In re Street

In re Street

Opinion

 [*780] MEMORANDUM OPINION

The matter before this court is creditor Rent-Way, Inc.'s objection to the confirmation of the chapter 13 plan dated April 23, 1997, filed by debtor John V. Street (Debtor). The issue was submitted on the parties' briefs in connection with confirmation of the plan dated April 23, 1997, as modified. There are no material facts in dispute. We must determine whether the property is subject to a security interest or to the Pennsylvania Rental-Purchase Agreement Act, 42 Pa.Cons.Stat.Ann. § 6901 et seq. (1996). We find that the Rental-Purchase Agreement Act applies.  [**2]  Therefore, Rent-Way's objection to Debtor's chapter 13 plan is sustained.

Debtor argues that the leased items are estate property because he retained possession of the property upon filing this chapter 13 bankruptcy on April 9, 1997. We note that § 1306, and § 541 incorporated in § 1306 by reference, defines property of the estate broadly enough to apply to a mere possessory interest in personal property. Thus, for purposes of this opinion, we will assume, without deciding, that Debtor's possessory interest in the leased items is estate property. However, we find that his possessory interest is insufficient to defeat Rent-Way's statutory rights under the Pennsylvania Rental-Purchase Agreement Act. ²

 [**3]  On January 3, 1997, Debtor executed and delivered to Rent-Way rental purchase agreements for weekly payments for use of the following property: (1) a washer and a dryer -- $ 19.99 a week; (2) a VCR -- $ 9.99 a week; (3) an entertainment unit, a VCR, a 27-inch television -- $ 42.99 a week; and (4) a stereo and a 19-inch television -- $ 16.99 a week. See Exhibit A to Brief In Support of Confirmation of Chapter 13 Plan Dated April 23, 1997 (hereafter "Debtor's Brief"). See also Memorandum of Law in Support of Objection of Rent-Way, Inc. to Confirmation of Chapter 13 Plan Dated April 23, 1997, at 1 (hereafter "Rent-Way's Brief"). Both Debtor and his nondebtor wife, Connie Street, were listed as renters, but only Debtor was signatory to the January leases.

Sometime before Debtor filed the instant bankruptcy case, the January leases were terminated as the result of Debtor's nonpayment of the weekly rental amounts. ³ In March of 1997, one month before this chapter 13 was filed on April 9, 1997, Connie Street executed and delivered new leases for the same items on the same payment terms. The March leases are at issue. Again, payments  [*781]  were not made. ⁴ As of the date the bankruptcy [**4]  was filed approximately $ 180 was owed under the March leases. As of the date Rent-Way filed its objection, approximately $ 900 was owed. Unpaid rentals continue to accrue at the rate of $ 89.96 per week. ⁵

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