Evolve appealed the orders confirming the Plan and denying the motion for a new trial to the district court. Evolve filed a motion for a new trial, which the bankruptcy court denied. The bankruptcy court entered an order confirming the Plan. Evolve filed an objection to the Plan, specifically the “partial surrender” of collateral under the Camry Claim, arguing that the cross-collateralization provisions in the loans prevented Barragan-Flores from surrendering the Camry and retaining the Sierra.
Barragan-Flores could no longer afford to keep both vehicles, so his Chapter 13 Plan proposed that he retain the Sierra, “cram down” the Sierra Loan, and surrender the Camry to Evolve as collateral for the Camry Loan. Both loan agreements contain a cross-collateralization provision that states: “Collateral securing other loans with the Credit Union may also secure this loan.” The parties stipulated that each loan agreement is “cross-collateralized by both vehicles.” Evolve filed two separate Proofs of Claim, one for the Camry Loan (Camry Claim) and another for the Sierra Loan (Sierra Claim). Barragan-Flores possessed both vehicles at the time of his Chapter 13 filing. Barragan-Flores used the proceeds of the first loan to purchase a 2011 GMC Sierra (Sierra Loan), and the proceeds of the second loan to purchase a 2016 Toyota Camry (Camry Loan).
Prior to filing his Chapter 13 petition, Barragan-Flores entered into two loan agreements with Evolve Federal Credit Union (Evolve). In June 2017, Lucio Barragan- Flores filed a Chapter 13 bankruptcy petition. The bankruptcy court approved the Plan, but the district court reversed, holding that Barragan-Flores could not elect to surrender one of the vehicles as the collateral securing the Camry Loan (the Camry) and retain the other vehicle (the Sierra). § 1325(a)(5), proposed retention of the Sierra, “cram down” of the loan for the purchase of the Sierra, and surrender of the Camry as the collateral for the purchase the Camry. Barragan-Flores’s bankruptcy plan (the Plan), citing 11 U.S.C.
The loans were cross-collateralized, meaning that the Sierra and Camry were both pledged as collateral for each loan. At the time, he had outstanding balances on car loans with Evolve Federal Credit Union that he had obtained to purchase a GMC Sierra and a Toyota Camry. OWEN, Chief Judge: Lucio Barragan-Flores filed for Chapter 13 bankruptcy. Before OWEN, Chief Judge, and WIENER and DENNIS, Circuit Judges.
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