When a bankruptcy court grants a mortgage creditor relief from the automatic stay, should that order carry the weight creditors have long expected? In this article published in ALFN’s ANGLE magazine (July 2022), ALAW Partner Jeffrey S. Fraser explores the implications of In re Tedesco, a 2020 ruling from the Eastern District of Kentucky that confirmed a Chapter 13 plan over a mortgage creditor’s timely objection, even after the court had already lifted the stay on the same property.
Fraser walks through the tension at the heart of the decision: how a creditor can be both permitted to pursue state-court remedies and required to accept payments under a confirmed plan. He distinguishes Tedesco from cases where the stay expired by operation of law, examines the res judicata effect of confirmed plans, and makes the case that §1325(a) implicitly requires the presence of the automatic stay over property included in a debtor’s plan.
For mortgage servicers and their counsel, Tedesco raises important questions about the reliability of a once-routine bankruptcy procedure and the steps creditors should take to protect their interests.
Read the full article in ALFN ANGLE, Vol. 9, Issue 3 →