Franklin Delano Palmer, JR

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
IN RE:
FRANKLIN DELANO PALMER, JR.
Debtor.
Case No. 26-10798
Chapter 13
ORDER GRANTING IN PART MOTION FOR RELIEF
FROM CODEBTOR STAY
THIS MATTER comes before the Court pursuant to the Moton for Relief from Co-Debtor
Stay, 1 filed by TTCU Federal Credit Union (“Movant”); and the Objection, 2 filed by Franklin
Delano Palmer, Jr. (“Debtor”). 	The Court held a telephonic hearing on June 30, 2026 (the
“Hearing”), at which the parties presented legal argument. The following Order is entered pursuant
to Federal Rule of Bankruptcy Procedure 7052, which is made applicable to this contested matter
pursuant to Federal Rule of Bankruptcy Procedure 9014.
Jurisdiction
The Court has jurisdiction over this bankruptcy case pursuant to 28 U.S.C. § 1334(b). 3
Reference to the Court of the bankruptcy case is proper pursuant to 28 U.S.C. § 157(a). Matters
related to modification of the automatic stay are core proceedings as defined by 28 U.S.C.
§ 157(b)(2)(G).
1 ECF No. 12.
2 ECF No. 17.
3 Unless otherwise noted, all statutory references are to sections of the United States Bankruptcy
Code, 11 U.S.C. § 101 et seq.
Filed/Docketed
Jul 06, 2026
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Background
There do not appear to be any uncontested facts in this matter. Debtor filed a voluntary
case under Chapter 13 of the Bankruptcy Code on May 12, 2026 (the “Petition Date”). Debtor’s
wife, Vanessa Palmer (“Mrs. Palmer”), is not a debtor in this case. On or about May 4, 2022,
Debtor and Mrs. Palmer entered into a loan agreement with Movant (the “Loan Agreement”). Both
Debtor and Mrs. Palmer are liable under the Loan Agreement. The debt evidenced by the Loan
Agreement is a consumer debt. On March 26, 2026, the joint liability under the Loan Agreement
was reduced to judgment by the District Court for Tulsa County, Oklahoma, in a case naming
Debtor and Mrs. Palmer as “Defendants,” in the amount of $2,431.80 (the “Judgment”). 4 	The
Judgment states that “Each Defendant is responsible for 1/2 of the principal – $1,215.90.” 5 On the
Petition Date, Debtor filed a proposed Chapter 13 Plan, which makes no provision for payment of
the debt to Movant under either the Loan Agreement or the Judgment. 6 Movant has filed a proof
of claim in this case stating that its claim is fully unsecured. 7 According to Debtor, income
contributed from Mrs. Palmer will be “necessary for the successful completion of the Debtor’s
Chapter 13 Plan.” 8
Discussion
Relief from codebtor stay pursuant to § 1301(a) is granted
Section 1301 of the Bankruptcy Code provides:
(a) Except as provided in subsections (b) and (c) of this section, after the order for
relief under this chapter, a creditor may not act, or commence or continue any civil
action, to collect all or any part of a consumer debt of the debtor from any individual
that is liable on such debt with the debtor, or that secured such debt, unless--
4 ECF No. 12, at 4.
5 Id.
6 ECF No. 5.
7 ECF Claim No. 2-1, at 2 ¶ 9.
8 ECF No. 17, at 1.
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(1) such individual became liable on or secured such debt in the ordinary
course of such individual’s business; or
(2) the case is closed, dismissed, or converted to a case under chapter 7 or
11 of this title.
Under this section, a creditor who attempts to collect a consumer debt from a codebtor will be
found in violation of the stay imposed by § 1301(a), subject to certain exceptions enumerated in
subparagraphs (b) and (c). That stay, while euphemistically referred to as the “Codebtor Stay,” is
meant to protect the debtor, not the codebtor. 9 Its purpose is to protect Chapter 13 debtors from
the indirect pressure exerted by creditors through collection actions brought against codebtors who
are typically relatives or close friends of the Chapter 13 debtor. 10
Several exceptions to the Codebtor Stay are found in § 1301(c). That section provides, in
relevant part,
(c) On request of a party in interest and after notice and a hearing, the court shall
grant relief from the stay provided by subsection (a) of this section with respect
to a creditor, to the extent that--
(2) the plan filed by the debtor proposes not to pay such claim[.] 11
The directive of § 1301(c)(2) is mandatory. If the plan proposed by a Chapter 13 debtor fails to
pay a claim subject to the Codebtor Stay under § 1301(a), the Court must grant relief from that
stay to allow the creditor to pursue payment of its claim against the codebtor. 12 The Court does
not have any discretion to consider the financial plight of the codebtor in its analysis. 13 Nor may
9 In re Burkey, No. 09-12371, 2012 WL 5959991 (Bankr. N.D.N.Y. Nov. 28, 2012).
10 In re Deen, 260 B.R. 577, 580–81 (Bankr. S.D. Ga. 2000).
11 § 1301(c)(2) (emphasis added). Movant also suggests that § 1301(c)(3) applies in this case. That
section makes an exception to the Codebtor Stay where “such creditor’s interest would be
irreparably harmed by continuation of such stay.” 	Movant has provided no evidence that its
interests would be irreparably harmed by a continuation of the Codebtor Stay. Therefore, the
Court will not consider its arguments under that section.
12 § 1301(c); In re DiDomizio, 11 B.R. 357 (Bankr. D. Conn. 1981).
13 In re Grigsby, 13 B.R. 409, 411 (Bankr. S.D. Ohio 1981).
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it consider the source of payments the debtor plans to use to fund its plan. Debtor has cited no
authority to the contrary. Because Debtor has not proposed to pay Movant’s claim in his Chapter
13 plan, the Court is required to grant Movant relief from the Codebtor Stay to allow it to proceed
against Mrs. Palmer with respect to its claim.
Relief from automatic stay pursuant to § 362(a) is denied
Movant also asks for relief from the stay pursuant to § 362(a). Such relief may be granted
for cause, including a lack of adequate protection of an interest in property. 14 Upon filing a motion
under § 362(d), the initial burden of production to show grounds that compel the lifting of the stay
rests with the creditor. 15 Once the creditor has established grounds, the it has the burden of proof
that debtor lacks equity in the property. The burden for all other issues rests with the debtor. 16
To obtain relief under § 362(d)(1), Movant must demonstrate “cause” for granting relief.
While Debtor has the ultimate burden of persuasion on the issue of cause, Movant has the initial
burden of going forward before the burden will shift to Debtor. 17 In other words, Movant must
establish a prima facie case that cause exists under § 362(d)(1) before Debtor is required to present
any defensive evidence. 18 Movant suggests it lacks adequate protection of its interests, and that it
will “suffer irreparable harm” because “interest and expenses, as well as continuing monthly
14 § 362(d)(1).
15 In re DB Cap. Holdings, LLC, 454 B.R. 804, 816 (Bankr. D. Colo. 2011) (citing In re Anthem
Cmtys./RBG, LLC, 267 B.R. 867, 870-71 (Bankr. D. Colo. 2001)).
16 Id.; § 362(g).
17 In re Anthem Cmtys., 267 B.R. at 871 (citing In re Elmira Litho, Inc., 174 B.R. 892, 900 (Bankr.
S.D.N.Y. 1994)); In re Vankell, 311 B.R. 205, 215 (Bankr. E.D. Tenn. 2004) (“A creditor
seeking relief from the automatic stay under § 362(d)(1) ‘bears the burden of producing
evidence establishing a legally sufficient basis for such relief [.]’”) (citations omitted).
18 In re Elmira Litho, Inc., 174 B.R. at 902 (“Thus, every party seeking relief from the automatic
stay under § 362(d)(1) must carry the initial burden of showing that it is entitled to relief before
the debtor is obligated to go forward with its proof.”).
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assessments, will continue to accrue.” 19 	For the following reasons, the Court finds Movant has
not established any grounds for relief under § 362(d)(1) that would necessitate Debtor presenting
a defense under that section.
Among the grounds for cause under § 362(d)(1) is a lack of adequate protection of an
interest of a creditor in property. The purpose of providing adequate protection for a creditor is to
insure 	that 	the 	creditor 	receives 	the 	value 	for 	which 	it 	bargained 	prebankruptcy. 20 	The
determination of adequate protection is a factual question that is made on a case-by-case basis. 21
The Court must look to a creditor’s interest in property to define its entitlement to adequate
protection. 22 Courts have determined that the adequate protection provisions of § 361 protect only
secured creditors. 23 Likewise, a majority of courts have concluded that § 362(d)(1) addresses only
the rights of secured creditors. 24 A minority of courts have concluded that unsecured creditors may
be protected by the provisions of § 362(d)(1) in extraordinary circumstances. 25 While the Tenth
Circuit has not ruled on this issue, Movant has neither alleged that its claim is secured by property
of Debtor, or that extraordinary circumstances require relief under the statute. Therefore, Movant
has failed to establish that it is entitled to adequate protection for any interest in property. In the
absence of some proof that would support cause under § 362(d)(1), the Court cannot find that
Debtor has any burden to present a defense.
19 ECF No. 12, at 1.
20 In re O’Connor, 808 F.2d 1393, 1396 (10th Cir. 1987).
21 Id. at 1397.
22 In re Elmira Litho, Inc., 174 B.R. at 902.
23 In re Utah Aircraft All., 342 B.R. 327, 337–38 (10th Cir. BAP 2006) (citing In re Dairy Mart
Convenience Stores, Inc., 351 F.3d 86, 90 (2d Cir. 2003)).
24 Id.
25 Id.
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Conclusion
Movant is entitled to relief of the Codebtor Stay of § 1301(a) with respect to its claim
against Mrs. Palmer. Movant has not pled sufficient cause under § 362(d)(1) to require
modification or termination of the automatic stay of § 362(a) in this case. That stay will remain in
effect as to all creditors.
Accordingly,
IT IS THEREFORE ORDERED that the Motion for Relief from Co-Debtor Stay, at ECF
No. 12, filed by TTCU Federal Credit Union, is hereby GRANTED IN PART AND DENIED IN
PART.
IT IS FURTHER ORDERED that the stay provided in this case pursuant to § 1301(a) is
terminated with respect to the claim of TTCU Federal Credit Union.
IT IS FURTHER ORDERED that the stay provided in this case pursuant to § 362(a)
remains in full force and effect with respect to all creditors.
Dated this 6th day of July, 2026.
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