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In re Eric James Borm

Case No. 13-6065 (C.A. 8, Apr. 2, 2014)

CitiMortgage, Inc. (“the Creditor”) appeals from a denial by the bankruptcy court of its motion for relief from the automatic stay in the Chapter 13 bankruptcy case of Eric James Borm and Valorie Dawn Pearson (the “Debtors”). We have jurisdiction over this appeal from the final order of the bankruptcy court. See 28 U.S.C. § 158(b). We reverse.

ISSUE



The issue in this case is whether the bankruptcy court abused its discretion when it denied the Creditor’s motion for relief from the stay.

BACKGROUND



On May 6, 2009, the Debtors filed a petition for relief under Chapter 13 of Title 11 of the United States Code (the “Bankruptcy Code”). A few months later, the Debtors filed their modified Chapter 13 plan, which was confirmed in September, 2009. The Debtors are the owners of real property that is their homestead. It is undisputed that the Debtors executed a promissory note and a mortgage on the property that is held by the Creditor. With respect to the Creditor, the confirmed plan states:

5. CLAIMS NOT IN DEFAULT



Payment on the following claims are current and the debtor will pay the payments that come due after the date of the petition was filed directly to the creditors. The creditors will retain liens, if any.

Creditor Description of Claim

CitiMortgage First mortgage on Homestead


In 2013, the Creditor filed a motion for relief from the automatic stay, together with supporting documents, seeking relief pursuant to 11 U.S.C. § 362(d)(1). The Debtors did not file a written response to the motion for relief from the stay.
 

 

Judge(s): Barry S. Schermer
Jurisdiction: U.S. Court of Appeals, Eighth Circuit
Related Categories: Finance / Banking
 
Circuit Court Judge(s)
Arthur Federman
Charles Nail, Jr.
Barry Schermer

 

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____________ ____________ undisputed that the debtors executed a promissory note and a mortgage on the bankruptcy court recognized that the debtors were approximately $11,000 behind in creditor during that time. the creditor had applied the nine payments to earlier the bankruptcycourtabused its discretion by denying the creditor’s request for ___________________________ creditor description of claim motion, the debtors had missed fourteen of their postpetition mortgage payments (and the time fromoctober 1, 2012 through november 1, 2013, the debtors only made nine fifteen such payments as of the date of the hearing). however, as support for its denial to be equity in the property. although the debtors did make some payments during no. 13-6065 ___________________________ ------------------------------ automatic stay for cause under 11 u.s.c. § 362(d).”) (citing production credit ass’n agreed to make their mortgage payments to the creditor outside of their plan. the issue the bankruptcy court looked to the fact that the debtors made some payments during oldest months in which payment was due), when, according to the court, the creditor at the hearing, the court recognized that the debtors were behind on their the issue in this case is whether the bankruptcy court abused its discretion plan wasconfirmed,but thedebtors repeatedlyfailed to make required payments. the jurisdiction over this appeal from the final order of the bankruptcy court. see 28 (existence of an equity cushion did not mean a lack of cause under § 362(d)(1) where the creditor did not dispute the equity in the property.1 local form 4001-1filed with the motion by the creditor, that, as of the date of the submitted: march 26, 2014 cir. 2011) (citation omitted). “an abuse of discretion will be found if the court’s of the creditor’s stay relief motion, the court stated that the debtors made nine llldebtors papers.” the creditor represented at the hearing, as supported by the affidavit and of the midlands v. wieseler (in re wieseler), 934 f.2d 965, 967 (8th cir. 1991)). reported that no payments had been made. the court also stated that there appeared when it denied the creditor’s motion for relief from the stay. denying the creditor’s stay relief motion on the record at the hearing, and entered a 2012 through november 1, 2013 when, in fact, they had made nine payments to the such a significant number and amount of payments. see wieseler, 934 f.2d at 968 the court held a hearing on the creditor’s stay relief motion. debtor valorie stay relief. the relevant facts are simple. the debtors proposed a plan in which they idea how far behind [i am]. i didn’t know i was $11,000 behind until i saw these 2 behind in their payments. llllllllllllllllllllldebtors - appellees plan (and therefore, the relevant loan documents), by being significantly behind in 5. claims not in default equity in the property was irrelevant in light of the fact that the debtors had missed computer servs., inc. (in re crossroads ford, inc.), 449 b.r. 366, 367 (b.a.p. 8th supports the bankruptcy court’s decision to grant [the creditor] relief from the states: their payments to the creditor. see reinbold v. dewey cnty. bank, 942 f.2d 1304, 11 u.s.c. § 362(d)(1). was equity in the property.1 citimortgage first mortgage on homestead written order following the hearing. protection of an interest in property of such party in interest. for the eighth circuit on may 6, 2009, the debtors filed a petition for relief under chapter 13 of title judgment was based on clearly erroneous factual findings or erroneous legal the period october 1, 2012 through november 1, 2013 (which were applied to the their postpetition payments. and, ms. pearson acknowledged that the debtors were not contest the creditor’s representation that the debtors missed fifteen of their code § 362(d). section 362(d)(1) provides that: u.s.c. § 158(b). we reverse. dawn pearson appeared in person at the hearing. the court announced its ruling discussion of such funds. debtors did not file a written response to the motion for relief from the stay. 3 payments). court of its motion for relief from the automatic stay in the chapter 13 bankruptcy required mortgage payments in the approximate amount of $11,000. ms. pearson rather than focusing on the debtors’ failure to make the necessary payments, case of eric james borm and valorie dawn pearson (the “debtors”). we have with supporting documents, seeking relief pursuant to 11 u.s.c. § 362(d)(1). the required postpetition payments as of the date of the hearing. likewise, the debtors’ to the creditors. the creditors will retain liens, if any. we anticipate that the creditor will modify its pleadings going forward2 citimortgage, inc. (“the creditor”) appeals from a denial by the bankruptcy conditioning such stay - (1) for cause, including the lack of adequate before federman, chief judge, schermer and nail, bankruptcy judges. background from the automatic stay to the creditor. remand this matter to the bankruptcy court to enter an appropriate order granting relief postpetition months for which payment remained outstanding.2 11 of the united states code (the “bankruptcy code”). a few months later, the [t]he court shall grant relief from the stay provided under subsection (a) the undisputed facts show that cause existed to grant the creditor’s request for schermer, bankruptcy judge ____________ acknowledged the debtors were behind in their payments when she stated “i have no conclusions.” id. at 367 (citation omitted). property that is held by the creditor. with respect to the creditor, the confirmed plan for the reasons stated, we reverse the decision of the bankruptcy court, and the debtor failed to honor the requirements of a stipulation by failing to make required citimortgage, inc. lllllllllllllllllllllcreditor - appellant stay relief in light of the debtors’ failure to comply with their obligations under their debtors filed their modified chapter 13 plan, which was confirmed in september, payments for the october 1, 2012 through november 1, 2013 period, and that there in re: eric james borm; valorie dawn pearson united states bankruptcy appellate panel appeal from united states bankruptcy court 2009. the debtors are the owners of real property that is their homestead. it is relief from the automatic stay in bankruptcy is governed by bankruptcy from the automatic stay for an abuse of discretion. crossroads ford, inc. v. dealer conclusion 5 to avoid any confusion regarding the creditor’s receipt of funds, and the application 4 payments that come due after the date of the petition was filed directly ____________ the court was also concerned by what it perceived to be a misrepresentation in eric james borm; valorie dawn pearson filed: april 2, 2014 the creditor’s motion that the debtors made no payments for the period october 1, for the district of minnesota - minneapolis of this section, such as by terminating, annulling, modifying, or we review the bankruptcy court’s decision regarding whether to grant relief in 2013, the creditor filed a motion for relief from the automatic stay, together payments during that time, and they did not make five payments. and, the debtors do v. payment on the following claims are current and the debtor will pay the standard of review 1306-07 (8th cir. 1991) (the debtor’s “failure to comply with his chapter 12 plan


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