589 B.R. 253
E.D. Pa.2018Background
- Debtor Markel Steven Dunn filed Chapter 7 on June 12, 2017; his car (a Land Rover) was collateral for a loan from Toyota Motor Credit.
- Dunn filed a statement of intention saying he "will continue to make payments," which the bankruptcy court construed as an intent to retain and reaffirm the debt.
- The first meeting of creditors (341 meeting) was set for August 2, 2017.
- Toyota repossessed the Land Rover on August 18, 2017 (16 days after the 341 meeting).
- Bankruptcy Court granted debtor’s motion for sanctions, finding Toyota violated the automatic stay because the stay did not terminate under 11 U.S.C. § 362(h)(1) before August 18.
- District court affirmed: even if statutory interpretation disputes exist (conjunctive reading of § 362(h)(1) or elimination of ride-through), the operative termination date is 30 days after the first creditors’ meeting, so repossession was premature.
Issues
| Issue | Plaintiff's Argument (Dunn) | Defendant's Argument (Toyota) | Held |
|---|---|---|---|
| Whether Dunn timely and adequately stated intention under § 521(a)(2) | Statement "will continue to make payments" should be read as intent to retain and reaffirm | Statement is ambiguous and did not indicate election to redeem or reaffirm; thus stay terminated | Court upheld bankruptcy court: statement construed as intent to retain/reaffirm; even if ambiguous, result same because repossession was premature |
| Whether BAPCPA eliminated "ride-through" retention option | Not disputed by parties here; bankruptcy court treated ride-through as unavailable | Toyota argued ride-through eliminated so debtor had to choose reaffirm or redeem | Court noted circuits and E.D. Pa. holdings conclude ride-through eliminated; but decision rests on timing, so resolution of ride-through not required |
| When § 362(h)(1) terminates the automatic stay (timing) | Stay persists until 30 days after first creditors’ meeting; creditor must wait that long before repossession | Argues stay terminated 30 days after petition date or upon failure to state intent earlier, so creditor could repossess July 13, 2017 | Court adopted rule that termination occurs no earlier than 30 days after the first creditors’ meeting; repossession on Aug 18 violated stay |
| How to read conjunctive "and" in § 362(h)(1)(A)-(B) (failure to file vs. failure to perform) | Statute should be read to require both filing and performance deadlines before termination or, at least, to use 30‑day post‑341 meeting deadline | Argues conjunction means failure of either subsection can terminate stay earlier | Court favored reading requiring both actions or, alternatively, adopted later (30-day post-341) deadline as operative; either way creditor’s repossession was premature |
Key Cases Cited
- In re Price, 370 F.3d 362 (3d Cir.) (discusses pre-BAPCPA availability of ride-through)
- In re Jones, 591 F.3d 308 (4th Cir.) (concludes BAPCPA eliminated ride-through)
- In re Dumont, 581 F.3d 1104 (9th Cir.) (limits availability of ride-through)
- Ransom v. FIA Card Servs., N.A., 562 U.S. 61 (statutory interpretation begins with text of the Bankruptcy Code)
- Lamar, Archer & Cofrin, LLP v. Appling, 138 S. Ct. 1752 (2018) (bankruptcy aims to provide a debtor a "fresh start")