Local Rule 3012-1: VALUATION OF COLLATERAL, ALLOWANCE OF SECURED CLAIMS, AND ESTABLISHMENT OF INTEREST RATE IN CHAPTER 12 AND 13 CASES

RULE 3012-1. VALUATION OF COLLATERAL, ALLOWANCE OF SECURED CLAIMS, AND ESTABLISHMENT OF INTEREST RATE IN CHAPTER 12 AND 13 CASES.

(a) Creditor's Proof of Claim. A creditor's proof of claim shall control for purposes of establishing both the amount of a creditor's allowed secured claim and the interest rate to be paid on that allowed secured claim, unless (1) the debtor's plan provides otherwise and is confirmed, or (2) the debtor files a motion, to allow the secured claim in a different amount or with a different interest rate, and the Court grants that motion. This subsection does not apply to claims of governmental units.

(b) Debtor's Motion to Establish Amount of Secured Claim and Interest Rate. The debtor, under § 506(a), may seek to have a creditor's secured claim allowed in an amount that corresponds to the debtor's assessment of the value of the collateral or with an interest rate different from the contractual interest rate, as set forth below.

(1) Through the Chapter 13 Plan (Except for Claims of Governmental Units). In a chapter 13 case, the debtor must propose the allowed amount of a secured claim and the interest rate to be paid on that claim, in Part 3.2 of Official Form 113. The debtor must identify the collateral, set forth the debtor's estimate of the collateral's value, explain the basis for the debtor's valuation, state the proposed amount of the allowed secured claim, state the proposed interest rate, and explain the basis for the proposed interest rate if it is different from what the creditor asserts. The debtor must describe and attach proof of the creditor's interest in the collateral. The debtor must also file the plan separately as an embedded motion.

(2) Through a Modified Chapter 13 Plan (Except for Claims of Governmental Units). If the debtor fails to seek valuation of the collateral and allowance of a secured creditor's claim in Part 3.2 of Official Form 113 prior to confirmation of the plan, the debtor must file a motion to modify the plan, to assert this relief under § 506(a).

(3) In a Chapter 12 Case (Except for Claims of Governmental Units.) The debtor may establish the amount of an allowed secured claim in a chapter 12 case either through the plan or by motion. If in the plan, the debtor must include a conspicuously identified provision (i) setting forth the debtor's valuation of the collateral securing the claim, and (ii) proposing the allowed amount of, and interest to be paid on the secured claim, under §506(a). Whether the debtor seeks this relief through the chapter 12 plan or a motion, the debtor must set forth all information required in a chapter 13 case, as specified above, and must serve the plan or motion on the creditor in the manner required by the Bankruptcy Rules.

(c) Rebuttable Presumption of Valuation of Motor Vehicles. The value of motor vehicle collateral will be presumed to be the midpoint between the National Automobile Dealers Association average trade-in value and clean retail value unless (1) the parties agree to a different value, (2) the debtor or secured creditor presents an appraisal which the other party does not dispute, or (3) a different value is fixed by the Court after an evidentiary hearing held specifically to determine the value of that vehicle.

(d) Other Collateral Valuation. The debtor must specify the basis of each proposed valuation of collateral set out in Part 3.2 of Official Form 113 and attach documents that support the proposed valuation.