From an article
"Putting the Brakes on Ride-Through in the Ninth Circuit"
So that sounds to me like if someone does not choose to reaffirm then it is removed from the estate, and not even discharged. So in a case like this wouldn't ford be able to revoke the contract and then short sale even AFTER bankruptcy?
"Putting the Brakes on Ride-Through in the Ninth Circuit"
According to Ford, section 521(a)(2)(c) now subjects the debtor in chapter 7 proceedings to a new requirement under 362(h)(1)(A), which requires every individual chapter 7 debtor not only to file a statement of intentions regarding secured property, but also to indicate the debtor’s intent to either “surrender, redeem, reaffirm, or assume [the] unexpired lease[s]” of property.[18] Failure to indicate such intent as per the specifically enumerated options in 362(h)(1)(A) removes the property from the estate.[19] Ford argued that according to section 521(d), nothing in the Code limits the rights of the creditor to pursue state law contract rights when the property is not part of the estate.[20] Ford claimed that because Dumont failed to indicate her desire to perform one of the specified options listed under 362(h)(1)(A), the automobile was removed from the estate and therefore Ford could pursue its right afforded by the ipso facto clause to terminate the agreement under state law.
The bankruptcy court and the Bankruptcy Appellate Panel agreed with Ford.[21] The Ninth Circuit Court of Appeals affirmed, expressly reversing In re Parker.[22] The Court of Appeals made plain that debtors in chapter 7 proceedings are no longer able to maintain secured property and avoid liability for pre-petition debt when the debtor makes no effort to reaffirm the debt pursuant to the revised sections 362 and 521. Ride-through is no longer an option and so these debtors who would otherwise be in default under state contract law must choose from the options expressly listed under 362(h)(1)(A) if they wish to maintain possession of their secured property in bankruptcy.
The bankruptcy court and the Bankruptcy Appellate Panel agreed with Ford.[21] The Ninth Circuit Court of Appeals affirmed, expressly reversing In re Parker.[22] The Court of Appeals made plain that debtors in chapter 7 proceedings are no longer able to maintain secured property and avoid liability for pre-petition debt when the debtor makes no effort to reaffirm the debt pursuant to the revised sections 362 and 521. Ride-through is no longer an option and so these debtors who would otherwise be in default under state contract law must choose from the options expressly listed under 362(h)(1)(A) if they wish to maintain possession of their secured property in bankruptcy.
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