Summary:
Sixteen months after filing Chapter 13, the Debtor converted to Chapter 7. Capital One, the lienholder against the Debtor’s vehicle, sent the Debtor a reaffirmation agreement, which would have required immediate and full payment of the $16,149.46 balance. Debtor’s counsel requested Capital One negotiate payment terms, but received no response. No reaffirmation on the original contract terms was offered. Without seeking relief from the automatic stay, Capital One then repossessed the vehicle and the Debtor brought an action for damages and return of the vehicle.
11 U.S.C. § 521(a)(2)(A) requires that, within 30 days after the petition date, the debtor shall file a statement of intention with regard to debts secured by property of the estate indicating whether the debtor will surrender or retain the property, and if retaining property, whether the debtor intends to redeem such property or to reaffirm debts secured by such property. The Debtor did perform this obligation within 30 days of conversion.
11 U.S.C. § 521(a)(2)(B), however, further mandates that, within 30 days after the first date set for the § 341 meeting of creditors, the debtor shall perform her intention with respect to such property. The Debtor asserted she had complied by stating her intention to reaffirm and expressing interest in negotiating payment terms.
The Court disagreed. While actually timely signing and returning a reaffirmation agreement on its original terms constitutes the performance of an intention, See In re Hardiman, 398 B.R. 161, 187-88 (E.D.N.C. 2008), and In re Hinson, 352 B.R. 48, 50 (Bankr. E.D.N.C. 2006), merely by stating her intention to reaffirm and expressing interest in negotiating payment terms was not sufficient to constitute performance.
The exception to the termination of the automatic stay set forth in 11 U.S.C. § § 362(h)(1)(B) can a debtor with safe harbor, but only if a debtor specifies the intention to reaffirm on the original contract terms and the creditor refuses to agree. Which in this case, the Debtor “conspicuously” did not do. (Likely because the Debtor was 19 months delinquent on the contract.)
For a copy of the opinion, please see:
Beard- Attempted Negotiation of Reaffirmation terms is not Performance of Intention to Reaffirm under 11 U.S.C. § 521(a)(2)(B).pdf
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