17bk18780
On a chapter 13 debtor’s claim objection seeking a determination from the court of the nature, validity and amount of a tax purchaser’s claim in a chapter 13 case where the deadline to redeem the property taxes in question expired prepetition but no tax deed has been issued or recorded and also upon the tax purchaser’s objection to the confirmation of the debtor’s chapter 13 plan, held:
 
The tax purchaser has a perfected in rem claim for the statutory redemption amount that exists irrespective of whether the redemption period has passed.  That claim is allowed as a secured claim in the amount asserted by the tax purchaser.  The tax purchaser also has a contingent, unperfected in rem claim for the fair market value of the property in question that exists irrespective of whether the redemption period has passed.  The court estimates for the purpose of allowance that this unperfected in rem claim is in the amount asserted by the tax purchaser, the property’s full fair market value as of the petition date, less that amount of perfected in rem claim for the redemption amount.  Such unperfected in rem interest is, however, unsecured, by operation of 11 U.S.C. § 506(a) and because it is subject to the trustee’s avoidance power as a hypothetical lien creditor.  The resulting allowed unsecured claim must be treated in the debtor’s plan.  The debtor’s objection is, therefore, SUSTAINED IN PART AND OVERRULED IN PART.
 
The confirmation objection fails in its attempt to have this court change its prior published legal conclusions regarding the treatment of tax purchaser claims after the passing of the redemption period but before the issuance of a tax deed.  However, as the tax purchaser’s claim as determined and allowed by the court is not fully addressed in the debtor’s plan, the confirmation objection is SUSTAINED in that limited respect only.