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By John Ashcroft Institute for Constitutional Studies

Eighth Circuit Court of Appeals in case of first impression holds that automobile purchase money lender has secured claim for the "negative equity" trade-in financed amount was part of the creditors secured claim and the debtors may not bifurcate the car loan. Ford Motor Credit Company v. Dennis L. Mierkowski U.S. Court of Appeals Case No: 08-3866 083866P.pdf 09/08/2009 U.S. Bankruptcy Court for the Eastern District of Missouri [PUBLISHED] [Benton, Author, with Hansen and Bye, Circuit Judges] "The Bankruptcy Court in this Chapter 13 case erred in ruling that the debt attributable to the cash-sale price of debtors' new vehicle was secured, while the debt attributable to the negative equity in their trade-in was unsecured; under Missouri law, Ford Motor Credit has a purchase-money security interest in the negative-equity financing, and the entire debt was secured. Judge Bye, dissenting.

Full post as published by Showmeblawgs on September 08, 2009 (boomark / email).