In re Moustafi (click for opinion), Ch. 7 Case No. 4-07-00407-EWH, 2007 Bankr. LEXIS 1925 (Bankr. D. Ariz. June 4, 2007.  The Chapter 7 debtor stated her intention to reaffirm the debt secured by her vehicle. She timely executed the reaffirmation agreement pursuant to §521, and it was accepted by the lender.  However, the court found that debtor’s income could not support the payments and declined to approve the reaffirmation.  The question thus arose as to whether the lender could repossess the vehicle.

If disapproval of the Reaffirmation Agreement means that the Debtor has failed to perform her intention as required by § 521(a)(2)(B), then § 521(d) would apply, permitting Vantage to enforce its ipso facto clause. Post-discharge, Vantage would be able to repossess the Nissan because the Debtor’s bankruptcy filing is an event of default under the Vantage Security Agreement.

In In re Husain, 2007 Bankr. LEXIS 768, 2007 WL 709302 (Bankr. E.D. Va. March 5, 2007), the court addressed this issue and found:

The Debtors’ timely act of entering into mutually satisfactory reaffirmation Agreements with their creditors must be viewed as sufficient to satisfy the performance standards of § 521(a). Those performance requirements should not be read as a mandate for debtors to entirely consummate their stated intentions. . . . Section 521(a) of the Bankruptcy Code merely requires the debtor to "take steps to act on an intention to either retain or surrender.". . . . The Debtors in the case at bar did everything in their capacity to perform.

2007 Bankr. LEXIS 768, 2007 WL 709302, at *5 (citations omitted in text). This court agrees. The consequences of § 362(h)(1) and § 521(d) — lifting the automatic stay and making ipso facto default clauses enforceable — are only caused by a debtor’s failure to timely file a statement of intention and/or to timely enter into a reaffirmation agreement, "not by the court’s disapproval of the agreement or by its determination that the agreement is unenforceable." Id.; see also In re Blakeley, 2007 Bankr. LEXIS 538, 2007 WL 674712, at *6 (Bankr. D. Utah Feb. 21, 2007) ("It is not necessary for the Court to approve the reaffirmation agreement in order for the Debtor to comply with § 521 or § 362(h).").




In this case, the Debtor filed her Statement of Intention within 30 days of the petition date — checking the box indicating she wished to reaffirm the Vantage debt. By filing the Statement within 30 days of her petition date, the Debtor complied with the requirements of §§ 521(a)(2)(A) and 362(h)(1)(A). The Debtor’s first meeting of creditors was held on May 8, 2007. By executing and filing the Reaffirmation Agreement with the court prior to that meeting, the Debtor complied with the requirements of §§ 521(a)(2)(B) and 362(h)(1)(B). Accordingly, the Nissan remains property of the estate and the automatic stay remains in effect until the Debtor receives her discharge. See 11 U.S.C. § 362(c)(2)(C).

Once the discharge is granted, because the Debtor has complied with § 521(a)(2), Vantage may not repossess the Nissan as long as the Debtor is current on her payments and insurance obligations. n10 See Parker, 139 F.3d at 673; see also Blakeley, 2007 Bankr. LEXIS 538, 2007 WL 674712, at *6 (BAPCPA has not entirely eliminated the possibility of ride-through; "where a debtor timely complies with all requirements under §§ 521 and 362(h), the debtor can ‘ride through’ the bankruptcy notwithstanding a bankruptcy court’s refusal to approve the reaffirmation agreement.").

n10 The result would be the same if § 521(a)(6) applied to the Debtor. Section 521(a)(6)(A) requires that a debtor enter into a reaffirmation agreement — not that the reaffirmation agreement be approved by the court.


BAPCPA added the following to the end of subparagraph (C): "except as provided under 362(h)." However, as explained earlier in this decision, § 362(h) does not apply to debtors, like Ms. Moustafi, who have timely complied with the requirements of §§ 521(a)(2)(A) and (B). Consequently, when § 362(h) does not apply, § 521(a)(2)(C) has the same effect as it did under Parker: "The debtor’s other options remain available, as unambiguously stated in § 521[a](2)(C). . . ." 139 F.3d at 673. There is no reason for this court to reach beyond the plain language of the statute to implement some presumed Congressional intent to completely eliminate ride-through when the unambiguous language of §§ 521(a)(2) and (a)(6) limit BAPCPA’s anti-ride-through provision to debtors who fall within the purview of §§ 362(h) and 521(d).