Donald Neal Rake, et al. v. William J. Wade, Trustee (508 U.S. 464)
U.S. Supreme Court · decided June 7, 1993 · Supreme Court Database (Spaeth)
- Citation
- 508 U.S. 464 · 113 S. Ct. 2187
- Decided
- June 7, 1993
- Term
- October Term 1992
- Vote
- 9–0
- Majority author
- Justice Thomas
- Issue area
- Economic Activity
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Conservative
Opinion excerpt
Justice Thomas delivered the opinion of the Court. This case requires us to decide whether Chapter 13 debtors who cure a default on an oversecured home mortgage pursuant to § 1322(b)(5) of the Bankruptcy Code, 11 U. S. C. § 1322(b)(5), must pay postpetition interest on the arrearages. We conclude that the holder of the mortgage is entitled to such interest under §§ 506(b) and 1325(a)(5) of the Code. I Petitioners Donald and Linda Rake, petitioners Earnest and Mary Yell, and respondents Ronnie and Rosetta Han-non initiated three separate Chapter 13 bankruptcy proceedings in the Northern District of Oklahoma. In each ease the debtors were in arrears on a long-term promissory note assigned to respondent William J. Wade, trustee (hereinafter respondent). The notes allowed a $5 charge for each missed payment but did not provide for interest on arrearages. Payment on the notes was secured by a first mortgage on the principal residence owned by each pair of debtors. The mortgage instruments provided that in the event of a default by the debtors, the holder of the note (now respondent as assignee) had the right to declare the remainder of indebtedness due and payable and to foreclose on the property. Because the value of the residence owned by each pair of debtors exceeded the outstanding balance on the corresponding notes, respondent was an oversecured creditor. In their Chapter 13…
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