February 21, 2014
(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)
A debtor whose ex-fiancee absconded with the couple’s unpaid-for engagement rings cannot alter their collateral value or secured status in his Chapter 13 plan, a Georgia bankruptcy judge has ruled in upholding a bank’s objection to the plan.
The creditor’s claim was subject to a special provision for secured interests on items bought within one year prior to a bankruptcy filing, U.S. Bankruptcy Judge John S. Dalis of the Southern District of Georgia said.
Debtor Alex Prior filed for Chapter 13 relief in August 2013, six months after he had purchased engagement rings with $1,500 in financing from creditor 1st Franklin Financial.
Before filing bankruptcy Prior proposed, but his fiancee soon broke off the engagement and moved out of state taking both rings. According to the opinion, she has repeatedly refused to return the rings despite Prior’s cooperation with the bank’s pursuit of its collateral.