On Dec. 6, 2018, the U.S. Court of Appeals for the Eleventh Circuit held that a Chapter 13 plan stating that a secured debt will be paid directly to the creditor does not constitute the debt being “provided for” by the plan, and thereby precluding a discharge of that debt. In Dukes v. Suncoast Credit Union, Case No. 16-16513, in the U.S. Court of Appeals for the Eleventh Circuit, the ruling by the Eleventh Circuit will not only have a profound impact upon consumers who file for Chapter 13 bankruptcy protection, but also on secured lenders who may wish to collect deficiency balances against debtors, but have otherwise been reticent to do so thus far.

Factual History

In early 2009, Mildred M. Dukes filed for Chapter 13 bankruptcy protection, seeking to reorganize and repay her debts according to certain stated conditions. Included in her schedules were two mortgages with Suncoast Credit Union, each secured by Dukes’ principal residence, totaling approximately $150,000, and not due to mature until 2022.