Learn Bankruptcy Shorthand: Till

Part of the lingo of bankruptcy practitioners are the names of notable bankruptcy cases that establish basic principles of bankruptcy law.  Ever heard a Chapter 13 trustee or opposing counsel talk about the Till rate?  Did you scour the Wall Street Journal looking for the published Till rate?

Scour, instead, your favorite listing of hit cases from the Supremes. Till was a Supreme Court decision that established how we calculate the interest rate on a secured claim in a Chapter 13 case. The debtor in Till bought a used truck for 21% interest on a $6000 purchase. The plan proposed to pay 9.5% on the car claim. The creditor predictably wanted the contract rate.

The Supreme Court noted that, in the courts below, some four different methods for determining the correct interest rate in a Chapter 13 case had been advocated.  Justice Stevens wrote the opinion with three justices joining him.  Justice Thomas concurred.

I’m not going to tell you how it came out.  Read the decision.  Add  the “Till rate” to your bankruptcy vocabulary.  Remember that even on 910 cars, where you’re locked in to the contractual loan balance, you can use Till to alter the interest rate.

My thanks to my friend and colleague Wendell Sherk who encouraged me to write on “the cases you need to know” and who added a number of names to my list for this on going series of posts.

Image courtesy Hugo90