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In re: Linda Stamps

19 B 21730
In accordance with section 3.1 of Debtor’s confirmed plan, the chapter 13 Trustee sought recovery of funds distributed to the City of Chicago after relief from stay as to the City’s collateral was granted to another creditor.  The City brought a motion to enforce the plan and for declaratory relief, seeking a finding that the Trustee wrongly interpreted the following language in section 3.1: “If relief from the automatic stay is ordered as to any item of collateral listed in this paragraph, then, unless otherwise ordered by the court, all payments under this paragraph as to that collateral will cease, and all secured claims based on that collateral will no longer be treated by the plan.”  HELD: The court has both inherent authority and a statutory basis to interpret and enforce a confirmed plan.  This language in section 3.1 is unambiguous.  The plain meaning of the language is that when relief from stay is granted, all secured claims based on that collateral – even those not listed in section 3.1 – are no longer treated by the plan.  This provision does not render the national form plan unconfirmable, and the history of the form plan’s drafting does not dictate a different result.  If parties prefer a different result, they may include a nonstandard provision in section 8.1, or request that the court “order otherwise” at the time stay relief is granted.  In this case, the Trustee was correct to stop making payments and to demand that the City return funds paid after the court granted relief from the stay.

Date: 
Friday, September 30, 2022