Neil Anthony Militante

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	No. 08-45077 TK
Chapter 7
NEIL ANTHONY MILITANTE,
Debtor.
____________________________/
MEMORANDUM OF DECISION RE RIGHT TO REDEEM
The 	issue 	addressed 	by 	this 	Memorandum 	is 	whether 	the 	above-
captioned 	debtor’s 	failure 	to 	file 	a 	timely 	Statement 	of 	Intention
with respect to his 2004 Nissan Pathfinder SUV (the “Car”) deprives
him 	of 	the 	right 	to 	redeem 	it 	by 	paying 	the 	secured 	creditor 	its
value pursuant to 11 U.S.C. § 722. 	The Court holds that it does not.
Based 	on 	the 	documentary 	evidence 	presented 	by 	the 	parties, 	the
parties having waived the right to an evidentiary hearing on value,
the Court concludes that the redemption value for the Car is $7,000
and that this amount must be paid in certified funds within ten days
from the date of entry of the order pursuant to this Memorandum.
SUMMARY OF FACTS
The above-captioned case was commenced on September 12, 2008.
Schedules of Assets and Liabilities (the “Schedules”) were filed on
Signed: February 06, 2009
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
February 06, 2009
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 08-45077 Doc# 27 Filed: 02/06/09 Entered: 02/06/09 10:56:24 Page 1 of 8

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
2
the 	same 	day, 	listing 	the 	Car 	as 	exempt 	and 	valuing 	it 	at 	$6,190.
The 	form 	entitled 	Chapter 	7 	Individual 	Debtor’s 	Statement 	of
Intention (the “SOI”) was filed with the Schedules. 	However, instead
of 	selecting 	one 	of 	the 	three 	prescribed 	intentions, 	i.e., 	to
surrender, 	to 	redeem, 	or 	to 	reaffirm, 	the 	form 	contained 	the
following statement: “Debtor will retain collateral and continue to
make regular payments.”
The meeting of creditors in the above-captioned case was held on
November 4, 2008. 	On November 6, 2008, the debtor filed a motion to
redeem the Car by paying the secured creditor San Francisco Federal
Credit Union (“Secured Creditor”) $6,190. 	Secured Creditor was given
20 	days 	to 	request 	a 	hearing, 	in 	the 	absence 	of 	which 	the 	debtor
would seek the relief requested by default.
On 	November 	12, 	2008, 	a 	motion 	was 	filed 	by 	Secured 	Creditor
opposing the relief requested and requesting a hearing. The Secured
Creditor’s motion asserted that the debtor should be required to pay
the 	Car’s 	replacement 	value 	to 	redeem 	it 	and 	asserted 	that 	the
replacement value of the Car was $14,045. 	The motion also asserted
that the debtor’s motion to redeem was “moot” because the automatic
stay 	with 	respect 	to 	the 	Car 	had 	terminated 	due 	to 	the 	debtor’s
failure to timely file a proper SOI. 	In support of this assertion,
the 	motion 	cited 	11 	U.S.C. 	§ 	521(a)(2), 	11 	U.S.C. 	§ 	362(h), 	and
Dumont v. Ford Motor Credit Co., 383 B.R. 481 (Bankr. 9th Cir. 2008).
On 	November 	19, 	2008, 	the 	debtor 	filed 	an 	amended 	motion 	to
redeem 	and 	noticed 	a 	hearing 	on 	the 	amended 	motion 	for 	January 	8,
2009. 	The amended motion reduced the amount the debtor proposed to
Case: 08-45077 Doc# 27 Filed: 02/06/09 Entered: 02/06/09 10:56:24 Page 2 of 8

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
1The Court is uncertain whether this means what the dealership
would pay for the Car or the price at which the dealership would
sell the Car. 	The Court will assume the latter since this is more
consistent with an auction price: i.e., retail rather than
wholesale.
3
pay 	to 	redeem 	the 	Car 	to 	$3,800. 	He 	filed 	an 	appraisal 	to 	support
this 	lower 	value. 	Although 	he 	also 	filed 	a 	supplemental 	brief, 	he
did not address Secured Creditor’s argument that the motion to redeem
was moot due to his failure to timely file a proper SOI.
In 	response 	to 	the 	debtor’s 	amended 	motion, 	on 	December 	19,
Secured Creditor filed a declaration by an auctioneer asserting that
the replacement value of the Car was $9,500 and that its likely cash
value 	if 	auctioned 	or 	“brought 	into” 	a 	dealership 	was 	$7,000. 1 	On
December 23, 2008, the debtor received his discharge. 	On January 7,
2009, the debtor filed a declaration reiterating his desire to redeem
the 	Car 	and 	his 	opinion 	that 	the 	value 	of 	the 	Car 	for 	redemption
purposes was $3,800.
The motion came before the above-captioned Court on January 8,
2009. 	At 	the 	conclusion 	of 	the 	hearing, 	the 	Court 	took 	the 	legal
issue under submission. 	The Court continued the hearing to February
5, 	2009, 	stating 	that 	if 	it 	concluded 	that 	the 	debtor 	had 	not 	lost
the 	right 	to 	redeem 	the 	issue 	of 	value 	would 	be 	determined 	at 	that
time.
DISCUSSION
Prior 	to 	the 	enactment 	of 	the 	Bankruptcy 	Abuse 	Prevention 	and
Consumer 	Protection 	Act 	of 	2005 	(“BAPCPA”), 	the 	controlling 	law 	in
this Circuit was that a bankruptcy debtor who was current on his car
Case: 08-45077 Doc# 27 Filed: 02/06/09 Entered: 02/06/09 10:56:24 Page 3 of 8

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
4
payments 	was 	not 	required 	to 	surrender 	the 	car 	to 	his 	secured
creditor even if he chose not to reaffirm the debt or to redeem the
Car by paying the secured creditor the value of the secured claim.
See In re Parker, 139 F.3d 668 (9th Cir. 1998). 	As noted in Parker,
there was a fairly even Circuit split on this issue. 	Id. at 672.
BAPCPA 	removed 	this 	option. 	Section 	521(a)(6) 	now 	provides
that:
(6) 	in a case under chapter 7 of this title in
which 	the 	debtor 	is 	an 	individual, 	[the 	debtor
may] not retain possession of personal property
as to which a creditor has an allowed claim for
the 	purchase 	price 	secured 	in 	whole 	or 	in 	part
by an interest in such personal property unless
the 	debtor, 	not 	later 	than 	45 	days 	after 	the
first meeting of creditors under section 341(a),
either–
(A) 	enters 	into 	an 	agreement 	with 	the
creditor pursuant to section 524(c) with respect
to the claim secured by such property; or
(B) redeems such property from the security
interest pursuant to section 722....
As 	recited 	above, 	the 	debtor 	filed 	a 	motion 	to 	redeem 	the 	Car 	on
November 6, 2008, two days after the meeting of creditors: i.e., well
within 	the 	required 	45 	days. 	But 	for 	the 	request 	for 	hearing,
disputing the proposed redemption value for the Car, the redemption
would 	presumably 	have 	been 	accomplished 	within 	the 	45 	days. 	Thus,
the Court concludes that 11 U.S.C. § 521(a)(2) does not preclude the
proposed redemption.
Secured 	Creditor 	cited 	11 	U.S.C. 	§ 	521(a)(2) 	and 	11 	U.S.C. 	§
362(h) 	in 	support 	of 	its 	contention 	that 	the 	debtor’s 	motion 	to
redeem was moot. 	Section 521(a)(2)(A) requires the debtor to file a
statement 	of 	intention 	within 	30 	days 	from 	the 	petition 	date.
Case: 08-45077 Doc# 27 Filed: 02/06/09 Entered: 02/06/09 10:56:24 Page 4 of 8

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
5
Section 	521(a)(2)(B) 	requires 	the 	debtor 	to 	perform 	his 	intention
within 30 days after the meeting of creditors. 	With an exception not
relevant here, 11 U.S.C. § 362(h) states that, if the debtor fails to
comply 	with 	these 	requirements, 	the 	automatic 	stay 	will 	terminate
with 	respect 	to 	the 	personal 	property 	in 	question 	and 	the 	property
will no longer be property of the estate.
There 	is 	no 	doubt 	that 	the 	debtor 	failed 	to 	comply 	with 	this
requirement. 	The SOI filed by the debtor did not state a permitted
intention. 	Therefore, the automatic stay has terminated with respect
to 	the 	Car 	and 	the 	Car 	is 	no 	longer 	property 	of 	the 	debtor’s
bankruptcy estate.
However, 	the 	debtor’s 	right 	to 	redeem 	personal 	property 	by
paying 	the 	value 	of 	the 	secured 	claim 	does 	not 	terminate 	when 	the
automatic 	stay 	terminates 	and 	does 	not 	require 	that 	the 	personal
property to be redeemed be property of the bankruptcy estate. 	To the
contrary, the right of redemption requires that the personal property
either be exempted from or abandoned by the estate. 	See 11 U.S.C. §
722. 	Moreover, 11 U.S.C. § 521(a)(2)(C) states that:
(C) nothing in subparagraphs (A) and (B) of this
paragraph [imposing deadlines for the debtor to
state 	his 	intention 	and 	to 	perform 	it,
respectively] shall alter the debtor’s...rights
with 	regard 	to 	such 	property 	under 	this 	title,
except as provided in section 362(h)....
Thus, the debtor retained his right to redeem the Car notwithstanding
his failure to comply with 11 U.S.C. § 521(a)(2)(A).
The case cited by Secured Creditor does not require a contrary
conclusion. 	In Dumont, a case governed by BAPCPA, the debtor, like
Case: 08-45077 Doc# 27 Filed: 02/06/09 Entered: 02/06/09 10:56:24 Page 5 of 8

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
6
the 	debtor 	in 	this 	case, 	filed 	a 	statement 	of 	intention 	indicating
that 	she 	would 	neither 	reaffirm 	the 	debt 	nor 	redeem 	the 	car, 	but
would 	simply 	remain 	current 	and 	retain 	possession 	of 	the 	car. 	The
security 	agreement 	stated 	that 	filing 	for 	bankruptcy 	constituted 	a
default: i.e., a so-called “ipso facto” clause. 	Dumont, 383 B.R. at
484.
After the case was closed, the secured creditor repossessed the
car. 	The debtor sought an order from the bankruptcy court, holding
the 	secured 	creditor 	in 	contempt 	for 	violating 	the 	automatic 	stay.
The court denied the application, concluding that the debtor was in
default of the “ipso facto” clause and that the creditor had a right
to 	repossess 	the 	car. 	See 	11 	U.S.C. 	§ 	521(d). 	The 	Bankruptcy
Appellate 	Panel 	affirmed. 	Dumont, 	383 	B.R. 	at 	489. 	The 	debtor’s
right to redeem was never discussed.
As recited above, initially the Debtor valued the Car (and thus
the 	secured 	claim) 	at 	$6,190. 	Later, 	he 	lowered 	that 	value 	to
$3,800. 	Secured 	Creditor 	initially 	set 	the 	redemption 	value 	at
$14,045. 	Later, Secured Creditor lowered the value to either $7,000
or 	$9,100. 	Based 	on 	the 	evidence 	presented, 	the 	Court 	finds 	the
$7,000 	value 	the 	most 	persuasive. 	This 	is 	the 	value 	that 	Secured
Creditor’s declarant opined the Car would sell for either at auction
or by a dealer. 	The redemption value must be paid in certified funds
within ten days of entry of the order pursuant to this Memorandum.
CONCLUSION
The 	Court 	concludes 	that 	the 	debtor’s 	failure 	to 	file 	a
statement 	of 	intention 	indicating 	his 	intention 	to 	either 	reaffirm
Case: 08-45077 Doc# 27 Filed: 02/06/09 Entered: 02/06/09 10:56:24 Page 6 of 8

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
7
the 	secured 	debt 	or 	redeem 	the 	Car 	within 	30 	days 	of 	the 	petition
date did not preclude him from opting to redeem the Car. 	It further
concludes that, because he filed his motion to redeem the Car within
45 days of the meeting of creditors, the debtor may retain possession
of 	the 	Car 	and 	the 	Car 	will 	be 	unencumbered 	by 	any 	secured 	debt
provided the debtor pays Secured Creditor $7,000 in certified funds
by 	no 	later 	than 	ten 	days 	after 	the 	entry 	of 	the 	order 	pursuant 	to
this Memorandum.
END OF DOCUMENT
Case: 08-45077 Doc# 27 Filed: 02/06/09 Entered: 02/06/09 10:56:24 Page 7 of 8

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
8
COURT SERVICE LIST
Karl-Fredric J. Seligman
Law Offices of Karl-Fredric Seligman
610 Georgia St.
Vallejo, CA 94590
Gary L. Fertig
Law Offices of Gary L. Fertig
875-A Island Drive, PMB #373
Alameda, CA 94502
Case: 08-45077 Doc# 27 Filed: 02/06/09 Entered: 02/06/09 10:56:24 Page 8 of 8