David Failla v. Citibank, N.A., 838 F.3d 1170

David and Donna Failla defaulted on a mortgage for their Boca Raton house; Citibank filed a Florida foreclosure action.
The Faillas filed Chapter 7 bankruptcy in 2011, admitted the mortgage was valid and underwater, and filed a statement of intention under 11 U.S.C. § 521(a)(2) to surrender the house.
The trustee abandoned the property under 11 U.S.C. § 554, and the Faillas remained in possession while continuing to oppose the state foreclosure.
Citibank moved in bankruptcy court to compel surrender, arguing the Faillas’ state-court opposition contradicted their § 521(a)(2) statement.
The bankruptcy court ordered the Faillas to cease opposing the foreclosure (threatening vacatur of discharge for noncompliance); the district court affirmed.
The Eleventh Circuit affirmed, holding that § 521(a)(2) requires relinquishment of possessory rights and permits the bankruptcy court to enjoin debtor opposition in state foreclosure proceedings.

Issue	Failla's Argument	Citibank's Argument	Held
Whether a debtor who files a § 521(a)(2) statement to surrender may continue to oppose a creditor’s state-court foreclosure	Surrender is a procedural/notice requirement and does not strip debtors of the right to contest foreclosure	Surrender means relinquishment of rights (including possession); debtors who surrender cannot oppose foreclosure	Debtors who declare surrender must relinquish possessory rights and may not contest the creditor’s foreclosure
Whether the bankruptcy court’s remedy for breach of § 521(a)(2) is limited to lifting the automatic stay	Only stay relief was appropriate; other injunctive orders in state court exceed bankruptcy power	Bankruptcy court has broader authority under § 105(a) to enforce § 521(a)(2) and enjoin debtor action that abuses the bankruptcy process	Bankruptcy court may issue orders (beyond merely lifting stay) to compel compliance and prevent abuse, including ordering debtors to stop opposing foreclosure

In re Taylor, 3 F.3d 1512 (11th Cir.) (interpreting § 521(a)(2) statement options and obligation to perform declared intent)
In re White, 487 F.3d 199 (4th Cir.) (surrender includes relinquishment of possessory rights even without immediate physical delivery)
In re Pratt, 462 F.3d 14 (1st Cir.) (surrender construed as ceding possessory rights to secured creditor)
Assocs. Commercial Corp. v. Rash, 520 U.S. 953 (1997) (discussing creditor’s post-bankruptcy rights in collateral)
Marrama v. Citizens Bank of Mass., 549 U.S. 365 (2007) (bankruptcy courts’ authority under § 105 to prevent abuse of process)