. Id. The bar date is especially important in the chapter 13 context because timely claims help determine the efficacy of the proposed plan. Chavis, 47 F.3d at 824. Courts have typically held that the bar date is a strict deadline. In re Anthony, No. 07-33275, 2013 Bankr. LEXIS 5573, at *11-14 (Bankr. N.D. Ind. Oct. 24, 2013).

By default, Bankruptcy Rule 3002(c) governs the time to file proofs of claim in a chapter 13 case. In re Bauer, 660 B.R. 649, 667-68 (Bankr. N.D. Ohio 2024) (Gustafson, J.). There are seven enumerated exceptions to the time limit for filing claims, none of which apply here. And Bankruptcy Rule 3002(c)(7), which permits an extension of the bard date, does not apply in this case because there is no assertion that the Creditor received insufficient notice of the bankruptcy case and it appears based on the Notice of Bankruptcy and Motion for Stay Relief that IH had timely notice. Further, due to Bankruptcy Rule 9006(b)(3)(A), the excusable neglect standard under 9006(b)(1)(B) cannot be used to enlarge the deadline to file claims in a chapter 13 case. See, e.g., In re Tench, 2016 Bankr. LEXIS 1989 at *8, 2016 WL 2892497, at *3 (reversing a bankruptcy court order allowing late-filed claims in a chapter 13 case “under Rule 9006(b)’s excusable neglect exception”). And IH does not argue that any of the exceptions apply to them, only that they relied on the language of the NSP.

The Chapter 13 Trustee and the Debtor take the position that the claims deadline is “absolute” and subject to only a few strictly applied exceptions. They argue that IH must have filed a secured claim before the bar date so that it could later amend that claim to assert the deficiency claim within ninety days after confirmation of the plan. Further, they argue the goal of a fixed deadline is to give creditors and debtors a full picture of the claims against the bankruptcy estate to enable administration of the bankruptcy case. Chavis, 47 F.3d at 824. While true, Chavis dealt with an amendment to a proof of claim, to include additional tax years, filed by the Internal Revenue Service eleven months after the Bankruptcy Rule 3002(c) bar date. Id. at 819. Debtor also argues that a bankruptcy court's discretion cannot supersede the unambiguous language of Bankruptcy Rule 3002(c). Bauer, 660 B.R. at 667. The Debtor also argues that Tench is on-point; however, that opinion only addressed whether, in the context of a claim filed eight days late, “a bankruptcy court may allow claims that do not comply with the time limitations established by Bankruptcy Rule 3002(c) for the reason of excusable neglect.” In re Tench, 2016 Bankr. LEXIS 1989 at *2, 2016 WL 2892497, at *1. And, finally, the Debtor argues that In re Tesch, 628 B.R. 60 (Bankr. W.D. Mich. 2021) stands for the proposition that a similar nonstandard provision was found to “not interfere with the deadline set forth in Bankruptcy Rule 3002(c).” Second Mem. in Supp. (Doc. 60) at 3-4.

C. The NSP Language and the Deficiency Claim Process

This case concerns a somewhat unique circumstance in which the NSP in both the Debtor's Initial and Amended Plans did not state that IH needed to file a proof of claim by the deadline—the bar date—under Bankruptcy Rule 3002(c) in order to preserve its right to have a deficiency claim. And the NSP did not say the deficiency claim needed to be an amendment to an earlier filed secured claim, or that it was “conditioned upon” first filing a secured claim. In other words, the NSP did not describe the preliminary steps that IH would have to take in order to end up with a valid and timely deficiency claim, as the Trustee has since explained in his memoranda. Rather, the NSP simply set a ninety (90) day period for IH to “file a deficiency claim.” Am. Plan at 9, ¶ 13. Not to amend a previously filed claim, but to file a claim (using the term “file” three times). Further, it notified IH that any deficiency claim would be disallowed only “[i]f the deficiency claim is filed more than 90 days from the date the plan is confirmed.” Am. Plan at 9, ¶ 13. On a literal plain reading of the NSP language, IH seemingly complied with these terms by filing Claim 20-1 on May 20, 2025, which was well within the 90-day deadline set by the confirmed Amended Plan. But because IH, to which the Debtor always intended to surrender the collateral during this second chapter 13 case, had not previously filed a secured claim by the bar date set by Bankruptcy Rule 3002(c), which ran months before the Amended Plan was confirmed, the Trustee objected to the deficiency claim as untimely.

It is established practice, and LBR 3001-1(d) presumes by its language, that in order for creditors to participate in and receive payments under a chapter 13 plan, they need to file a claim by the bar date set by Bankruptcy Rule 3002(c). LBR 3001-1(d)(2), concerning the effect of relief from stay, states that it applies to “an entity holding an allowed secured claim that obtains relief from the automatic stay” and provides that such “entity may file an amended proof of claim for any deficiency claim after the collateral has been sold[.]” LBR 3001-1(d)(2) (emphasis added).¹⁰ It does not expressly mention Bankruptcy Rule 3002(c), and there is no LBR 3002-1. Further, bankruptcy courts in other districts have analogous, but somewhat more detailed local bankruptcy rules that discuss amending a proof of claim, as opposed to just filing a deficiency claim.¹¹ But here, the language used by the Debtor in his NSP did not clearly express that this was the requirement for IH to have a deficiency claim. Instead, the NSP appeared, at first glance and in contrast to the NSP language used in some other chapter 13 plans before this Court, to contradict the established practice, and could lead one to believe that IH only needed to file, not amend, a proof of claim for its deficiency claim within the 90-day period after the Amended Plan was confirmed.

The terms “file” and “amend” have different connotations when it comes to proofs of claim; the first term is commonly understood to refer to the filing of an initial proof of claim, and the latter term is commonly understood to refer to the filing of a subsequent amendment of a previously filed proof of claim. This is exemplified by the official Proof of Claim form, which contains a question in Part 1, item 4, which asks “[d]oes this claim amend one already filed?”¹² Accordingly, a fair reading of the plain language of the NSP in this case is that IH only needed to file its claim post-confirmation as a deficiency claim, not amend a previously filed secured claim to reflect the deficiency post-surrender. The language in the NSP in this case is similar to the language used in the Notice of Chapter 13 Bankruptcy Case (Doc. 10) (the “Notice of Bankruptcy”), which talks about filing a claim, e.g., “[i]f you do not file a proof of claim by the deadline, you might not be paid on your claim.” Notice of Bankr. at 2, ¶ 8. That IH would only need to file one claim, rather than filing a secured claim and then an amended claim, also makes some sense given that this was Mr. Combs's second chapter 13 case filed less than a month after his first case was dismissed, in which he proposed from the outset to surrender the 2021 Keystone Camper he had attempted to retain in his first case. However, IH had timely filed a secured claim in Debtor's first chapter 13 case, based on which the Chapter 13 Trustee made payments of $9,885.54 in in principal plus $2,560.31 in interest to IH, such that IH obviously understands how the process normally works. And the Debtor and the Trustee should, as a result, have had a good idea of how much more IH was owed very shortly before this second chapter 13 case was filed.

The Trustee explained in his filings in support of his objection that the NSP in question is “a framework for the allowance of an amended unsecured deficiency balance to a timely filed secured proof of claim” and that “the language of paragraph 13 is contingent upon the timely filing of a secured proof of claim by creditor.” Chp. 13 Tr.’s Mem. in Supp. of Obj. to Allowance of Claim (Doc. 49) at 1 (emphasis added). But none of those words are used anywhere in the NSP at issue. Thus, it requires interpretation of this ambiguous language to glean those requirements. The word “amend” is not used once. Nor is “secured.” Nor is “conditioned upon.” Nor is there any mention of the deadline under Bankruptcy Rule 3002(c) or the Notice of Bankruptcy that was issued the day after the Initial Plan was served and mailed to the creditors a week later. See BNC Cert. of Mailing (Doc. 13). Therefore, a creditor would have to be familiar with Bankruptcy Rule 3002 to construe “file” a deficiency claim by 90 days after confirmation of the chapter 13 plan to mean file a secured claim by the deadline under Bankruptcy Rule 3002(c) months before the plan is confirmed in order to then amend that claim after the collateral is sold within the said 90-day period. IH, however, had successfully participated in and obtained payments in Debtor's first chapter 13 case, is a lender that has appeared in a number of cases before this Court, and should be familiar with the Bankruptcy Rules and Local Bankruptcy Rules; thus, too much reliance on the words of the NSP may lead to an unwarranted result in this particular case.

D. The Legal Questions Presented

The parties’ memoranda essentially pose two legal questions, though nobody squarely addressed the initial question. First, is Bankruptcy Rule 3002(c) “absolute,” as the Debtor puts it, or can the language of the NSP in the confirmed Amended Plan alter or override this Bankruptcy Rule? If the answer to that question is “yes,” then the question is how to interpret the NSP.

The initial legal question, restated in more detail, is whether an NSP in a confirmed chapter 13 plan, which is binding pursuant to § 1327(a)¹³ and is a final order accorded res judicata effect, can negate or dispense with (or effectively extend for one creditor) the claim filing deadline in Bankruptcy Rule 3002(c)? The Supreme Court of the United States has told us that a confirmed chapter 13 plan can violate title 11 of the United States Code (the “Bankruptcy Code”) and still stand as a final judgment that is res judicata, such that by extension it surely can alter or override a Bankruptcy Rule (although a bankruptcy court should not confirm provisions that violate the Bankruptcy Code). See United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 130 S.Ct. 1367, 176 L.Ed.2d 158 (2010). Thus, we move to the second thornier question, which is whether the NSP conflicts with Bankruptcy Rule 3002(c) and LBR 3001-1(d)(2), such that IH's deficiency claim should be deemed timely? The NSP language requires a fair amount of “gap filling” interpretation and context to reach the conclusion that the actual words used in the NSP in this case required IH to first file a secured claim by the deadline in Bankruptcy Rule 3002(c) and to then file an amended claim for the deficiency balance by the deadline set through the NSP. Ultimately, after sorting through the ambiguities, should the Court allow or disallow IH's claim? This presents a deceptively difficult issue that is worth examining because it is important to keep in mind that the words of chapter 13 plans matter and can alter the function of the Bankruptcy Code and Rules.

E. The Binding Effect of Confirmation Under § 1327(a) and Espinosa

Once a chapter 13 plan is confirmed, § 1327(a) provides that it governs and binds both “the debtor and each creditor” and “is treated as the exclusive and transcendent relationship between the debtor and the creditor.” Salt Creek Valley Bank v. Wellman (In re Wellman), 322 B.R. 298, 301 (B.A.P. 6th Cir. 2004). This harkens all the way back to Stoll v. Gottlieb, 305 U.S. 165, 59 S.Ct. 134, 83 L.Ed. 104 (1938), which discussed the res judicata effect of a confirmed plan long before § 1327(a) was enacted, which embodies the same concept built on the understanding that “a bankruptcy court's order confirming a Chapter 13 plan is a final, appealable order.” In re Tirone, No. 11-31883, 2012 Bankr. LEXIS 3661, at *4, 2012 WL 3249551, at *2 (Bankr. N.D. Ohio Aug. 7, 2012) (citing Espinosa, 559 U.S. at 269, 130 S.Ct. 1367). A confirmed chapter 13 plan is “enforceable and binding even if such order contains terms for which the bankruptcy court lacked statutory authority.” In re Fam, 645 B.R. 1, 8 (Bankr. D.D.C. 2022) (citing Espinosa, 559 U.S. at 273-74, 130 S.Ct. 1367). This is why bankruptcy courts have been instructed to not confirm chapter 13 plans that contradict the Bankruptcy Code, even in the absence of objections to confirmation. See Espinosa, 559 U.S. at 275, 130 S.Ct. 1367.

“Even if a bankruptcy court order confirming a debtor's Chapter 13 plan violates the Bankruptcy Code, the order is a final judgment.” In re Slade-Lanier, No. 12-13436, 2014 Bankr. LEXIS 2485, at *9, 2014 WL 2565919, at *3 (Bankr. N.D. Ohio June 6, 2014) (citing Espinosa, 559 U.S. at 269, 130 S.Ct. 1367). Because “[a] confirmed chapter 13 plan is essentially a binding contract between a debtor and each creditor[,] ․ the effect of the plan's language is governed by general rules of contract interpretation.” In re Mershon, No. 03-12973, 2005 WL 4030035, at *2, 2005 Bankr. LEXIS 2888, at *4 (Bankr. S.D. Ohio July 21, 2005) (Hopkins, J.) (citing In re Harvey, 213 F.3d 318, 321 (7th Cir. 2000)). Further, “[i]f there is any doubt” about whether the terms of the plan do or do not allow a creditor to take certain actions, “the language is to be construed against the debtor who drafted the same.” Id. at *2, 2005 Bankr. LEXIS 2888, at *4-5. However, ambiguous plan provisions should, if possible, be interpreted to comply or comport with the Bankruptcy Code, not to violate it. See Meredith v. BMW Fin. Servs. NA, LLC (In re Burnsed), No. 19-41654-EJC, 2021 Bankr. LEXIS 1897, at *32-33, 2021 WL 3013300, at *11 (Bankr. S.D. Ga. July 15, 2021) (quoting In re Hamilton, No. 14-10665, 2017 Bankr. LEXIS 1169, at *9, 2017 WL 1533382, at *4 (Bankr. D.N.M. Apr. 27, 2017); In re Sledge, No. 15-51114, 2018 Bankr. LEXIS 2595, 2018 WL 4090584 (Bankr. N.D. Ohio Aug. 27, 2018); Hill v. Greentree Serv., LLC (In re Hill), 572 B.R. 793, 799 (Bankr. N.D. Ga. 2017) (“[T]he plan should be interpreted to comply with the Bankruptcy Code.”); In re Huddle, No. 06-11076-SSM, 2007 Bankr. LEXIS 2770, at *18, 2007 WL 2332390, at *6 (Bankr. E.D. Va. Aug. 13, 2007) (“The general rule is that ambiguous plan provisions are construed so as to comport with rather than contravene express provisions of the Bankruptcy Code.”)).

Similar to the situation in other cases discussed below, the Trustee and the Debtor essentially argue that “the claims allowance process and procedures under 11 U.S.C. § 502[,]” as well as Bankruptcy Rule 3002(c), govern over the NSP language in the confirmed Amended Plan and require disallowance of IH's deficiency claim because it was not an amendment to a previously filed and allowed secured claim. The implication in the Trustee's and Debtor's submissions is that the claims allowance process is sacrosanct and the language of the NSP in the confirmed Amended Plan is not as important, particularly because it referenced LBR 3001-1(d)(2), which talks about an amended claim (although the NSP language nowhere discusses an amended claim and therefore could be construed to conflict with LBR 3001-1(d)(2) as well). But the analysis of whether a confirmed chapter 13 plan or the claims allowance process governs, if they are in conflict, was “emphatically changed” by Espinosa. In re Tirone, 2012 Bankr. LEXIS 3661 at *6-7, 11-14, 2012 WL 3249551, at *3, 5 (citing In re McLemore, 426 B.R. 728, 744 (Bankr. S.D. Ohio 2010)).

F. Analogous Case Law from Outside the Sixth Circuit

This is not the first time this issue has come up. In a case not cited by the parties, a Florida bankruptcy court decided a case with a very similar, albeit not identical, chapter 13 plan provision, as well as a similar, but not identical, local bankruptcy rule. The provision in that case gave the creditor ninety days to file “an unsecured Proof of Claim regarding any deficiency balance that may occur upon the sale of the subject collateral” and did not mention any other claim filing deadline. In re Shiver, 484 B.R. 468, 470 (Bankr. N.D. Fla. 2012). Therein, the debtor proposed to surrender real estate to the secured creditor and the confirmed chapter 13 plan provided that “[t]he secured creditor shall have ninety (90) days from confirmation of the Chapter 13 Plan to file an unsecured Proof of Claim regarding any deficiency balance ․” Id. at 470. The plan further stated that “[i]f no unsecured Proof of Claim is filed within the given time period ․, the creditor will then be barred from filing an unsecured Proof of Claim.” Id. Thus, notwithstanding “Bankruptcy Rule 3002, together with Rule 9006(b)(3) and Code § 502(b)(9),” and although the creditor had not taken the “the prudent approach” of filing an initial proof of claim by the deadline in Bankruptcy Rule 3002(c), the Court overruled the debtor's objection, reasoning as follows:

The language of the Chapter 13 plan here is unambiguous and contains no requirement for Hancock Bank's unsecured deficiency claim to be preceded by or conditioned on a prior filed claim. Even if the plan language were ambiguous, as the Debtor argues, any ambiguity would be construed against the Debtor, as drafter of the document. In re Woods, 406 B.R. 293, 299 (Bankr. N.D. Ohio 2009) (“it is also true that ambiguities in plan language must be construed against a debtor, as the drafter of the document.”).

Id. at 471. The Shiver Court went on to further analyze the situation and concluded that:

Here, as in Bateman, if the Debtor wanted to object to the Creditor's claim or modify the language in his plan to require Hancock Bank to file an initial claim by the March 15 bar date, it could and should have done so prior to confirmation. However inconsistent the Debtor's plan language may arguably be with the absolute bar date for claims, once the plan was confirmed, 11 U.S.C. § 1327 bound Hancock Bank and the Debtor to the plan. To hold otherwise under the facts in this case would create doubt in the mind of all parties as to the plan confirmation process.

Id. at 474 (emphasis added) (citing In re RCP Invs. VI, LLC, 2012 Bankr. LEXIS 5390, 2012 WL 5832427 (Bankr. M.D.N.C. 2012)). The Shiver Court observed that “[i]t is the specific facts of this case that are driving this Court's decision.” Shiver, 484 B.R. at 474.

Here, as in Shiver, “the Debtor [ ] confirmed a plan” that gave IH a 90-day period to file a deficiency claim, “which it did.” Id. Similarly, because the pending objection by the Chapter 13 Trustee “now seeks to use Rule 3002(c) as a sword to argue that the very claim arguably provided for in [the Debtor's] plan is untimely[,]” the present objection could be seen as a “gotcha” for IH under “the terms of the confirmed plan[,]” unless, in this case, the citation to LBR 3001-1(d)(2) in the NSP is construed, in and of itself, to provide the interpretational key to understanding the language of the NSP. Id. The potential “gotcha” nature is also mitigated by the fact that IH knew how to navigate, and did successfully navigate, the claims process in Debtor's prior chapter 13 case in which the same NSP language was used, albeit for another creditor.

Notably, at the time the Shiver case was decided, the United States Bankruptcy Court for the Northern District of Florida's equivalent local bankruptcy rule, LBR 3002-1, permitted a secured creditor “sixty (60) days from confirmation of the Chapter 13 Plan to file an unsecured proof of claim regarding any deficiency balance that may occur upon the sale of the subject collateral[.]” In re Reado, Nos. 19-31379, 20-30011, 19-31341, 2020 Bankr. LEXIS 3704, at *5-6, 2020 WL 9421353, at *2 (Bankr. N.D. Fla. Oct. 7, 2020). This is very similar to the language of the NSP in this case. And LBR 3002-1 in the Northern District of Florida was subsequently amended in 2020, in relevant part, to “clarify the process for a secured creditor's deficiency claim for surrendered collateral, clarifying that such claims should be filed as amendments to the original, timely filed secured claim.” N.D. Fla. LBR 3002-1 Adv. Comm. Note to 2020 Amendment.

In addition to the Shiver opinion discussed above, the Bankruptcy Appellate Panel (“B.A.P.”) for the First Circuit has addressed a similar issue, though also not involving exactly the same language. See Pawtucket Credit Union v. Boyajian (In re Diruzzo), 527 B.R. 800 (B.A.P. 1st Cir. 2015). Therein, the confirmation order provided that a second mortgage claim would be allowed as a wholly unsecured claim, even though the mortgagee did not file a claim by the bar date. Id. at 801-02. In fact, the mortgagee filed a proof of claim five months after the bar date, the chapter 13 trustee objected, the mortgagee did not respond, and “the bankruptcy court sustained the objection.” Id. at 802. It was not until five years later that the issue came to a head when the trustee discovered his office had been paying the mortgagee under the confirmed chapter 13 plan notwithstanding disallowance of the proof of claim. Id. He sought to recover the funds he believed to have been erroneously paid to the mortgagee and the mortgagee objected on the basis that “despite its later untimely proof of claim, the confirmation order had res judicata effect that barred collateral attacks against the allowed claim.” Id.

The B.A.P. for the First Circuit discussed the claims allowance process and observed, as is true in the Sixth Circuit and under LBR 3001-1(d)(2), that “in chapter 13 cases, a timely filed proof of claim is a precondition to allowance of an unsecured claim and the creditor's right to receive distributions under the plan.” Id. at 804 (citing Vicenty v. San Miguel Sandoval (In re San Miguel Sandoval), 327 B.R. 493, 512 (B.A.P. 1st Cir. 2005); see also Municipality of Carolina v. González (In re González), 490 B.R. 642, 647 (B.A.P. 1st Cir. 2013) (“If an unsecured creditor's claim is to be allowed in a chapter 13 case, a proof of claim must be filed․ Under the Bankruptcy Code and [Bankruptcy] Rule 3002[(a)] an unsecured creditor must file a proof of claim in order to have a right to payment from the estate.”) (citations omitted); 4 Collier on Bankruptcy ¶ 501.01[2][a], [b]). Ultimately, however, the salient issue was framed as follows:

[T]he crucial issue here is whether the binding effect of a confirmed chapter 13 plan prevails over a claim that is disallowed under the claims allowance process set forth in the Bankruptcy Code and Rules.

Diruzzo, 527 B.R. at 805. After analyzing case law, as well as Mr. Lundin's treatise, the B.A.P. for the First Circuit held that under 11 U.S.C. § 1327(a) and Espinosa, the confirmed chapter 13 plan governed over the claims allowance process, stating:

[A]lthough PCU failed to comply with the provisions of the Bankruptcy Code and Bankruptcy Rules which require an unsecured creditor to file a proof of claim in order to have an allowed claim and receive distributions, it is clear that, in light of Espinosa and its progeny, the binding effect of the confirmed plan trumps the claims allowance process in this case.

Diruzzo, 527 B.R. at 808-09 (quoting In re Galindez, 514 B.R. 79, 96-97 (Bankr. D.P.R. 2014) (quoting Keith M. Lundin & William H. Brown, Chapter 13 Bankruptcy, 4th Edition, § 229.1, at ¶ [83], sec. rev. Oct. 8, 2010, www.Ch13online.com, for the point that Espinosa should be read broadly)). Obviously, however, the language in the confirmed chapter 13 plan in Diruzzo differed from the case at bar in which the NSP did not expressly allow a claim for IH.

To the extent the NSP language in the confirmed Amended Plan is read to authorize IH to file a proof of claim for its unsecured deficiency balance within 90 days after confirmation, even if that is contrary to the requirements of Bankruptcy Rule 3002(c), and by extension Bankruptcy Rule 9006(b)(3)(A), the same “crucial issue” would appear to be present in this case. And in this event, we get into the realm of post-Espinosa analysis of the res judicata effect of a confirmed chapter 13 plan. See Diruzzo, 527 B.R. at 806 (quoting United States v. Monahan (In re Monahan), 497 B.R. 642, 651 (B.A.P. 1st Cir. 2013) (quoting In re McLemore, 426 B.R. 728, 744 (Bankr. S.D. Ohio 2010) (citing Espinosa, 559 U.S. at 263-640, 130 S.Ct. 1367))). Therefore, it is not enough to stand on Bankruptcy Rule 3002(c) being “absolute,” or to presume that the claims allowance process in chapter 13 is so sacrosanct that a confirmed chapter 13 plan could not possibly change that dynamic. It can. See 11 U.S.C. § 1327(a); see also Espinosa, 559 U.S. at 275, 130 S.Ct. 1367 (concluding that even if confirmation of chapter 13 plan was legal error, contrary to §§ 1328(a)(2) and 523(a)(8), the confirmation order “remains enforceable and binding” which is why “the Code makes plain that bankruptcy courts have the authority—indeed, the obligation—to direct a debtor to conform his plan to the requirements of §§ 1328(a)(2) and 523(a)(8).”).

Neither of the cases cited by the Trustee contradict the analysis that the binding effect of a confirmed chapter 13 plan can prevail over the claims allowance process. See Mem. in Supp. (Doc. 49) at 1 (citing In re Bauer, 660 B.R. 649 (Bankr. N.D. Ohio 2024); In re Chavis, 47 F.3d 818, 824 (6th Cir. 1995) (pre-dating Espinosa)). Bauer concerned whether a bankruptcy court has the equitable power to deem a claim timely filed, contrary to § 502(b)(9) and Bankruptcy Rules 3002(c) and 9006(b), prior to the confirmation of a chapter 13 plan. 660 B.R. at 675 (“in this case, where the Chapter 13 Plan has not been confirmed”). It did not concern a conflict between a confirmed chapter 13 plan and the claims filing process. Nor did Chavis, which concerned an amendment to a proof of claim by the Internal Revenue Service, eleven months after the Bankruptcy Rule 3002(c) deadline, but prior to the 1994 amendments to the Bankruptcy Code that added subsection (9) to § 502(b). 47 F.3d at 823 (wherein the Sixth Circuit “harmonized” that “because § 501 incorporates Rule 3002, and because § 502 presupposes compliance with § 501, compliance with Rule 3002 (i.e., timeliness) is a prerequisite to § 502 allowance.”).

Finally, the Debtor cites Tesch as supporting his position. Second Mem. in Supp. (Doc. 60) at 3-4 (citing In re Tesch, 628 B.R. at 69). However, that case dealt with a creditor who filed an initial proof of claim by the bar date set by Bankruptcy Rule 3002(c), but did not file an amended deficiency claim by the deadline in the confirmed chapter 13 plan. In re Tesch, 628 B.R. at 62. Moreover, the language of the chapter 13 plan in that case expressly mentioned that the deficiency claim would need to be filed “ ‘even though a previous secured or unsecured claim was asserted prior to the surrender, ․ or disposition of the property ․’ ” which was based upon, although slightly deviated from, “the model plan approved for use in the Western District of Michigan” at that time. Id. at 63 & n.3 (quoting Plan at ¶ IV.G.2 and the model plan). This is why, in Tesch, “the confirmed plan in no way interfere[d] with the deadline set forth in Bankruptcy Rule 3002(c), which remain[ed] in effect.” Id. at 68 (noting the “deadline in the plan if born out of practicality” to provide the creditor with time to “dispose of its collateral and account for the proceeds thereof” and that the creditor could have sought to extend the deadline set in the confirmed plan under Bankruptcy Rule 9006(b)(1)). Instead, in Tesch the formerly secured creditor argued that “its amended claim relates back to its initial claim” based on Federal Rule of Civil Procedure (“Civil Rule”) 15, made applicable by Bankruptcy Rule 7015. Id. at 65-66. But the Bankruptcy Court found that Civil Rule 15 did not apply, in part, because Bankruptcy Rule 9014(c) did not incorporate it. Id. at 66. And in regard to the creditor's appeal to equity, the Court found that “FCU offers no persuasive reason to depart from, if not entirely disregard, this court's confirmation order.” Id. at 67 (citing 11 U.S.C. § 1327(a); Espinosa, 559 U.S. at 275, 130 S.Ct. 1367 (“absent objection, confirmation order is enforceable and binding so long as notice is proper”)).

In this situation, the Amended Plan was confirmed with the NSP language prepared by the Debtor, which could, to the extent it is interpreted as squarely conflicting with the claims allowance process, govern whether IH has an allowed deficiency claim in this case notwithstanding the bar date under Bankruptcy Rule 3002(c). Thus, the Court has to examine the language of the NSP in the confirmed Amended Plan (and be careful when it confirms chapter 13 plans, as Espinosa cautions). And likewise, chapter 13 debtors and their counsel need to be careful when selecting language for their nonstandard provisions.

G. LBR 3001-1(d)(2)

In this District, there is no LBR 3002, but there is an LBR 3001-1, which currently provides, in relevant parts, as follows:

(d) Chapter 12 and 13 Cases. Any unsecured creditor and any creditor asserting secured status as to property of the debtor or the estate, shall, in order to receive payments under a confirmed plan, file a proof of claim.

LBR 3001-1(d). Further, under the umbrella of LBR 3001-1(d), the applicable subsection referenced by the NSP in this case provides as follows:

(2) Effect of Relief from Stay. An entity holding an allowed secured claim that obtains relief from the automatic stay shall receive no payments provided for in a confirmed plan on account of such secured claim after entry of the order lifting the stay. The entity may file an amended proof of claim for any deficiency claim after the collateral has been sold or otherwise disposed of.

LBR 3001-1(d)(2) (emphasis added). Bankruptcy Rule 3002(c) is not referenced in LBR 3001-1, but it is implied that a creditor has complied with its requirements such that its claim would already be “allowed.”

Through examination of the archive of the Local Bankruptcy Rules on the Court's website, this language dates back to at least August 1, 1991, when the Bankruptcy Court in Dayton had its own local rules governing chapter 13 cases, particularly D-3.18.9, titled “Proofs of Claim.” Subsection (f) of that former local rule stated (with emphasis added) that:

An entity holding an allowed secured [proof of] claim that obtains relief from stay shall not continue to receive the payments provided for in a confirmed plan and may file an amended proof of claim for any deficiency claim.

Effective March 10, 1997, this language became district-wide LBR 3001-1(b)(3), providing as follows (with emphasis added):

(3) Effect of Relief from Stay. An entity holding an allowed secured claim that obtains relief from the automatic stay shall not continue to receive the payments provided for in a confirmed plan on account of such secured claim, and such entity may file an amended proof of claim for any deficiency claim after the collateral has been sold or otherwise disposed of.

This built upon D-3.18.9 and is almost the same language now in LBR 3001-1(d)(2), as highlighted above, such that the language has been largely unchanged for over thirty years.

H. The NSP Language Revisited

The NSP language in this case permits IH, and IH only, to file “a deficiency claim.” Am. Plan at 9, ¶ 13 (NSP). It does not reference “an amended proof of claim.” Trying to reconcile the NSP language with LBR 3001-1(d)(2), the first sentence of LBR 3001-1(d)(2) does not apply to this case because IH did not hold an allowed secured claim and was not receiving payments from the Trustee because Debtor always proposed to surrender, and given that IH obtained relief from the automatic stay before the Amended Plan was confirmed.¹⁴ But the first sentence of LBR 3001-1(d)(2) would not entitle IH to any payment anyhow. As to the second sentence of LBR 3001-1(d)(2), it is also premised on the creditor holding an allowed secured claim, in which case the creditor would need to “file an amended proof of claim for any deficiency claim after the collateral has been sold or otherwise disposed of.”¹⁵ But again, neither the NSP language nor LBR 3001-1(d)(2) mentions Bankruptcy Rule 3002(c) nor expressly states, though it certainly implies, that the ability to file a deficiency claim is conditioned upon filing a previous claim by the Bankruptcy Rule 3002(c) deadline. And while LBR 3001-1(d) states that a creditor must file a proof of claim, it does not say by when. Obviously, as acknowledged in Shiver, the best course of action is to file a proof of claim by the deadline in Bankruptcy Rule 3002(c), particularly if the chapter 13 plan has not yet been confirmed, and to later amend it to assert a deficiency claim. However, when the Debtor proceeds to confirm a chapter 13 plan after the Bankruptcy Rule 3002(c) deadline has run, with NSP language that permits a specific creditor to have a deficiency claim simply by filing a proof of claim by the deadline set in the chapter 13 plan, and the NSP contains no mention of any need to file a proof of claim by the Bankruptcy Rule 3002(c) deadline, one could interpret the NSP to mean that no prior claim need have been filed.

This case is similar to Shiver given that the NSP language contained in the First Amended Chapter 13 Plan, drafted by the Debtor, states as follows:

Debtor(s) propose to surrender his interest in 2021 Keystone Camper to the Creditor IH Credit Union. Upon confirmation of the amended plan, the stay affecting this property shall be deemed modified to allow in rem disposition of the collateral to effect the surrender. Pursuant to L.B.R. 3001-1(d)(2), the Trustee will NOT pay on this claim to the listed Creditor until the Creditor files a deficiency claim. The deficiency claim shall be filed no later than 90 days from the date that the plan is confirmed. If the deficiency claim is filed more than 90 days after the plan is confirmed, then it shall be disallowed except upon further Order of the Court by the Creditor filing timely a Motion to Extend Time or Motion to File Deficiency Claim Out of Time․

First Am. Chp. 13 Plan at 9, ¶ 13 (NSP). The main difference is the inclusion of the italicized introductory clause, “[p]ursuant to L.B.R. 3001-1(d)(2)[.]” The rest of the language, however, does not anywhere say that IH had to previously file a claim by the Bankruptcy Rule 3002(c) deadline or assert its “deficiency claim” as an amendment to an allowed secured claim in order to receive payment under the Amended Plan; rather, it says the Trustee will not pay on IH's claim “until the Creditor files a deficiency claim.” And the deficiency claim “shall be filed[,]” not amended, “no later than 90 days from the date that the plan is confirmed.” Further, only “[i]f the deficiency claim is filed more than 90 days after the plan is confirmed” would the deficiency claim be disallowed. The NSP does not say that the deficiency claim would be disallowed if IH had failed to previously file a secured claim by the deadline set by Bankruptcy Rule 3002(c). Thus, although there is a reference to LBR 3001-1(d)(2) in the NSP, nowhere in any of the language of the NSP was IH instructed to file an amended proof of claim for a deficiency, as discussed in LBR 3001-1(d)(2). These omissions caused the linguistic confusion. Should IH be charged with understanding (or having to guess whether) in this situation that the NSP, which caused this issue (and was drafted by the Debtor), did not alter the status quo?¹⁶

In fact, because IH did not file a claim by the deadline in Bankruptcy Rule 3002(c), it did not have an allowed claim to amend. But in this situation, even if IH had filed a claim, it might have filed an unsecured claim based on its anticipated recovery and disposition of its collateral. Yet, after IH obtained relief from the automatic stay to liquidate its collateral (without opposition from the Debtor), which would have been subsequently granted pursuant to the NSP language and Bankruptcy Rule 3015(g)(2) when the Amended Plan was confirmed, the Debtor still proceeded to confirm his Amended Plan with the NSP language still directing IH to file a deficiency claim and providing IH with time to do so. The events relevant to the Trustee's Claim Objection existed as of February 20, 2025, when IH had not filed a proof of claim by the Bankruptcy Rule 3002(c) deadline of February 19, 2025. And the Confirmation Order was entered on April 4, 2025. Therefore, if either the Chapter 13 Trustee or Debtor believed that IH was no longer able to file a deficiency claim under the NSP, pursuant to LBR 3001-1(d)(2), because it failed to file a claim by the Bankruptcy Rule 3002(c) deadline, they could have and perhaps should have raised this issue before proceeding to confirm the Amended Plan.

Interestingly, on February 19, 2025 (the same day as the Bankruptcy Rule 3002(c) deadline), the Chapter 13 Trustee filed an Objection to Confirmation of Amended Plan (Doc. 24) (Doc. 27), although this was the day before the Trustee or Debtor could have known IH did not file an initial proof of claim. The Debtor and Chapter 13 Trustee then entered into an Agreed Order Resolving Chapter 13 Trustee's Objection to Confirmation, Amending Plan (Doc. 24) at Bar and Ordering Trustee to Submit a Confirmation Order (Doc. 31), which increased the plan payments to $2,453 per month. And in the meantime, the unopposed Motion for Stay Relief by IH was granted, on February 25, 2025, six days after the bar date under Bankruptcy Rule 3002(c), through the Order Removing Stays as to IH Credit Union, Inc. Re: 2021 Keystone Bullet VIN: 4YDT29129MD430049 (Docket No. 23) (Doc. 29). The Debtor then proceeded to confirm the Amended Plan on April 4, 2025, and on June 13, 2025, over two months later, the Chapter 13 Trustee filed his objection to IH's Claim.

The fundamental concern in this particular case is that the language of the NSP essentially set a trap for the unwary, especially considering the history of Debtor's prior chapter 13 case in which he was unable to keep up the payments, such that it was fairly clear he would have to surrender the 2021 Keystone Bullet Camper in this second case filed less than a month after his prior case was dismissed. In essence, to deny IH the ability to have a deficiency claim, under the language of the NSP, which only applied to IH and which the Debtor did not modify after IH did not file a proof of claim by the Bankruptcy Rule 3002(c) deadline, initially struck the Court as a “gotcha” type objection that does not do justice to the parties, and is rooted in a view that “that's the way we've always done it,” without acknowledging that the language of the NSP here was lacking and caused the problem.

Borrowing from another opinion by the B.A.P. for the First Circuit, this “quagmire” could have been avoided had IH simply filed a proof of claim by the claims bar date. See Belser v. Nationstar Mortg., LLC (In re Belser), 534 B.R. 228, 245 (B.A.P. 1st Cir. 2015) (“we pause to point out that when a secured creditor fails to timely file a proof of claim, it runs the risk of creating the exact procedural quagmire described above. Nationstar could have avoided this quagmire simply by filing a proof of claim before the claims bar date.”) But IH did not, and IH did not oppose the Chapter 13 Trustee's Objection to Claim 20-1. Accordingly, although the Court agrees that the language is ambiguous short-hand, this language had an established meaning rooted in the long-standing LBR 3001-1(d)(2) and local practice in Dayton, such that the NSP did not evidence a clear intention by the Debtor to alter the normal operation of Bankruptcy Rule 3002(c) and LBR 3001-1(d)(2). In other words, the NSP did not evidence an intention of the Debtor to allow a deficiency claim for IH regardless of whether it timely filed a proof of claim by the Bankruptcy Rule 3002(c) deadline, although including that requirement in the NSP language or clarifying that the NSP did not supplant the requirement to timely file a claim by the Bankruptcy Rule 3002(c) bar date would have resulted in disallowance of the unopposed Claim Objection in the normal course without much further time or effort.

At the status conference, it was acknowledged that the NSP language was problematic and was suggested that it should not be used going forward. The main problem was that it does not reference the need for IH to first file a secured claim by the Bankruptcy Rule 3002(c) deadline and later file an amended deficiency claim by the deadline set forth in the NSP in the Amended Plan. Notwithstanding, there are still reasons why IH should have filed a proof of claim by the general bar date, notwithstanding the language of the NSP, namely: (1) there is no exception stated within Bankruptcy Rule 3002(c)(1)-(7) that would apply to IH in this circumstance;¹⁷ (2) following service of the Initial Plan, the Notice of Bankruptcy (Doc. 10) was issued on December 13, 2024, notifying all creditors, including IH, that the “[d]eadline for all creditors to file a proof of claim (except governmental units)” was “2/19/25[;]” and (3) LBR 3001-1(d)(2) addresses post-stay relief deficiency claims and indicates that they need to be amended claims that are based on allowed secured claims, implying (although not expressly stating) that they need to already have been filed by Bankruptcy Rule 3002(c) deadline. Notice of Bankr. at 2 (emphasis in original). To the contrary, however, the NSP was in the Initial Plan that was filed and served on December 12, 2024, before the Notice of Bankruptcy was issued, it was specific to IH, and it provided that IH would only need to “file[ ] a deficiency claim” that “shall be filed no later than 90 days from the date the plan is confirmed.” Initial Plan at 9, ¶ 13. Moreover, read in context, the NSP language did not say that IH would have to file a deficiency claim in accordance with the provisions of LBR 3001-1(d)(2); rather, it said that “[p]ursuant to LBR 3001-1(d)(2), the Trustee will NOT pay on this claim to the listed Creditor until the Creditor files a deficiency claim.” Id. This mainly refers to the first sentence of LBR 3001-1(d)(2), which provides that “[a]n entity holding an allowed secured claim that obtains relief from the automatic stay shall receive no payments provided for in a confirmed plan on account of such secured claim after entry of the order lifting the stay.” The last part, “until the Creditor files a deficiency claim” is related to the second sentence of LBR 3001-1(d)(2), however, the NSP language is different than and conflicts with that second sentence.

In addition to the conflicting language of the NSP, here the Amended Plan was confirmed several months after the Bankruptcy Rule 3002(c) deadline. It is telling that the Chapter 13 Trustee and Debtor focused their attention on the clause of the NSP mentioning LBR 3001-1(d)(2), as a way to interpret the NSP language consistent with Bankruptcy Rule 3002(c). But they largely ignored the remaining sentences in the NSP. In contrast, IH focused on the remaining sentences that simply say IH could file a deficiency claim within the allotted time and ignored the reference to LBR 3001-1(d)(2). This suggests that both sides believe the ignored language is not helpful to their cause, and that the language is conflicting and ambiguous.

Were it not for the reference to LBR 3001-1(d)(2), interpreting the NSP language would have been easier. However, as drafted, the majority of the NSP language seemingly contradicts LBR 3001-1(d)(2), unless one interprets the phrase “file a deficiency claim” to mean file a proof of claim that amends a previous secured claim timely filed within the bar date established under Bankruptcy Rule 3002(c). Otherwise, the NSP does not advise IH of any of the things that both the Debtor and Chapter 13 Trustee now argue IH had to do in order to have a deficiency claim in this chapter 13 case. And the NSP language in this case is lacking in comparison to NSP language used in other chapter 13 cases before this Court.

Creditor IH's position is that Bankruptcy Rule 3002(c) does not apply to the deficiency claim. Additionally, IH argues that it complied with the NSP in the confirmed Amended Plan, which was adopted as an order of the court upon confirmation. This interpretation would indicate that a timely secured claim would not be necessary in order for a creditor to have an allowed deficiency claim as long as that deficiency claim is filed within any time limits specified in the plan. In the particular situation of this case, in which the NSP language was contained in the Initial Plan mailed before the Notice of Bankruptcy, the risk is that a party would justifiably rely on the NSP instead of the Notice of Bankruptcy, with respect to when it would be required to file a deficiency claim. Or, at a minimum, IH may have reasonably viewed the NSP to be specific to its circumstance and govern over the general bar date. Again, were that not what the Debtor meant—if the Debtor meant that IH would need to file a proof of claim by the general bar date under Bankruptcy Rule 3002(c) and would only have 90 days to “amend” a previously filed claim—he could have written his NSP to say so. In fact, this is what LBR 3001-1(d)(2) suggests, at least for creditors that have filed secured claims prior to obtaining relief from the automatic stay.

I. Informal Proof of Claim and Party Presentation Principle

Interestingly, in the Shiver case, the chapter 13 trustee was in agreement with the creditor that because the confirmed chapter 13 plan was res judicata the creditor's claim was timely. 484 B.R. at 470. But the chapter 13 trustee also argued that the “Debtor's schedules and plan rose to the level of an informal claim.” Id. at 474 (citing In re Edelman, 237 B.R. 146, 155 (B.A.P. 9th Cir. 1999)). Here, it is unclear whether IH's Motion for Stay Relief would provide additional ammunition for this argument; however, none of the parties raised this issue. In fact, IH did not originally oppose the Chapter 13 Trustee's Claim Objection, weighing in only after this Court raised the issue regarding the NSP language sua sponte.¹⁸ And although the Court clearly raised and provided two opportunities for the parties to address the issue of whether the NSP in the Amended Plan or Bankruptcy Rule 3002(c) governs the filing of IH's deficiency claim, the Court did not raise the issue of an informal proof of claim, and the parties did not address it in their two sets of filings. Accordingly, in keeping with an opinion issued by the Supreme Court of the United States on May 26, 2026, regarding the “principle of party presentation,” this Court will not wade into an analysis of whether the informal proof of claim doctrine could apply in this circumstance. See Margolin v. Nat'l Ass'n of Immigration Judges, ––– U.S. ––––, 146 S. Ct. 1285, 1288, 224 L.Ed.2d 817 (2026) (stating that “[f]ederal courts adhere to the principle of party presentation” which is a “rule that points not argued will not be considered” (citing Clark v. Sweeney, 607 U.S. 7, 9-10, 146 S.Ct. 410, 223 L.Ed.2d 157 (2025) (per curiam); quoting United States v. Burke, 504 U.S. 229, 246, 112 S.Ct. 1867, 119 L.Ed.2d 34 (1992) (Scalia, J., concurring in judgment))).¹⁹

Once it is accepted that a confirmed chapter 13 plan is binding under § 1327(a) and can alter a Bankruptcy Rule consistent with Espinosa, the issue framed by the parties is a matter of interpreting the NSP language in the confirmed Amended Plan; essentially, interpreting a contract.

J. Construing Ambiguities

The Shiver opinion, as well as the Mershon opinion by Judge Hopkins, both recite the “well-known rule of construction that a plan of reorganization ‘should be construed against the drafter.’ ” Meredith v. BMW Fin. Servs. NA, LLC (In re Burnsed), No. 19-41654-EJC, 2021 Bankr. LEXIS 1897, at *31, 2021 WL 3013300, at *11 (Bankr. S.D. Gar. July 15, 2021) (quoting Hill v. Greentree Serv., LLC (In re Hill), 572 B.R. 793, 800 (Bankr. N.D. Ga. 2017) (Hagenau, J.)). In other words, ambiguities in a chapter 13 plan typically should be construed against a debtor. Even so, in this particular instance in which the Court's ruling will not necessarily just impact the parties to this chapter 13 case, but could have implications upon the broader chapter 13 practice in Dayton, the Court is mindful that it should not, if possible, interpret the language of a confirmed chapter 13 plan in a way that would violate, rather than comply with, the Bankruptcy Code and Rules, and LBR 3001-1(d)(2). Burnsed, 2021 Bankr. LEXIS 1897 at *32-33, 2021 WL 3013300, at *11-12 (quoting In re Hamilton, No. 14-10665, 2017 WL 1533382, 2017 Bankr. LEXIS 1169 (Bankr. D.N.M. Apr. 27, 2017)).

Ultimately, because the Court raised this issue sua sponte after IH had already failed to respond to the Chapter 13 Trustee's Objection,” because the ambiguous language in the NSP should, if at all possible, be construed to not violate Bankruptcy Rule 3002(c); because of the long-established practice in this District, and particularly in Dayton, with respect to the filing of deficiency claims; and because IH, represented by the same counsel, knew how to and did timely file a proof of claim under Bankruptcy Rule 3002(c) in the Debtor's prior chapter 13 case in which Debtor had used the same NSP language (albeit for a different creditor's collateral), the Court will sustain the Chapter 13 Trustee's Objection to Claim 20-1 filed by IH in the amount of $14,781.18. IH did not file a claim by the bar date under Bankruptcy Rule 3002(c), such that it had no timely filed claim to amend, which is understood, in short-hand, to be the “filing of a deficiency claim.” Moreover, if IH had any issues or concerns with the NSP language, they could have sought clarification as to whether the NSP was intended to alter the status quo.

Although Debtor or his counsel could have modified the NSP language after IH failed to timely file a claim by the Bankruptcy Rule 3002(c) bar date, he (actually, his counsel) did not do so. Presumably, this was because they had used this same NSP language before and thought it would accomplish their goal. In other words, despite the deficiencies in the NSP language, there is no indication that in this case the Debtor intended to modify the established practice for asserting a deficiency claim or contradict to Bankruptcy Rule 3002(c). Just as the NSP did not require IH to file a proof of claim by the bar date under Bankruptcy Rule 3002(c), neither did the NSP language absolve or exempt IH from taking this step. It did not express a clear intent to dispense with the Bankruptcy Rule 3002(c) bar date for IH. Moreover, altering the normal claims process—the bar date—would not have benefitted the Debtor in this situation. And the Debtor has since joined in support of the Chapter 13 Trustee's Objection. Accordingly, it appears the current situation is more likely a result of IH either simply missing the Bankruptcy Rule 3002(c) deadline or having made a conscious determination, prior to this Court interjecting, that it was not worth the cost to IH, after having been paid over $12,000 on its secured claim in Debtor's first chapter 13 case and having the chance to liquidate its collateral during this second chapter 13 case, to file a proof of claim in addition to filing a Motion for Stay Relief to liquidate its surrendered collateral.

V. Conclusion

Given the long-established practice in Dayton and this District, the Court is reticent to interpret the language of the NSP in this case in a way that would dispense with the requirements of Bankruptcy Rule 3002(c) and LBR 3001-1(d)(2) and contradict the current deficiency claims allowance process. This is particularly so given that the Court raised this issue sua sponte after the Chapter 13 Trustee's objection went unopposed. The NSP language, although confusing and ambiguous, did not evidence an intent by the Debtor to alter or override the application of either Bankruptcy Rule 3002(c) or LBR 3001-1(d)(2) regarding IH's assertion of a deficiency claim in this case. Even though the binding res judicata effect of a confirmed chapter 13 plan, under § 1327(a), Espinosa, and interpreting case law can contradict the Bankruptcy Code and Bankruptcy Rules, in this particular instance the Court has interpreted the NSP in the confirmed Amended Plan in a way that harmonizes the language with Bankruptcy Rule 3002(c), LBR 3001-1(d)(2), and long-established practice. This opinion, however, is a cautionary tale for those who draft chapter 13 plans, and a warning that, for everyone's benefit, better NSP language could be helpful to avoid such issues in the future.

Accordingly, the Court hereby sustains the Trustee's Objection on the basis asserted, and Claim No. 20-1 filed by IH on May 20, 2025, is hereby disallowed in full.

IT IS SO ORDERED.

FOOTNOTES

1.   Capitalized terms used but not defined in this Introduction have the meanings given later on in this Memorandum Opinion and Order.

2.   The Court takes judicial notice of the matters on its docket in Mr. Combs's prior chapter 13 case, pursuant to Federal Rule of Evidence 201(b)(2), as well as his current chapter 13 case.

3.   Pursuant to Bankruptcy Rule 3002(c), the deadline to file proofs of claim in Mr. Combs's prior chapter 13 case was June 24, 2022. See Notice of Chapter 13 Bankruptcy Case at 2, § 8, In re Combs, 22-30482 (Bankr. S.D. Ohio Apr. 19, 2022).

4.   Under the “hanging paragraph” of 11 U.S.C. § 1325(a), a claim secured by a motor vehicle that constitutes a purchase money security interest cannot be bifurcated into a secured and unsecured claim if it was purchased within 910 days of the petition date and for the “personal use of the debtor[.]” The Keystone Bullet Camper is a trailer that falls within the definition of a “motor vehicle” under both 49 U.S.C. § 30102 and Ohio Revised Code § 4505.01.

5.   Further, the bar date of February 19, 2025, was twenty-three (23) days after IH filed its Motion for Stay Relief, such that the 21-day notice period, with an extra three (3) days for U.S. mail service to the Debtor, did not run until February 20, 2025, the day after the bar date, such that IH took a gamble, however academic or remote, that Debtor might change his mind, oppose the Motion for Stay Relief, and further amend his plan to remove the surrender provisions.

6.   The full NSP utilized in the Hensley case is as follows:Debtors elect to surrender to First Service Credit U the following property: 2019 Forest River Vengeance. Upon confirmation of the Plan, the stay affecting this property shall be deemed modified to allow in rem disposition of the Debtors’ interest in the 2019 Forest River Vengeance to effect the surrender. The Creditor must timely file a proof of claim pursuant to B.R. 3002(c). Pursuant to L.B.R. 3001-1(d)(2), the Trustee will NOT pay on this claim to the Creditor until the Creditor files a deficiency claim. The deficiency claim for said property shall be filed no later than 90 days from the date that the Plan is confirmed. If the deficiency claim is filed more than 90 days after the Plan is confirmed, then it shall be disallowed except upon further order of the Court by the Creditor filing a timely Motion to Extend Time or Motion to File Deficiency Claim Out of Time. The personal liability of Debtors shall be discharged upon completion of the Plan and the entry of Discharge.First Am. Chp. 13 Plan (Doc. 18), In re Hensley, Case No. 25-31563 (Bankr. S.D. Ohio Oct. 9, 2025) (emphasis added). Although this language could still be improved by stating that the Creditor must file an amended claim to assert any deficiency, it does at least provide that the Creditor “must timely file a proof of claim pursuant to B.R. 3002(c). Notably though, the Hensley plan was filed after the Court raised the potential issue with the standard deficiency language in this case.

7.   Unlike the open-ended time for a counterparty to file a proof of claim for executory contract or lease rejection damages in Bankruptcy Rule 3002(c)(4), there is no corresponding provision for deficiency claims.

8.   Although not cited by the parties, the Court finds the uncontested events in the prior (first) chapter 13 case to be informative to analyze what happened in this case and has taken judicial notice of those events and its docket pursuant to Federal Rule of Evidence 201(c)(1) as noted elsewhere in this Order.

9.   This issue did not come out of left field. The Court flags this language in chapter 13 plans given the confusion and potential problems it can cause. There are other plans with better language that clearly note a creditor is required to timely file a claim pursuant to Bankruptcy Rule 3002(c) in order to later have a deficiency claim through amendment of a secured proof of claim. See In re Hensley, No. 23-31026, Doc. 17, ¶ 13 (“The Creditor must timely file a proof of claim pursuant to B.R. 3002(c).”). In other words, the Debtor's omission of any reference to Bankruptcy Rule 3002(c) or the need to amend a previously allowed claim from the NSP language in his confirmed Amended Plan that drew the Court's attention.

10.   LBR 3001-1(d)(2) does not expressly deal with a situation in which the chapter 13 plan proposes to surrender collateral.

11.   See, e.g., N.D. Fla. LBR 3002-1(A) (“Upon confirmation of a Chapter 13 Plan that provides for surrender of collateral: (1) The creditor shall have sixty (60) days from confirmation of the Chapter 13 Plan to amend a timely filed proof of claim regarding any unsecured deficiency balance that may occur upon the sale of the subject collateral if the collateral consists of personal property that was not liquidated within the claims bar date period.”); D. Md. Bankr. R. 3002-1(b) (“Unless otherwise ordered by the Court or provided in a confirmed plan, an amended proof of claim asserting an unsecured deficiency claim for ․ personal property must be filed within sixty (60) days ․”); Neb. R. Bankr. P. 3002-1(C) (“Unless otherwise provided in a confirmed plan, a creditor may file, without leave of court, an amended proof of claim asserting an unsecured deficiency claim.”).

12.   Proof of Claim, Form B410, https://www.uscourts.gov/sites/default/files/2025-04/b_410_0425-form.pdf.

13.   Hereinafter, unless otherwise specified, all references to statutory sections are to sections of the Bankruptcy Code.

14.   There is also LBR 4001-1(a)(10), which provides that “[i]n chapter 12 and 13 cases the effect of relief from stay upon an entity holding an allowed secured claim is governed by LBR 3001-1(d)(2). However, a literal reading of this LBR would mean that it also does not apply to a creditor, like IH, that did not hold an allowed secured claim.

15.   The third sentence of LBR 3001-1(d)(2) has no application in this case because the Debtor did not retain the 2021 Keystone Bullet Travel Trailer (Camper).

16.   Notably, just as Debtor could have used more complete language, IH could have sought clarification of that language or filed an objection to confirmation of the Amended Plan.

17.   Unlike the situation for counterparties to executory contracts or unexpired leases that may hold rejection damages claims and can assert them later under Bankruptcy Rule 3002(c)(4), there is no subparagraph of Bankruptcy Rule 3002(c) that deals with deficiency claims.

18.   In the Order Scheduling Status Conference (Doc. 47), the Court stated that “it appears to the Court that the general proof of claim bar date established pursuant to Federal Rule of Bankruptcy Procedure 3002(c) (Doc. 10) may not be applicable to this Creditor's deficiency claim, instead the date for filing a deficiency claim established by the confirmed Amended Plan appears to be the relevant deadline.” Order Scheduling Status Conf. at 2.

19.   This said, at least under the Bankruptcy Code, bankruptcy courts have independent duties to raise certain issues even when the parties do not, as stated in Espinosa, 559 U.S. at 275, 130 S.Ct. 1367.

Tyson A. Crist, United States Bankruptcy Judge