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Rule 2084-6

Adequate Protection Payments

(a) Plan Proposal.  The plan form must include monthly adequate protection payments to creditors secured by depreciating personal property, beginning with month one. Unless ordered otherwise, the debtor shall not make adequate protection payments directly to any creditor or reduce the amount of the plan payments for any amount attributable to the adequate protection payments.

(b) Trustee Payment.  The trustee is authorized to make pre-confirmation adequate protection payments to one or more secured creditors if:

(1) The plan provides for payment of the adequate protection payments;

(2) The debtor’s Schedule D discloses the debt and describes the collateral;

(3) A secured proof of claim is filed, with documentation evidencing a perfected purchase money security interest in the personal property;

(4) The debtor or creditor sends a request to the trustee for payment of pre-confirmation adequate protection payments set forth in the plan; and

(5) The personal property collateral is depreciating and the amount of the adequate protection payments approximates the depreciation, which is generally at least 1% of the value of the property per month.

(c) Payment Without Prejudice.  Payment of pre-confirmation adequate protection is without prejudice to the secured creditor’s right to object to the plan, or seek a determination on to the value of the secured claim or amount necessary to provide adequate protection.

(d) Timing of Payments.  To the extent the trustee has funds on hand, the trustee must begin making pre-confirmation adequate protection payments if the trustee receives the request more than fourteen (14) days before the trustee’s scheduled monthly distribution; otherwise the trustee will distribute adequate protection payments beginning with the next month’s distribution.  If the debtor has paid an insufficient amount to pay adequate protection payments in full, the trustee will pay the creditors in pro rata, as modified by LR 2084-4(b)(3)(C).

(e) Payment on Confirmation.  If the case trustee has not made pre-confirmation adequate protection payments, the trustee will disburse the accumulated adequate protection payments upon plan confirmation. If a plan is confirmed, the trustee is authorized to retain the authorized percentage fee for all adequate protection payments disbursed in the case.

(f)  Payment on Pre-Confirmation Dismissal.  If the Court dismisses the case before plan confirmation, the trustee will pay the creditor any adequate protection payments due and owing, in accordance with (b) above or Court Order, from funds received by the trustee under Code § 1326(a)(1)(A), less allowed administrative expenses. If the trustee is required to pay adequate protection payments to more than one creditor but the trustee has insufficient funds to pay them in full, the trustee shall pay the creditors pro rata.

Notes 2023: This rule has been amended in response to Matter of Evans, 69 F.4th 1101 (9th Cir. 2023).  

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