The Debtor had obtained a series of loans from Creditor, pledging three automobiles as collateral for those loans. Creditor, however, did not record liens with the DMV against the vehicles promptly and the Debtor sought to set aside the liens as a preference under §547(b).
The Court held to avoid the transfer of an interest of the debtor in property that the elements of §547(b) were:
(1) to or for the benefit of a creditor;
(2) for or on account of an antecedent debt owed by the debtor before such transfer was made;
(3) made while the debtor was insolvent;
(4) made–
(A) on or within 90 days before the date of the filing of the petition; or
(B) between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and
(5) that enables such creditor to receive more than such creditor would receive if–
(A) the case were a case under chapter 7 of this title;
(B) the transfer had not been made; and
(C) such creditor received payment of such debt to the extent provided by the provisions of this title.
The liens as to two of the automobiles met all requirement, but as to the third vehicle, the lien was recorded more than 90-days prior to filing of the bankruptcy and could not, therefore, be avoided.
It would appear that the Creditor did not raise the issue, presented in the Baldwin and Robinson cases from the EDNC, that a Chapter 13 Debtor doesn't have clear authority to raise a §547 avoidance.
Nicholson-Case Bankruptcy Court Middle District NC.PDF
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