In re Royal

Sol Acceptance, LLC ("SOL") objects to confirmation of the chapter 13 plan of Ricol and Kimberly Royal ("Royal") on the ground that the so-called "Hanging Paragraph" of 11 U.S.C. Section 1325 (a) 1 prohibits bifurcation and reduction of its secured claim. Royal opposes the objection, arguing that he acquired the vehicle for business; not personal use, making the Hanging Paragraph inapplicable. At issue is whether Royal's vehicle was "acquired for the personal use of the debtor" as it is construed under the Hanging Paragraph, in which case SOL's claim may not be bifurcated. There is no controlling authority in the Ninth Circuit defining what constitutes a vehicle "acquired for personal use."

The Court has jurisdiction to determine this matter pursuant to 28 U.S.C. §§ 1334 (b) and 157(b)(2)(L). The following are the Court's findings of fact and conclusions of law as required by Federal Rule Bankruptcy Procedure 7052, made applicable to contested matters by Federal Rule Bankruptcy Procedure 9014.

As discussed more fully below, the Court concludes that after considering the totality of the circumstances, Royal does not carry his burden of proving the vehicle was acquired…