Debtors sought authority to quitclaim their previous residence in Florida to the SBA, which held a mortgage against the property but had declined to foreclose.
The bankruptcy court first held that 11 U.S.C. § 1325(a), while property may be “surrendered”, the Bankruptcy Code does not define that term but it has “has been described as the relinquishment of all rights in property, including the right to possess the collateral.” IRS v. White (In re White), 487 F.3d 199, 205 (4th Cir. 2007); 8 Collier on Bankruptcy ¶ 1325.06 (Alan N. Resnick & Henry J. Sommer eds., 15th ed. 2005). This relinquishment of rights by the debtor does not, however have a “corresponding requirement that the lender to do anything with the property” and that a creditor has the right to control its remedies.… Read More