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In Re Bonner

43 B.R. 261, 1984 Bankr. LEXIS 4902
CourtUnited States Bankruptcy Court, N.D. Alabama
DecidedOctober 1, 1984
Docket19-00426
StatusPublished
Cited by5 cases

This text of 43 B.R. 261 (In Re Bonner) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Bonner, 43 B.R. 261, 1984 Bankr. LEXIS 4902 (Ala. 1984).

Opinion

OPINION DENYING SECURED STATUS

GEORGE S. WRIGHT, Bankruptcy Judge.

This matter came before the Court to determine whether the claim of Norwest Financial Alabama, Inc. in the amount of $1,441.30 is a secured claim under Sec. 506(a).

The debtors, Mason W. Bonner and Iva J. Bonner filed a petition under Chapter 13 of the Code and a confirmation hearing was held on April 27, 1984. One claim in the amount of $5,778.25 was classified as a secured claim secured by a real estate mortgage on the homeplace of the debtors. The current mortgage payments of $155.00 per month were to be paid in the Chapter 13 plan.

A second claim for $1,441.30, claimed to be also a secured claim and secured by the same real estate mortgage under a future advance clause (dragnet clause). The debt- or contested the validity' of the dragnet clause and the creditor claimed that the dragnet clause dragged in the subsequent advance. Briefs and arguments have been submitted by both parties.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. On November 1, 1982 the debtors executed a mortgage for $7,440.00 to Dial Finance Company of Alabama (the predecessor to present creditor, Norwest Financial Alabama, Inc.), which mortgage was recorded on November 3, 1982.

*262 2. On March 25, 1983, the creditor, Nor-west Financial Alabama, Inc. advanced $1,500.83 and showed that the security was a real estate mortgage, including $395.17 finance charge and 23.53% APR for a total payments of $1,896.00.

3. The validity of the future advances clause (dragnet) depends upon the construction of the clauses contained in the original real estate mortgage dated November 1, 1982 as compared to the Alabama cases construing the effectiveness of a dragnet clause as shown on the chart below:

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Cite This Page — Counsel Stack

Bluebook (online)
43 B.R. 261, 1984 Bankr. LEXIS 4902, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-bonner-alnb-1984.