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Topics:

Topic #21:

Keywords: ride-through . reaffirmation . redemption . surrender .

Secured debt: "Ride Through" still viable after BAPCPA? Can debtor keep keep property by making payments if reaffirmation submitted and rejected by court?

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Case Summary In re Parker, 139 F.3d 668, 9th Cir., 3/17/1998,

In re Parker, 139 F.3d 668 (9th Cir. 1998)

Topics

Secured Debts > Ride Through

Secured debt: "Ride Through" still viable after BAPCPA? Can debtor keep keep property by making payments if reaffirmation submitted and rejected by court?

41 Cases , IssueID 21

Ch 7 Means Test
Form 22A, Line 42
Ch 13 Means Test
Form 22C Line 47

Topic Description:

Before the passage of BAPCPA in 2005, five Circuit Courts had held that a "fourth option" existed in addition to the choices of "redemption" "reaffirmation" and "surrender".

This fourth option was nicknamed the "ride through" which essentially meant that the debtor's personal liability for the original debt was discharged, but the creditor was precluded from repossessing the item so long as the debtor remained current on the original contract payments.

In a "ride through" scenario, if the item suddenly becomes worthless, due to, say a car accident or deterioration, the debtor can simply stop making payments, surrender the now-worthless property, and owe not a penny more.

Understandably, ride through is an attractive option that consumer bankruptcy lawyers advocated for their clients in the jurisdictions that allowed it.

The question now is whether this option still exists.

At first blush, it looks like BAPCPA eliminated the "ride through" option, and many courts have ruled that way.

However, a strong argument has been made and followed by some courts that IF a debtor submits a reaffirmation agreement for approval, the court can effectively grant a "backdoor ride through" by disallowing the reaffirmation -- thereby satisfying the new law's requirement that the debtor pick one of the three options -- in this case reaffirmation.
The judge cooperates in setting up the ride through by disapproving of the reaffirmation on the grounds that the "ride through" option will give the debtor a much better deal, and as a consequence, the reaffirmation is not "in the debtor's best interest" as required by law.

End result: the contract goes forward under state law, whatever it happens to be. The Federal judges ruling on a matter of Federal Bankruptcy law is limited to only those provisions affected by it -- in this case, the debtor's personal liability for the debt is NOT reaffirmed, other aspects of the contract may still be enforceable under state law.

In some states, this means that that, as long as the debtor remains current on the payments, the property can't be repossessed, but the debtor is is no longer personally liable for unpaid amounts in the case of a default, but the property must be surrendered)

The Columbia Law Review Article makes the case that ride through should survive in those jurisdictions that allowed it.

Lines of Cases:

A:

Ride through not permitted if debtor did not propose a reaffirmation

B::

Depends on state law issues re waver of right to repossess if current payments are accepted

C:

"Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm

D:

Attorney "Backdoor Ride Through Catch 22": Must sign off on reaffirmation as being in debtor's best interest, so judge can reject as NOT being in debtor's best interest.

E:

"Everything else..."

Topic Background / Overview:

  • Type A = Ride through not permitted if debtor did not propose a reaffirmation
  • Type B = Depends on state law issues re waver of right to repossess if current payments are accepted
  • Type C = "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm
  • Type D = Attorney "Backdoor Ride Through Catch 22": Must sign off on reaffirmation as being in debtor's best interest, so judge can reject as NOT being in debtor's best interest.
  • Type E = "Everything Else"
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Cases for Zip , California Northern District Bankruptcy Court

Ninth Circuit Cases

In re Barron

Bankr.D.Arizona - 441 BR 131 - 2010-12-14 - ,

Google ID#: 11605297745989459780
(Type : )

Court cannot review a reaffirmation agreement if counsel does not execute a declaration in support of the reaffirmation as required by 524(c)(3). Counsel cannot opt out of representing debtor on the issue of reaffirmation. In the past court as allowed it but will not allow it any longer.

Dumont v. Ford Motor Credit Co. (In re Dumont)

9th Cir. - 581 F. 3d 1104 - 2009-09-15 - 7 , NA

Google ID#: 9021870462007526958
(Type A : Ride through not permitted if debtor did not propose a reaffirmation )

"At least where the debtor has not attempted to reaffirm, our decision in Parker has been superseded by BAPCPA."

In re Hamilton

Bankr.D.Alaska - ___ B.R. ___ - 2009-06-09 - 7 , NA

Google ID#: 7756942365058066683
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Jensesn

Banrk. C.D.Cal - 407 B.R. 378 - 2009-04-28 - 7 ,

Google ID#: 8903358563729138555
(Type E : )

Detailed discussion of current status of "ride Through" opitons

In re Moustafi

Bankr.D.Ariz - 371 B.R. 434 - 2007-06-04 - 7 , NA

Google ID#: 11049440995269440043
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

"The Debtor complied with the requirements of the Bankruptcy Code by timely filing her statement of intention and timely entering into a reaffirmation agreement with the credit union that holds a security interest in her car. That reaffirmation agreement will not, however, be approved because the Debtor's net monthly income is less than her expenses and because the car is worth less than what she owes on it. Despite the changes made to the Bankruptcy Code by the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA"), a debtor may still, under certain limited circumstances, retain a car even without a court approved reaffirmation agreement. This is such a case."

In re Quintero

Bankr. N.D. Cal. - 2006 WL 1351623 - 2006-05-17 - ,

Google ID#:
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

section 521(a)(6) does not require reaffirmation agreement to be approved

In re Parker

9th Cir. - 139 F.3d 668 - 1998-03-17 - ,

Google ID#: 16962936717287705780
(Type : )

Main 9th Circuit authority before BAPCPA. - Allowing ride through.

Other Circuits

Hall v Ford Motor Credit co. LLC

Kansas Supreme Court - No 103.370 - 2011-05-02 - ,

Google ID#: 15374112152432393462
(Type B : Depends on state law issues re waver of right to repossess if current payments are accepted )

Under Kansas law, creditor can repo pickup truck if there is no reaffirmation, even though payments are current.

In re Grisham

Bankr. N.D. - 436 B.R. 896 - 2010-08-07 - 7 ,

Google ID#: 8252149452422096536
(Type : )

Court refused to approve reaffirmation that imposed undue hardship on debtor where loan was $17K on a $16K truck with an APR of 17.5%, and incime from social security and unemployment not sufficient.

In re Law

Bankr. W.D. Pa. - 421 B.R. 735 - 2010-01-19 - ,

Google ID#: 7991550619724689971
(Type E : )

A debtor can ride through on a real estate loan, and need not reaffirm.

Daimler Chrysler Financial Services v. Jones

4th Cir. - 591 F.3d. 308 - 2010-01-11 - ,

Google ID#: 6590911306489204057
(Type A : Ride through not permitted if debtor did not propose a reaffirmation )

Ride through not available if debtor fails to state whether he intends to redeem or reaffirm.

In re Perkins

Bankr. M. North Carolina - 418 B.R. 680 - 2009-11-19 - 7 ,

Google ID#: 5472198545361814092
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

reaffirmation rejected because it was untimely filed, creditor cannot repossess as long as payments are current.

In re Nouchanthavong

Bankr. N.D. Iowa - No. 09-02181 - 2009-11-13 - 7 ,

Google ID#: 7712823413260853656
(Type E : )

Court refused to approve reaffirmation for unsecured debt cosigned with debtor's mother, because reaffirmation would be of no benefit to debtor. Debtor is still free to continue making "voluntary" payments once personal liability is discharged.

In re Linderman

Bankr.M.D.Florida - ____ - 2009-10-09 - ,

Google ID#: 7074356228812604016
(Type A : Ride through not permitted if debtor did not propose a reaffirmation )

In re Morton (Ford Motor Credit Co. v. Morton)

bankr. 6th Cir. - 410 B.R. 556 - 2009-09-09 - ,

Google ID#: 16095502097696863632
(Type D : Attorney "Backdoor Ride Through Catch 22": Must sign off on reaffirmation as being in debtor's best interest, so judge can reject as NOT being in debtor's best interest. )

"Attorney-certified reaffirmation agreements are effective upon filing so long as there is no presumption of undue hardship"

In re Hart

Bankr.D.Delaware - 402 B.R. 78 - 2009-03-10 - ,

Google ID#: 14025008805483322704
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

The Court makes two findings. First, under the Third Circuit's opinion in Price[2] and section 521 of the Bankruptcy Code, the debtors' loans may "pass through" the bankruptcy case unaffected if the debtors declare their intention to retain the collateral and continue to make regular payments, which the debtors have done.[3] Second, the Court disapproves the reaffirmation agreement under section 524(m) of the Bankruptcy Code because the presumption of undue hardship has not been rebutted.

In re Baker

D.Delaware - 400 B.R. 136 - 2009-01-29 - 7 ,

Google ID#: 15624132961094368634
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

Creditor violated automatic stay by reposessing vehicle after bankruptcy discharge even though debtor had taken advantage of "backdoor ridetrhough" (see earlier Baker ruling at 390 BR 424).

In re Minardi

N.D.Oklahoma - 399 B.R. 841 - 2009-01-23 - ,

Google ID#: 11883250454578921841
(Type D : Attorney "Backdoor Ride Through Catch 22": Must sign off on reaffirmation as being in debtor's best interest, so judge can reject as NOT being in debtor's best interest. )

Attorney attempts to get clever to allow reaffirmation agreement disaproved, by letting debtor go pro se as to reaffirmation. Court says attorney can't limit his represenation like that. Attorney left with Catch 22, and has to sign off on reaffirmation being in debtor's best interest, in order to file it -- so the judge can reject it.... What's an attorney to do??? And pity the poor confused client trying to make sense of it all.....

In re Schmidt

Bankr. W.D.Missouri - 397 B.R. 481 - 2008-11-17 - ,

Google ID#: 16702856082031098033
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

Coastal Federal Credit Union v Hardiman

E.D.N.C. - 398 BR 161 - 2008-10-28 - ,

Google ID#: 2118928967638828500
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Waller

Bankr.D.S.C. - 394 B.R. 111 - 2008-09-25 - ,

Google ID#: 16682034567324957977
(Type : )

In re Baker

D.Delaware - 390 B.R. 524 - 2008-06-10 - ,

Google ID#: 7567158202155091391
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

The Court finds that, under the Third Circuit's opinion in Price,[2] the Debtors' car loan "passed through" the bankruptcy case unaffected because the Debtors timely entered into a reaffirmation agreement and they are current with their payments. The Court further finds that there was no basis for repossession under Delaware law because the only default that Creditor could assert was based on an unenforceable ipso facto clause. Finally, because the repossession of the Debtors' vehicle was a violation of the discharge injunction, the Court will order Creditor to return the vehicle and will award compensatory damages to the Debtors.
Note: Affirmed at 400 B.R. 136 where court held creditor in violating automatic stay for reposessing vehicle after discharge.)

In re Caraballo

Bankr.D.Connecticut - 386 BR 398 - 2008-04-29 - ,

Google ID#: 1257903398197402351
(Type : )

In re Chim

Bankr.D.Maryland - 381 B.R. 191 - 2008-01-25 - ,

Google ID#: 11444900319920261417
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

Court lays out the step by step approach to a "back door ride through" via rejection of a reaffirmation agreement.

"Further, at the hearing, it became clear that one of the Debtor's primary reasons for entering into the Reaffirmation Agreement is her concern that, if the Court disapproved the Reaffirmation Agreement, the Lender could exercise the creditorrelief provisions of Sections 362(h), 521(a)(6) and 521(d) by, among other 193 things, declaring a default under the ipso facto[2] provision of her loan contract and repossessing the vehicle notwithstanding the fact that she remains current on the loan. The Court finds and concludes that the Debtor has complied with the requirements of Section 521(a)(2) by timely stating her intention to reaffirm the loan and by timely entering into the Reaffirmation Agreement with the Lender. Therefore, the provisions of Sections 362(h), 521(a)(6) and 521(d) do not apply, and the automatic stay remains in place with respect to the vehicle, the vehicle remains property of the estate, the Debtor is hot obligated to turn over possession of the vehicle, and the Lender may not exercise remedies as a result of default under the ipso facto provision under the loan agreement. Stated otherwise, where a debtor timely complies with Section 521(a)(2), the mere fact that the Court does not approve the reaffirmation agreement does not trigger the creditor relief provisions of Sections 362(h), 521(a)(6) or 521(d), Accordingly, the Debtor's concern that the Lender may invoke the creditor-relief provisions of Sections 362(h), 521(a)(6) or 521(d) if the Court disapproves the Reaffirmation Agreement is not warranted, and is not sufficient to overcome the presumption of undue hardship."

In re Stevens

Bankr.E.D.Virgina - 365 B.R. 610 - 2007-03-09 - ,

Google ID#: 702440142184771044
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Hussain

Bankr. E.D.Virginia - 364 B.R. 211 - 2007-03-05 - ,

Google ID#: 5122241988197630620
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Blakeley

Bankr.D.Utah - 363 BR 225 - 2007-01-17 - ,

Google ID#: 7572009884430292114
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Donald

Bankr.E.D.N.C. - 343 B.R. 524 - 2006-06-12 - 7 ,

Google ID#: 14394918521098274550
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Rowe

D.Kan. - 342 B.R. 341 - 2006-05-10 - ,

Google ID#: 1071263325083500652
(Type B : Depends on state law issues re waver of right to repossess if current payments are accepted )

"ride through option not available after BAPCPA. No protection by stay. but "although Congress technically eliminated the "fourth option," as now there are consequences for failing to obtain a right of continued possession through redemption or reaffirmation, as applied to consumer transactions, in Kansas the creditor's remedy of expiration of the stay in many cases will be illusory, because the conditions to declare a default and obtain possession of the collateral will not be present under Kansas law when the 352*352 debtor remains current on the obligation and there is no other basis for finding significant impairment" (BUT See Hall v Ford Motor Credit co. LLC, (Kansas S.Ct 2011)

In re Price

3rd Cir - 370 B.R. 362 - 2004-02-03 - ,

Google ID#: 3822800023471030309
(Type : )

Main 3rd Circuit authority before BAPCPA.

In re Burr

1st Cir. - 160 F.3d 843 - 1998-11-25 - ,

Google ID#: 13859586450413514490
(Type : )

Main 1st Circuit authority before BAPCPA. - NOT allowing ride through.

In re Boodrow

2d Cir - 126 F.3d. 43 - 1997-09-12 - ,

Google ID#: 15036954109872325970
(Type : )

Main 2nd Circuit authority before BAPCPA. - Allowing ride through.

In re Johnson

5th Cir - 89 F.3d 249 - 1996-07-26 - ,

Google ID#: 55814360578555588
(Type : )

Main 5th Circuit authority before BAPCPA. - NOT allowing ride through.

In re Taylor

11th Cir. - 3 F.3d 1512 - 1993-10-13 - ,

Google ID#: 2665620218587266004
(Type : )

Main 11th Circuit authority before BAPCPA. - NOT allowing ride through.

In re Belanger

4th Cir. - 962 F.2d 345 - 1992-04-27 - ,

Google ID#: 13209982855477841840
(Type : )

Main 4th Circuit authority before BAPCPA. - Allowing ride through.

In re Edwards

7th Cir - 901 F.2d 1387 - 1990-04-27 - ,

Google ID#: 4937494646125081785
(Type : )

Main 7th Circuit authority before BAPCPA. - NOT allowing ride through.

Lowry Fed. Credit Union v. West

10th Cir - 882 F.2d 1543 - 1989-08-18 - ,

Google ID#: 2164148674756354577
(Type : )

Main 10th Circuit authority before BAPCPA. - Allowing ride through.

In re Bell

6th Cir - 700 F.2d 1053 - 1983-02-22 - ,

Google ID#: 4469311618811621767
(Type : )

Main 6th Circuit authority before BAPCPA. - NOT allowing ride through.

In re Bennet

Bankr. M.D.N.C. - - - ,

Google ID#:
(Type : )

A debtor can ride through on real property but disagreeing about the role of the court in approving a reaffirmation on a real property loan for an unrepresented debtor.

In re Law

1/19/2010 - 421 B.R. 735 - - ,

Google ID#: 7991550619724689971
(Type E : )

Pro se debtor's reaffirmation of mortgage was of no benefit so court delayed entry of discharge so she could rescind the agreement. because, persuant to In re Price, 370 F.2d 362 (3rd cir 2004). Because debt was secured by real property, court could not rescind the agreement, but debtor could, so court allowed 60 days for her to do so if she wished.

In re Pope

Bankr. E.D.Va - - - 2011 ,

Google ID#: 328449291181308593
(Type E : )

Court will not reaffirm mortgage because ride through is still valid for mortgages and reaffirmation would not be in debtor's best interest. Fact that lender is demanding reaffirmation to get a loan modification does not change result. Court will reaffirm the modification once it has done, but it will not reaffirm original debto as a condition of the loan modification.

Hall v Ford Motor Credit co. LLC

Kansas Supreme Court - No 103.370 - 2011-05-02 - ,

Google ID#: 15374112152432393462
(Type B : Depends on state law issues re waver of right to repossess if current payments are accepted )

Under Kansas law, creditor can repo pickup truck if there is no reaffirmation, even though payments are current.

In re Barron

Bankr.D.Arizona - 441 BR 131 - 2010-12-14 - ,

Google ID#: 11605297745989459780
(Type : )

Court cannot review a reaffirmation agreement if counsel does not execute a declaration in support of the reaffirmation as required by 524(c)(3). Counsel cannot opt out of representing debtor on the issue of reaffirmation. In the past court as allowed it but will not allow it any longer.

In re Grisham

Bankr. N.D. - 436 B.R. 896 - 2010-08-07 - 7 ,

Google ID#: 8252149452422096536
(Type : )

Court refused to approve reaffirmation that imposed undue hardship on debtor where loan was $17K on a $16K truck with an APR of 17.5%, and incime from social security and unemployment not sufficient.

In re Law

Bankr. W.D. Pa. - 421 B.R. 735 - 2010-01-19 - ,

Google ID#: 7991550619724689971
(Type E : )

A debtor can ride through on a real estate loan, and need not reaffirm.

Daimler Chrysler Financial Services v. Jones

4th Cir. - 591 F.3d. 308 - 2010-01-11 - ,

Google ID#: 6590911306489204057
(Type A : Ride through not permitted if debtor did not propose a reaffirmation )

Ride through not available if debtor fails to state whether he intends to redeem or reaffirm.

In re Perkins

Bankr. M. North Carolina - 418 B.R. 680 - 2009-11-19 - 7 ,

Google ID#: 5472198545361814092
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

reaffirmation rejected because it was untimely filed, creditor cannot repossess as long as payments are current.

In re Nouchanthavong

Bankr. N.D. Iowa - No. 09-02181 - 2009-11-13 - 7 ,

Google ID#: 7712823413260853656
(Type E : )

Court refused to approve reaffirmation for unsecured debt cosigned with debtor's mother, because reaffirmation would be of no benefit to debtor. Debtor is still free to continue making "voluntary" payments once personal liability is discharged.

In re Linderman

Bankr.M.D.Florida - ____ - 2009-10-09 - ,

Google ID#: 7074356228812604016
(Type A : Ride through not permitted if debtor did not propose a reaffirmation )

Dumont v. Ford Motor Credit Co. (In re Dumont)

9th Cir. - 581 F. 3d 1104 - 2009-09-15 - 7 , NA

Google ID#: 9021870462007526958
(Type A : Ride through not permitted if debtor did not propose a reaffirmation )

"At least where the debtor has not attempted to reaffirm, our decision in Parker has been superseded by BAPCPA."

In re Morton (Ford Motor Credit Co. v. Morton)

bankr. 6th Cir. - 410 B.R. 556 - 2009-09-09 - ,

Google ID#: 16095502097696863632
(Type D : Attorney "Backdoor Ride Through Catch 22": Must sign off on reaffirmation as being in debtor's best interest, so judge can reject as NOT being in debtor's best interest. )

"Attorney-certified reaffirmation agreements are effective upon filing so long as there is no presumption of undue hardship"

In re Hamilton

Bankr.D.Alaska - ___ B.R. ___ - 2009-06-09 - 7 , NA

Google ID#: 7756942365058066683
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Jensesn

Banrk. C.D.Cal - 407 B.R. 378 - 2009-04-28 - 7 ,

Google ID#: 8903358563729138555
(Type E : )

Detailed discussion of current status of "ride Through" opitons

In re Hart

Bankr.D.Delaware - 402 B.R. 78 - 2009-03-10 - ,

Google ID#: 14025008805483322704
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

The Court makes two findings. First, under the Third Circuit's opinion in Price[2] and section 521 of the Bankruptcy Code, the debtors' loans may "pass through" the bankruptcy case unaffected if the debtors declare their intention to retain the collateral and continue to make regular payments, which the debtors have done.[3] Second, the Court disapproves the reaffirmation agreement under section 524(m) of the Bankruptcy Code because the presumption of undue hardship has not been rebutted.

In re Baker

D.Delaware - 400 B.R. 136 - 2009-01-29 - 7 ,

Google ID#: 15624132961094368634
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

Creditor violated automatic stay by reposessing vehicle after bankruptcy discharge even though debtor had taken advantage of "backdoor ridetrhough" (see earlier Baker ruling at 390 BR 424).

In re Minardi

N.D.Oklahoma - 399 B.R. 841 - 2009-01-23 - ,

Google ID#: 11883250454578921841
(Type D : Attorney "Backdoor Ride Through Catch 22": Must sign off on reaffirmation as being in debtor's best interest, so judge can reject as NOT being in debtor's best interest. )

Attorney attempts to get clever to allow reaffirmation agreement disaproved, by letting debtor go pro se as to reaffirmation. Court says attorney can't limit his represenation like that. Attorney left with Catch 22, and has to sign off on reaffirmation being in debtor's best interest, in order to file it -- so the judge can reject it.... What's an attorney to do??? And pity the poor confused client trying to make sense of it all.....

In re Schmidt

Bankr. W.D.Missouri - 397 B.R. 481 - 2008-11-17 - ,

Google ID#: 16702856082031098033
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

Coastal Federal Credit Union v Hardiman

E.D.N.C. - 398 BR 161 - 2008-10-28 - ,

Google ID#: 2118928967638828500
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Waller

Bankr.D.S.C. - 394 B.R. 111 - 2008-09-25 - ,

Google ID#: 16682034567324957977
(Type : )

In re Baker

D.Delaware - 390 B.R. 524 - 2008-06-10 - ,

Google ID#: 7567158202155091391
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

The Court finds that, under the Third Circuit's opinion in Price,[2] the Debtors' car loan "passed through" the bankruptcy case unaffected because the Debtors timely entered into a reaffirmation agreement and they are current with their payments. The Court further finds that there was no basis for repossession under Delaware law because the only default that Creditor could assert was based on an unenforceable ipso facto clause. Finally, because the repossession of the Debtors' vehicle was a violation of the discharge injunction, the Court will order Creditor to return the vehicle and will award compensatory damages to the Debtors.
Note: Affirmed at 400 B.R. 136 where court held creditor in violating automatic stay for reposessing vehicle after discharge.)

In re Caraballo

Bankr.D.Connecticut - 386 BR 398 - 2008-04-29 - ,

Google ID#: 1257903398197402351
(Type : )

In re Chim

Bankr.D.Maryland - 381 B.R. 191 - 2008-01-25 - ,

Google ID#: 11444900319920261417
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

Court lays out the step by step approach to a "back door ride through" via rejection of a reaffirmation agreement.

"Further, at the hearing, it became clear that one of the Debtor's primary reasons for entering into the Reaffirmation Agreement is her concern that, if the Court disapproved the Reaffirmation Agreement, the Lender could exercise the creditorrelief provisions of Sections 362(h), 521(a)(6) and 521(d) by, among other 193 things, declaring a default under the ipso facto[2] provision of her loan contract and repossessing the vehicle notwithstanding the fact that she remains current on the loan. The Court finds and concludes that the Debtor has complied with the requirements of Section 521(a)(2) by timely stating her intention to reaffirm the loan and by timely entering into the Reaffirmation Agreement with the Lender. Therefore, the provisions of Sections 362(h), 521(a)(6) and 521(d) do not apply, and the automatic stay remains in place with respect to the vehicle, the vehicle remains property of the estate, the Debtor is hot obligated to turn over possession of the vehicle, and the Lender may not exercise remedies as a result of default under the ipso facto provision under the loan agreement. Stated otherwise, where a debtor timely complies with Section 521(a)(2), the mere fact that the Court does not approve the reaffirmation agreement does not trigger the creditor relief provisions of Sections 362(h), 521(a)(6) or 521(d), Accordingly, the Debtor's concern that the Lender may invoke the creditor-relief provisions of Sections 362(h), 521(a)(6) or 521(d) if the Court disapproves the Reaffirmation Agreement is not warranted, and is not sufficient to overcome the presumption of undue hardship."

In re Moustafi

Bankr.D.Ariz - 371 B.R. 434 - 2007-06-04 - 7 , NA

Google ID#: 11049440995269440043
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

"The Debtor complied with the requirements of the Bankruptcy Code by timely filing her statement of intention and timely entering into a reaffirmation agreement with the credit union that holds a security interest in her car. That reaffirmation agreement will not, however, be approved because the Debtor's net monthly income is less than her expenses and because the car is worth less than what she owes on it. Despite the changes made to the Bankruptcy Code by the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA"), a debtor may still, under certain limited circumstances, retain a car even without a court approved reaffirmation agreement. This is such a case."

In re Stevens

Bankr.E.D.Virgina - 365 B.R. 610 - 2007-03-09 - ,

Google ID#: 702440142184771044
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Hussain

Bankr. E.D.Virginia - 364 B.R. 211 - 2007-03-05 - ,

Google ID#: 5122241988197630620
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Blakeley

Bankr.D.Utah - 363 BR 225 - 2007-01-17 - ,

Google ID#: 7572009884430292114
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Donald

Bankr.E.D.N.C. - 343 B.R. 524 - 2006-06-12 - 7 ,

Google ID#: 14394918521098274550
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

In re Quintero

Bankr. N.D. Cal. - 2006 WL 1351623 - 2006-05-17 - ,

Google ID#:
(Type C : "Backdoor Ride Through" permitted where debtor unsuccessfully seeks to reaffirm )

section 521(a)(6) does not require reaffirmation agreement to be approved

In re Rowe

D.Kan. - 342 B.R. 341 - 2006-05-10 - ,

Google ID#: 1071263325083500652
(Type B : Depends on state law issues re waver of right to repossess if current payments are accepted )

"ride through option not available after BAPCPA. No protection by stay. but "although Congress technically eliminated the "fourth option," as now there are consequences for failing to obtain a right of continued possession through redemption or reaffirmation, as applied to consumer transactions, in Kansas the creditor's remedy of expiration of the stay in many cases will be illusory, because the conditions to declare a default and obtain possession of the collateral will not be present under Kansas law when the 352*352 debtor remains current on the obligation and there is no other basis for finding significant impairment" (BUT See Hall v Ford Motor Credit co. LLC, (Kansas S.Ct 2011)

In re Price

3rd Cir - 370 B.R. 362 - 2004-02-03 - ,

Google ID#: 3822800023471030309
(Type : )

Main 3rd Circuit authority before BAPCPA.

In re Burr

1st Cir. - 160 F.3d 843 - 1998-11-25 - ,

Google ID#: 13859586450413514490
(Type : )

Main 1st Circuit authority before BAPCPA. - NOT allowing ride through.

In re Parker

9th Cir. - 139 F.3d 668 - 1998-03-17 - ,

Google ID#: 16962936717287705780
(Type : )

Main 9th Circuit authority before BAPCPA. - Allowing ride through.

In re Boodrow

2d Cir - 126 F.3d. 43 - 1997-09-12 - ,

Google ID#: 15036954109872325970
(Type : )

Main 2nd Circuit authority before BAPCPA. - Allowing ride through.

In re Johnson

5th Cir - 89 F.3d 249 - 1996-07-26 - ,

Google ID#: 55814360578555588
(Type : )

Main 5th Circuit authority before BAPCPA. - NOT allowing ride through.

In re Taylor

11th Cir. - 3 F.3d 1512 - 1993-10-13 - ,

Google ID#: 2665620218587266004
(Type : )

Main 11th Circuit authority before BAPCPA. - NOT allowing ride through.

In re Belanger

4th Cir. - 962 F.2d 345 - 1992-04-27 - ,

Google ID#: 13209982855477841840
(Type : )

Main 4th Circuit authority before BAPCPA. - Allowing ride through.

In re Edwards

7th Cir - 901 F.2d 1387 - 1990-04-27 - ,

Google ID#: 4937494646125081785
(Type : )

Main 7th Circuit authority before BAPCPA. - NOT allowing ride through.

Lowry Fed. Credit Union v. West

10th Cir - 882 F.2d 1543 - 1989-08-18 - ,

Google ID#: 2164148674756354577
(Type : )

Main 10th Circuit authority before BAPCPA. - Allowing ride through.

In re Bell

6th Cir - 700 F.2d 1053 - 1983-02-22 - ,

Google ID#: 4469311618811621767
(Type : )

Main 6th Circuit authority before BAPCPA. - NOT allowing ride through.

In re Bennet

Bankr. M.D.N.C. - - - ,

Google ID#:
(Type : )

A debtor can ride through on real property but disagreeing about the role of the court in approving a reaffirmation on a real property loan for an unrepresented debtor.

In re Law

1/19/2010 - 421 B.R. 735 - - ,

Google ID#: 7991550619724689971
(Type E : )

Pro se debtor's reaffirmation of mortgage was of no benefit so court delayed entry of discharge so she could rescind the agreement. because, persuant to In re Price, 370 F.2d 362 (3rd cir 2004). Because debt was secured by real property, court could not rescind the agreement, but debtor could, so court allowed 60 days for her to do so if she wished.

In re Pope

Bankr. E.D.Va - - - 2011 ,

Google ID#: 328449291181308593
(Type E : )

Court will not reaffirm mortgage because ride through is still valid for mortgages and reaffirmation would not be in debtor's best interest. Fact that lender is demanding reaffirmation to get a loan modification does not change result. Court will reaffirm the modification once it has done, but it will not reaffirm original debto as a condition of the loan modification.

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When you read a case, check to make sure that the case's decision applies to your local district. Do this by looking at which court has decided the case -- either the U.S. Supreme Court, a court of appeal (listed here in large type), or a district court (listed in small type).  Your local district court judge is not bound to follow the opinion of judges from other district courts, but often they look to these cases for advice. Your local district, however, is bound  to follow decisions in cases from it governing circuit court. You'll see fairly few Supreme Court case here, but those cases are also binding on all districts."

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This database does not contain every relevant case in every district on the topics covered; there are high priced services for that. This is free. It is offered to the public "as is" as an adjunct to the Nolo books, How to File Chapter 7 Bankruptcy, and Chapter 13 Bankruptcy: Keep Your Property and Repay Your Debts Over Time (10th Edition, 2010): which I co-author with attorney Stephen Elias.

This database is updated as time permits. Do not assume that it has the latest case in your district. We are still filling holes in the database -- and will always be. Use it as a place to start your reasearch, rather than the final answer to your question.

Some of these issues involve the discretion of the judge which can vary from judge to judge. So, even if you find a case just like yours where a judge went your way, as they say in the car biz, "your mileage may vary..."

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