Pennington-Thurman v. Bank of America N.A. (In re Pennington-Thurman)

Pennington-Thurman v. Bank of America, N.A., No. 13-6023 (October 21, 2013)
The BAP affirmed the bankruptcy court's conclusion that the debtor's allegations against her mortgage lender were without merit and, therefore, it did not abuse its discretion in denying the debtor's motion to reopen her case to bring an adversary proceeding.
Procedural context:
The debtor appealed the bankruptcy court's denial of her motion to reopen her chapter 7 case so she may bring an adversary proceeding against her home mortgage lender who sought to foreclose on the debtor's home.
After the debtor's chapter 7 case was closed, her home mortgage lender, Bank of America ("BOA"), initiated foreclosure proceedings against the property. The debtor sought to reopen her case for the purpose of filing an adversary proceeding, alleging that the corresponding foreclosure notices were attempts to collect a discharged debt. The BAP noted that although personal liability to pay a debt does not continue following a discharge, the discharge does not operate to extinguish a creditor's in rem rights to foreclose against property in which it holds a lien. The BAP observed that the notices received by the debtor contained a declaration that they were provided "for informational purposes" related to the status of the foreclosure or options to cure the default. The communications also recognized that a bankruptcy case had been filed, a discharge entered, and stated that the notice was not an attempt to collect against the debtor. The BAP noted that before BOA could foreclose on the property, it was required under Missouri law to give notice to the debtor of her right to cure and this information could properly be included in the notices. The BAP thus agreed with the bankruptcy court's determination were not attempts to collect against the debtor personally and did not violate the discharge injunction. With respect to the debtor's motion to reopen, the BAP noted that it had previously addressed the issue, stating that such a motion is properly denied if the purpose is to bring a claim that has no merit. The BAP held that under this standard and based upon the record, the bankruptcy court did not abuse its discretion in denying the relief requested by the debtor.
Federman, Saldino, and Shodeen

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