Mmg I Pr Cr, LLC v. Ayala Vazquez, Carmen Gloria, KLCE202500312

MMG I PR CR, LLC filed a collection and mortgage foreclosure action against Carmen Gloria Ayala Vázquez due to loan default.
The case was administratively stayed because Ayala filed for bankruptcy under Chapter 13, triggering an automatic stay.
MWPR, LLC (the successor-in-interest) acquired the loan and moved to substitute itself as plaintiff and to continue proceedings after the bankruptcy petition was dismissed (August 2024).
The trial court denied MWPR’s motion to continue the proceedings, citing a six-month deadline from a prior administrative closure order.
MWPR sought reconsideration, arguing that the trial court lacked jurisdiction to impose such a deadline while the bankruptcy stay was in effect; the trial court again denied the motion.
MWPR filed a certiorari petition with the Court of Appeals, challenging the lower court’s decisions.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether trial court had jurisdiction to set a six-month deadline for reopening after bankruptcy stay	Jurisdiction was lost during bankruptcy; deadline invalid	Sought enforcement of six-month term in prior order	Trial court lacked jurisdiction to impose such a deadline during stay
Whether procedures should continue after bankruptcy dismissal	Automatic stay is lifted, proceedings should resume	Sought to keep proceedings closed	Proceedings must resume; denial was an abuse of discretion

212 DPR 194 (P.R. 2023) (certiorari’s scope and discretion to correct errors from lower courts)
204 DPR 374 (P.R. 2020) (automatic bankruptcy stay freezes all judicial proceedings against debtor)
178 DPR 476 (P.R. 2010) (state court jurisdiction ends once automatic bankruptcy stay applies; resumes upon stay’s lifting)
186 DPR 239 (P.R. 2012) (actions violating the automatic bankruptcy stay are null and void)
205 DPR 163 (P.R. 2020) (review standards for appellate corrections via certiorari)