DaimlerChrysler Financial Services Americas LLC v. Barrett

Summary

The Eleventh Circuit held that surrender of a 910 vehicle in a Chapter 13 bankruptcy does not automatically satisfy the debtor's entire obligation. After surrender, a creditor may pursue an unsecured deficiency claim when the parties' contract and applicable state law provide for recourse. The court vacated the bankruptcy court's orders and remanded for further proceedings.

Holdings

1. Surrender of a 910 vehicle does not necessarily satisfy the creditor's entire claim or bar an unsecured deficiency claim. A creditor may pursue an unsecured deficiency claim after surrender when the parties' contract and applicable state law provide for recourse.
2. Any deficiency remaining after disposition of the surrendered vehicle is treated as an unsecured claim, not as a fully secured claim entitled to payment in full.

Questions Presented

1. Whether a Chapter 13 debtor's surrender of a 910 vehicle under 11 U.S.C. § 1325(a)(5)(C) fully satisfies the creditor's claim and bars the creditor from asserting an unsecured deficiency claim.
2. Whether the creditor's right to pursue a deficiency after surrender is governed by the parties' contract and applicable state law when the hanging paragraph makes 11 U.S.C. § 506 inapplicable.

Disposition

vacated