In Re Acaya

OPINION AND ORDER ON OBJECTION TO CONFIRMATION OF CHAPTER 13 PLAN

MARILYN MORGAN, Bankruptcy Judge.

Introduction

Wells Fargo Financial Acceptance (WFFA) objects to confirmation of Leticia Acaya’s proposed chapter 13 plan. At issue is whether the negative equity from Acaya’s trade-in vehicle should be treated as purchase money for the purposes of the hanging paragraph of § 1325(a) or whether the entire transaction has been transformed, entirely losing its purchase money status, or whether the dual status rule is applicable in California.

Factual Background

The facts are undisputed. Leticia Acaya…