In re Horn, __ B.R. __, 2006 WL 416314 (Bankr. M.D. Ala. 2/23/06)

Loan against equity in vehicle is not a PMSI claim -- hence not subject to the 910 day cramdown restriction

Held: not all loans secured by vehicles will fall within the ambit of 1325(a). The lender made a loan to the debtor which was used to purchase the car in 1997, and then between 2001 and 2003 refinanced the loan four more times, each time advancing additional funds to the debtor. The court held that under state law, the loan did not qualify as a "purchase-money obligation" because the debtor did not incur the entire debt as all or part of the purchase price of the vehicle. As a result of the multiple refinancings and additional advances, the security interest in the vehicle lost its purchase-money character. Thus, 506 still applied in determining the secured claim of the lender, which could be bifurcated and stripped down.