The Bankruptcy Appellate Panel reversed and vacated orders of the bankruptcy court and remanded. The panel held that denial of confirmation of a chapter 13 plan solely because it provided for debtors’ direct payment of their unimpaired car loan to a creditor rather than to a bankruptcy trustee was error.
Whidbey Island Bank lent Richard and Joanne Giesbrecht purchase money for an auto. That loan was current when the Giesbrechts petitioned in Washington for chapter 13 bankruptcy protection. The Giesbrechts’ plan proposed continuation of their direct monthly payments to the bank under the auto loan’s original terms. Their plan proposed to pay other creditors through payments made to bankruptcy trustee Michael Fitzgerald.
