In Re Neals
459 B.R. 612
Bankr. D.S.C.2011Background
- Debtors filed a joint Chapter 13 petition on Oct. 4, 2010.
- ASC asserted a secured claim on the residence at 114 Mulberry Hill, Sum merville, SC for $178,000 with scheduled value of $175,000.
- Debtors amended Schedule D and Plan; Plan provided direct payments to ASC and cure via the trustee.
- May 12, 2011, Plan confirmed.
- ASC amended its relief-from-stay motion (July 13, 2011) alleging default on post-petition payments and no equity; claimed total debt $205,757.78 and FMV $175,000; Debtors objected on standing, adequacy of protection, and necessity for reorganization; ASC presented original Note and Mortgage and related indorsements at hearing; Debtors questioned ownership of Note and signatures.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ASC is a party in interest with standing to seek relief | Neals | Neals | Yes; ASC is a party in interest and real party in interest. |
| Whether ASC possesses the right to enforce the Note | ASC has the right to enforce via possession and endorsements | Debtors questioned ownership of Note | ASC has the right to enforce as a nonholder in possession with rights of a holder. |
| Whether there is cause to lift the stay under § 362(d)(1) | Debtors defaulted on post-petition payments; lack of adequate protection | Debtors lack of payments due to confusion; equity cushion | Cause exists; stay lifted under § 362(d)(1). |
| Whether relief is also warranted under § 362(d)(2) | Property has no equity and is not necessary for reorganization | Not necessary to address if § 362(d)(1) supports relief | Court did not reach § 362(d)(2) since § 362(d)(1) relief granted. |
Key Cases Cited
- In re Woodberry, 383 B.R. 373 (Bankr.D.S.C.2008) (servicer standing to seek relief from stay; real party in interest)
- In re Nichols, 440 F.3d 850 (6th Cir.2006) (post-petition default requires substantial or excusable factors for relief)
- In re James River Assocs., 148 B.R. 790 (E.D.Va.1992) (equity cushion and ongoing default support relief from stay)
- Va. Elec. & Power Co. v. Westinghouse Elec. Corp., 485 F.2d 78 (4th Cir.1973) (real party in interest definition for enforcement rights)