Court Reopened Chapter 7 Case in Order to Compel Debtors to Surrender Home, and to Order Debtors to Stop Fighting Foreclosure Action

Court Reopened Chapter 7 Case in Order to Compel Debtors to Surrender Home, and to Order Debtors to Stop Fighting Foreclosure Action

This case came before the Court for a trial on the Motion by U.S. Bank to Reopen Chapter
7 Case, to Compel Surrender, and for Sanctions. Debtors opposed the Motion at the hearing but
filed no written opposition.

In 2006, the Debtors executed a promissory note and mortgage to purchase a house.  Debtors filed this Chapter 7 bankruptcy case in 2010.

In their statement of intentions, the Debtors elected to surrender the Property. U.S. Bank’s
predecessor in interest moved for, and the Court granted, stay relief on the Property. Debtors then received their Chapter 7 discharge. The parties agreed that the Debtors were not current on the mortgage payments at the time of the bankruptcy and have not made a mortgage payment since March 2010. Due to nonpayment, a foreclosure complaint was filed in 2014. Debtors asserted several affirmative defenses in the foreclosure action.

Debtors argue that the affirmative defenses in the foreclosure action relate to postdischarge
defenses and post-petition actions of the creditors. U.S. Bank argues the Debtors may
not oppose foreclosure because they surrendered the property during the bankruptcy case. U.S. Bank now seeks to reopen this case to compel the Debtors to perform their stated intentions to surrender the home.

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