§ 10-18-10. Effect of approval of plan on prior secured creditors. (a) All prior secured creditors who have been scheduled in the plan from the initial filing of the petition with the court or whose application has been submitted to the court within ten (10) days of filing with the secretary of state as provided in § 10-18-8(a)(2) may either:

(1) Join the plan if approved and receive payments as determined by the plan; or

(2) Reclaim or repossess the collateral sold on security.

(b) If a prior secured creditor has not been scheduled in the plan from the initial filing of the petition with the court and whose application has not been submitted to the court within ten (10) days of the filing with the secretary of state as provided in § 10-18-8(a)(2), he or she may reclaim or repossess the collateral sold on security if the debtor defaults upon the contract of sale unless the retention of the collateral by the debtor is essential to the continuance of his or her employment upon reasonable terms and conditions. In such case subsection (e) of this section shall apply.

(c) If a secured creditor under subsection (a)(2) or (b) of this section or § 10-18-11(c) reclaims or repossesses the collateral sold on security, that shall be the extent of his or her recovery.

(d) Notwithstanding § 10-18-7, any action, judicial or non-judicial, by a secured creditor under subsection (a)(2) or (b) of this section or § 10-18-11(c) for the purpose of reclaiming or repossessing collateral sold on security shall be enforced.

(e) At any time either during the pendency of proceedings hereunder or pursuant to subsection (a)(2) or (b) of this section or § 10-18-11(c) and before a secured creditor shall have acquired actual possession of the collateral to which this subsection applies, the debtor may petition the court, upon notice to the secured creditor, to stay any action, judicial or nonjudicial, by the secured creditor to reclaim or repossess such collateral as the debtor shall identify in his or her petition on the grounds that the retention of the collateral by the debtor is essential to the continuance of his or her employment upon reasonable terms and conditions. Upon the filing of a written notice by the secured creditor, within twenty (20) days of the service upon him or her of a copy of the petition, the court shall order a hearing and, upon a determination for the debtor, shall order a stay which shall be effective during the pendency of these proceedings. The stay shall automatically terminate if the debtor shall fail to pay to the creditor on any installment date, as provided in the plan, a payment in the minimum amount of the approximate depreciation in the fair market value of the relevant collateral for the period since the previous payment or the installments actually due under the relevant deferred payment contract, whichever is less. The amount may be fixed by the court and may be varied from time to time upon petition to the court by the secured creditor, the receiver, or the debtor, with notice to all other parties.

(f) Notwithstanding subsection (e) of this section, a creditor may at any time during the pendency of proceedings herein, petition the court to reclaim or repossess such collateral as such creditor may identify in his or her petition. A creditor may also petition the court to direct the receiver to distribute assets in his or her possession. The court shall determine the manner of giving notice of such petitions and shall in its discretion grant, deny, or modify the creditor's petition.

History of Section. (P.L. 1972, ch. 186, § 1.)