Dennis R McDonald

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
WILMINGTON DIVISION
IN RE:
DENNIS R. MCDONALD,
DEBTOR.
CASE NO. 10-09196-8-JRL
CHAPTER 13
ORDER
This matter came before the court on the debtor’s motion to set aside dismissal of his
chapter 13 case. A hearing was held on May 18, 2011, in Wilmington, North Carolina.
The debtor filed a petition for relief under chapter 13 of the Bankruptcy Code on
November 5, 2010. The case was dismissed on March 10, 2011, for failure to make payments
under the plan. The debtor testified that he wanted to set aside the dismissal in lieu of filing a
new case in order to prevent foreclosure. However, it became apparent during testimony at the
hearing that the mortgage company conducted a foreclosure sale on April 25, 2011. While the
court is sympathetic to the debtor’s situation, it is well established in this district and under
North Carolina law that a sale of real property cannot be set aside after the ten-day upset bid
period has expired. See In re Barham, 193 B.R. 229, 232 (Bankr. E.D.N.C. 1996), In re Smith,
24 B.R. 19 (Bankr. W.D.N.C. 1982), Goad v. Chase Home Fin., LLC, 704 S.E.2d 1 (N.C. Ct.
SO ORDERED.
SIGNED this 01 day of June, 2011.
________________________________________
J. Rich Leonard
United States Bankruptcy Judge
____________________________________________________________
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2
App. 2010).
Generally, the stay will prevent a creditor from exercising control over estate property
and prevent a creditor from conducting a foreclosure sale. See 11 U.S.C. § 362. However, once a
case is dismissed, the stay is lifted and creditors are free to exercise their right to foreclose. In
North Carolina, once a foreclosure sale is conducted, a ten-day upset bid period commences
during which any person may bid on the real property. See N.C. Gen. Stat. § 45-21.27. The
debtor also retains an equitable right of redemption over the property during this time period. See
Anderson v. Moore, 63 S.E.2d 641, 644 (N.C. 1951). However, once this ten-day period has
expired, the purchaser’s rights become fixed and the property would no longer be included in a
subsequent bankruptcy estate or affected by the stay. In re Figured, 2009 Bankr. LEXIS 2580
(Bankr. E.D.N.C. 2009); In re Barham, 193 B.R. at 232. In this case, the stay was lifted when the
case was dismissed and the mortgage company properly conducted a foreclosure sale on April
25, 2011.
Based on the foregoing, the motion to set aside dismissal is DENIED.
“END OF DOCUMENT”
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