TILA Tender in Chapter 13 – Lookout!

“In this case, Debtors sent a valid notice of rescission to the Defendants during the extended rescission period afforded them by the Defendants’ failure to provide each of them with two copies of the NOR.  As such, the Defendant’s security interest is void and they hold nothing more than an unsecured claim which will receive the same dividend as other unsecured claims under the Debtor’s Chapter 13 plan.  Moreover, the Debtors are only liable for the principal of the loan, minus the $16,143.32 which the parties stipulated was given by the Debtors in connection with the Refinancing as they are no longer liable for any finance or other charges…

In light of my findings with respect to the Debtors’ CCCDA claims, the Objection is sustained.  I find that Option One holds a unsecured claim in the amount of $142,806.68.”(emphasis added)

Jaaskelainen v. Wells Fargo Bank, N.A. (In re Jaaskelainen), 391 B.R. 627 (Bankr. D. Mass. 2008)