Till v. SCS Credit Corporation, 541 U.S. 465 (2004)

By M. Jonathan Hayes

Issue: How do you compute the proper interest rate to pay a dissenting undersecured creditor in a chapter 13 Plan?

Holding: The “formula rate” is proper in chapter 13, i.e. start with the riskless or prime rate and add to that to allow for risk in the particular case.

Justice John Paul Stevens for the majority (5-4)
Thomas concurred, Scalia dissented joined by Rehnquist, O’Connor, Kennedy

The debtor owed secured creditor $4,894 on a truck worth $4,000.  The loan had an interest rate of 21 . . .

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