You are a secured lender; debtors have indicated in their Statement of Intention that they will reaffirm; you've provided debtors' counsel with the information needed for the reaffirmation agreement; discharge is coming up and no reaffirmation agreement has been approved. What now, short of a $150 filing fee and attorney's fee for a stay motion? While not a common occurrence, as most debtors and their attorneys are anxious to get reaffirmation agreements in place, sometime it just doesn't get done.
Section 362(h) provides for termination of the automatic stay under three circumstances:
A. Debtor fails to file a timely statement of intention; the stay terminates with respect to personal property collateral and it is no longer estate property on the 31st day following the filing of the petition; 362(h)(1)(A)
B. Debtor files a statement of intention, but does not precisely indicate that debtor intends to redeem, reaffirm or surrender; the stay terminates with respect to personal property collateral and it is no longer estate property on the 31st day following the filing of the petition; 362(h)(1)(A)
C. Debtor files a proper statement of intention within 30 days of the petition date, but fails to take the specified action within 30 days after the date set for the first meeting of creditors. 362(h)(1)(B); the stay terminates with respect to personal property collateral and it is no longer estate property on the 31st day following the date set for the first meeting of creditors.
The language of the Code provides that the actions specified occur by operation of law, or "automatically." I've noticed, however, that some attorneys file motions for "comfort orders" confirming the termination of the automatic stay for 362(h) noncompliance, Several courts have held, however, that comfort orders are properly issuable only for stay terminations implicating 362(c), and not 362(h). In re Ermi, 2006 WL 2457144 (Bankr. N.D. Ohio 2006); In re Conley, ___ B.R. ___, 2006 WL 3420244 (Bankr.N.D. Ohio 2006); In re Dienberg, 348 B.R. 482 (Bankr. N.D. Ind. 2006). These cases strike me as consistent with the intent of the legislation, which seems directed at insuring prompt redemption, surrender or reaffirmation with respect to depreciable personal property such as cars, trucks, boats, motorcycles, etc.
The bottom line is that 362(h) noncompliance results in stay termination by operation of law. If you have any doubt or question about compliance, consult with counsel first. These provisions were clearly included in BAPCPA to encourage prompt surrender, redemption or reaffirmation, or prompt stay termination, so that secured creditors do not suffer unnecessary deterioration in their loan position. Use it!
