Alakozai v. citizens Equity First Credit Union (In re Alakozai)

Summarized by Joel Newell , Ballard Spahr, LLP
12 years 4 months ago

Citation:

BAP NC-12-1470 PaDJu

Tag(s):

Ruling:

The 9th Cir. BAP agreed with the Bankruptcy Court and held that an in rem order entered in a prior bankruptcy case was effective as to the real property previously owned by the Debtor / Appellant, and the automatic stay did not prohibit the foreclosure, even though it occurred during the pendency of a later bankruptcy case filed by the Appellant.

Procedural context:

In the sixth bankruptcy case the Debtor had filed between 2008 and 2012, the Debtor appealed the Bankruptcy Court's ruling that the secured creditor's prior "in rem" stay relief order did not apply to the secured creditor's pending unlawful detainer action pending before the State Court.

Facts:

in 2005 Appellant's husband executed a promissory note secured by a deed of trust on real property located in California ("Property"). Even though Appellant's name did not appear on the deed of trust, community property funds were utilized to make payments on the promissory note. Therefore, Appellant acquired a community interest in the Property. Appellant and Appellant's spouse defaulted on the promissory note on or about 2008. Between 2008 and 2012 either the Appellant or Appellant's Spouse filed bankruptcy to prevent the secured creditor from conducting a trustee sale. The second bankruptcy filed was a jointly filed Chapter 7 wherein a discharge was entered. in the fourth bankruptcy, Appellant's spouse filed a Chapter 13. Secured creditor obtained an "in rem" stay relief order that was binding on the Appellant's spouse and the Property for 180 days. After the secured creditor conducted its trustee sale, it commenced a unlawful detainer action against Appellant and her spouse. Secured creditor sought stay relief in Appellant's bankruptcy to continue with the unlawful detainer action as to the Property. The Bankruptcy Court granted secured creditors Motion and Debtor appealed.

Judge(s):

Honorable Pappas, Dunn, and Jury

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