In re Drew
United States Bankruptcy Court for the Northern District of Illinois
325 B.R. 765 (2005)
The Drews (plaintiffs) had their chapter 13 plan confirmed, then about two years later obtained court permission to refinance their property, which had been valued at $90,000 but was refinanced at $105,000, yielding a lump-sum cash payment. The trustee moved to modify the plan to increase unsecured-creditor payments based on this appreciation and cash payout; the Drews argued the trustee was estopped from challenging the earlier valuation and that they should keep any surplus equity.
Whether a debtor's confirmed chapter 13 bankruptcy plan may be modified to increase payments to unsecured creditors when the debtor's post-confirmation refinancing produces improved financial circumstances, such as a lump-sum cash payment and property appreciation.