11 U.S.C. §541; Property of the Estate; Contract for Deed
In re Beacham, 2006 Bankr. LEXIS 05-51927, Adv. No. 05-51927 (Bankr. M.D. Ga. February 17, 2006)(Hershner)
Debtor entered into a pre-petition Contract for Deed providing that upon completion of payments and satisfaction of their obligation, the seller would convey title to the real property to the debtor. The debtor, after placing a mobile home on the property, defaulted pre-petition and the seller sent a notice of termination and demanded possession of the real property. The debtor then filed a Chapter 13 petition and filed an adversary seeking to determined the validity, priority and extent of the seller’s lien.
The court held that the Contract for Deed, while rarely used in Georgia, provided the debtor rights which were not terminated pre-petition. The debtor had no abandoned the property and was not in adverse possession. See In re Verdi, 244 B.R. 494 (Bankr. M.D. Ga. 2000). Further, the court found unpersuasive the seller’s argument that its claim was secured by the debtor’s primary residence and thus could not be modified pursuant to §1322(b)(2), as the seller claimed an interest in only the real property and not the mobile home. Therefore, the rights of the seller could be modified. Summary judgment for the seller was denied