Nuvell Credit Co. v. Callicott (In Re Callicott)

MEMORANDUM AND ORDER

CATHERINE D. PERRY, District Judge.

This bankruptcy appeal presents an issue that has been dubbed the “Rorschach Inkblot Test of the bankruptcy bench and bar.” 1 When debtor Lisa Renee Callicott purchased her new Chevrolet, she traded in a Chrysler on which she still owed money. Callicott refinanced the “negative equity” in her old car when she obtained the financing for the new car. Nuvell Credit Company contends that the entire debt must be considered a secured debt, under the hanging paragraph added to the bankruptcy law in 2005,11 U.S.C. § 1325(a)(*). 2 To decide this…