Prior to filing, a Debtor's residence was foreclosed upon by his homeowners association and sold via a non-judicial sale. The real property was purchased, a foreclosure deed was delivered, an order for eviction was obtained, and a Sheriff's eviction was scheduled. Prior to eviction, the Debtor filed for bankruptcy. The purchaser moved to lift the automatic stay pursuant to § 362(d)(1)-(2) to continue with eviction under state law, and the Debtor opposed the motion, arguing that as he had filed an adversary proceeding under § 548 that went to the heart of the purchaser's claimed ownership, that relief from stay should be denied. The Court found that legal title to the property had passed to the purchaser under North Carolina law, and that cause existed to modify the stay under subsection (d)(1). Further, the Court found that, as legal title had passed, the Debtor had no equity in the property, and that the Debtor made no argument as to the property's necessity for an effective reorganization such that the stay could be modified under subsection (d)(2). The Court also found that the pendency of the Debtor's adversary proceeding was no impediment to granting the purchaser's requested relief.
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Lena M. James
Court granted motion for waiver of financial management course requirement under section 727(a)(11) for a Chapter 7 who died prior to taking the course.
Decedent Chapter 7 Debtor's wife filed a motion, acting as personal representative of the probate estate, to avoid two judicial liens against the Debtor's real property that were not avoided during the bankruptcy. While courts have allowed lien avoidance nunc pro tunc by personal representatives, here the Debtor transferred the real property to entireties property prior to his death and discharge. Here, the property is now, and has always been, outside the probate estate. Thus, the wife lacks standing to reopen the case, as the property is not within the probate estate, and the judgment creditor has no claim against an asset of the estate or the estate itself.
The Chapter 13 Trustee filed a motion to distribute funds held in reserve to a first mortgage holder. The Trustee had been holding funds due to a mistaken satisfaction of the first mortgage lien. The motion was denied without prejudice.
Benjamin A. Kahn
The debtor filed a complaint seeking equitable review of a foreclosure sale conducted against the debtor's residence on the grounds that the foreclosure was inadequate and contained a material irregulairty. The foreclosure sale resulted in a coveyance of the debtor's residence to Bayview by credit bid. The debtor alleged that the foreclosure, initiated and completed by a trustee on behalf of Bayview when Bayview was the holder of the note and deed of trust, was improper because the trustee did not obtain an order from the state court finding that Bayview was the property holder of the note and deed of trust. Instead, the trustee relied upon a previous order issued to approve of the foreclosure at a time when Bayview's assignor was the holder of the note and deed of trust. The Court found that nothing in N.C. Gen. Stat. 45-21.1 et seq. prevented the assignment of the mortgage post-foreclosure hearing or requires the trustee or new holder of the note and deed of trust to re-initiate the foreclosure hearing upon receipt of the note. The debtor had notice of the original foreclosure initiated by the same trustee throughout the netire process, and the debtor's right to notice of foreclosure was not harmed by the subsequent transfer of the mortgage after the foreclosure hearing and before the foreclosure sale. The proposed amendment to the complaint was denied as it was futile.