In the state of Texas in 1989, Elray Rash (Rash) (defendant) purchased a tractor truck for $73,700 for use in his business. He made a down payment to the seller and agreed to pay off the purchase price over 60 months. The loan and a lien on the truck as collateral were assigned to Associates Commercial Corporation (ACC) (plaintiff). In 1992, Rash submitted a bankruptcy petition and repayment plan under Chapter 13 of the Bankruptcy Code, at which point he owed $41,171 to ACC. Under the proposed plan, Rash sought to retain the truck and to pay ACC, over the life of the plan, the truck’s present value, which Rash alleged to be $28,500. ACC objected. It requested that it be given repossession of the truck and asserted that its claim was secured to the amount of $41,171. At a hearing on the truck’s value, Rash proposed that the value be determined by the amount ACC would receive upon foreclosure and sale. ACC proposed that the value be determined by the amount Rash would be obligated to pay for a like vehicle. The bankruptcy court ruled in favor of Rash and approved the plan. The district court affirmed. Upon appeal, a panel of the Court of Appeals for the Fifth Circuit reversed, but on rehearing en banc, the Fifth Circuit affirmed the district court. ACC petitioned the United States Supreme Court.