Willett v. Midfirst Bank (In Re Willett)

MEMORANDUM

WARREN W. BENTZ, Bankruptcy Judge.

The issue before the Court is what interest rate should be applied to arrearages on a debt secured by a mortgage on the Debtors’ residence, to be cured by installment payments over the term of a Chapter 13 Plan. The Debtors propose the state judgment rate of 6%; the mortgagee proposes the contract rate of 10%, which it alleges is also the current market rate of interest.

The Debtor does not assert that 10% is incorrect as the market rate of interest. The Debtor instead posits that a 6% rate “represents a ‘benchmark’ that is deemed fair and equitable.”