Ashely M. Chan, United States Bankruptcy Judge.
Under Pennsylvania law, when property is sold under a tax sale, the prior owner
Prior to filing for bankruptcy, the Debtor and her family resided at 3848 N. Smedley Street in Philadelphia, Pennsylvania ("Property"). Stipulation ¶ 1, ECF No. 39. She and her brother, Ronnie L. Pittman, co-owned the Property as tenants in common. Id. Over a four year period, unpaid real estate taxes accrued on the Property totaling $4,235.67 ("Tax Delinquency"). Id. ¶ 8.
Based upon the Tax Delinquency, the City of Philadelphia ("City") sought and obtained an order to sell the Property at a tax sale. Id. ¶¶ 9-10. On October 21, 2013, Sahil S. Singhal ("Purchaser") purchased the Property at a tax sale for $13,100.00, thereby satisfying the Tax Delinquency in full.
Under applicable state law, the Debtor had nine months from December 30, 2013, the date that the deed was acknowledged, to exercise her right to redeem the Property. City Mem. Supp. Obj. to Second Am. Plan ("City's Br.") 3, ECF No. 44. Prior to the expiration of the redemption period, on September 23, 2014 ("Petition Date"), she filed a voluntary Chapter 13 bankruptcy petition. The Debtor also filed a Chapter 13 plan on the Petition Date in which she proposed to pay the Purchaser $13,100.00, the amount that he paid to purchase the Property in the tax sale. Ch. 13 Plan ¶ 2.B(a)(i), ECF No. 8.
On February 10, 2015, the Purchaser filed a secured proof of claim in the amount of $17,709.47 ("Claim") in connection with his purchase of the Property at the tax sale. On February 23, 2015, the Purchaser amended his Claim and listed his secured claim as $16,908.11 ("Amended Claim").
On February 23, 2015, the City filed an objection to the plan based upon, inter alia, the Debtor's failure to pay the full amount of the Amended Claim filed by the Purchaser in the amount of $16,908.11. Obj. to Proposed Ch. 13 Plan ¶¶ 19-21, ECF No. 24. The Debtor subsequently filed a first amended Chapter 13 plan and then a second amended Chapter 13 plan ("Plan"), both of which proposed to pay the Purchaser the full amount of his Amended
On April 26, 2015, the City filed an objection to the Plan arguing that: (1) the Debtor did not properly file a motion under Federal Rule of Bankruptcy Procedure 6008 to redeem the Property; (2) the Purchaser does not hold a "claim," as defined under § 101(5), which can be modified under § 1322(b)(2); and (3) the redemption amount cannot be paid to the Purchaser in installments under applicable state law. Obj. to Proposed Second Am. Ch. 13 Plan ¶¶ 14, 22, ECF No. 37.
On June 30, 2015, the Court held a confirmation hearing on the Plan. Although the Purchaser did not file an objection to the Plan, he attended the confirmation hearing and orally lodged his objection. Ultimately, the Court adjourned the confirmation hearing and ordered the parties to file briefs addressing the objections. After the parties filed their briefs, on December 1, 2015, a confirmation hearing on the Plan was held and the matter was taken under advisement. On December 21, 2015, the Debtor filed a supplemental letter ("Letter") addressing one of the cases raised by the Purchaser and the City in their briefs. The Court subsequently gave the Purchaser and the City an opportunity to respond to the Debtor's Letter. On January 19, 2016, the City filed a response to the Debtor's Letter.
Although the Debtor's Brief in Support of Plan Confirmation ("Debtor's Brief"), ECF No. 40, challenges the City's standing to object to confirmation of the Plan, the Court notes that the Purchaser appeared at the initial confirmation hearing to join in the City's objection to confirmation and also filed a timely brief opposing confirmation in accordance with this Court's briefing schedule. Since the Debtor does not dispute the Purchaser's standing to object to confirmation and the Purchaser's position appears to be virtually identical to the City's position, it is unnecessary for the Court to resolve whether the City has standing to object to confirmation of the Plan and the Court will proceed as though the Purchaser was the sole objector. The issue of the City's standing is therefore moot.
The Purchaser argues that he holds absolute title to the Property and that the Debtor may only regain ownership of the Property by paying the redemption amount in full within nine (9) months of the acknowledgement of the deed under applicable state law. His position is that the Bankruptcy Code does not alter his state law right to be paid the redemption amount in such manner. The Purchaser asserts that
Purchaser's Br. Supp. Obj. to Second Am.
The Debtor argues that: (1) the Plan meets all of the requirements for confirmation under § 1325(a); (2) the Purchaser holds a defeasible interest "to secure payment of a debt" which is "subject to extinguishment upon payment of that debt"; and (3) the Purchaser holds a claim under § 101(5) which may be modified by the Plan pursuant to § 1322(b)(2). Debtor's Br. 3. The Debtor also argues that Rule 6008 is not applicable to confirmation of the Debtor's Plan and that § 108 does not negate the rights afforded to a debtor under § 1322(b)(2). Id. at 4.
The Purchaser essentially argues that the Property does not constitute property of the estate under § 541(a) because he purportedly holds absolute title to it. Section 541(a)(1) of the Bankruptcy Code provides that "property of the estate" includes "all legal or equitable interests of the debtor in property as of the commencement of the case." In United States v. Whiting Pools, Inc., 462 U.S. 198, 103 S.Ct. 2309, 76 L.Ed.2d 515 (1983), the Supreme Court stated that § 541(a)'s legislative history demonstrates that the language of this provision was intended to sweep broadly to include "all kinds of property, including tangible or intangible property, causes of action ... and all other forms of property currently specified in section 70a of the Bankruptcy Act." Id. at 205 n. 9, 103 S.Ct. 2309 (first quoting H.R.Rep. No. 95-595, pt. 4, at 367 (1977), as reprinted in 1978 U.S.C.C.A.N. 5963, 6323; then quoting S.Rep. No. 95-989, pt. 1, at 82 (1978), as reprinted in 1978 U.S.C.C.A.N. 5787, 5868); accord In re O'Dowd, 233 F.3d 197, 202 (3d Cir.2000).
In order to determine the existence and scope of the debtor's "legal or equitable interests" for purposes of § 541(a)(1), it is well-established that federal courts typically must look to state law. See Butner v. United States, 440 U.S. 48, 54, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979) ("Congress has generally left the determination of property rights in the assets of a bankrupt's estate to state law."); O'Dowd, 233 F.3d at 202 (first citing Congress Talcott Corp. v. Gruber, 993 F.2d 315, 319 (3d Cir.1993); then citing In re Roach, 824 F.2d 1370, 1374 (3d Cir.1987)) ("While federal law defines what types of property comprise the estate, state law generally determines what interest, if any, a debtor has in property.").
The relevant state law in this case is 53 Pa. Stat. and Cons.Stat. Ann. §§ 7101-505 (West 2016), commonly known as the Municipal Claims and Tax Lien Act (the "MCTLA"). Upon the sale of the Property pursuant to § 7283(a) of the MCTLA, the Purchaser argues that he received absolute title to the Property, divesting the Debtor of all interests in the Property, including the right to possession, and leaving her merely a right to redeem the Property. Purchaser's Br. 4. The Purchaser
First, the Purchaser argues that the explicit language of § 7283 provides a purchaser at a tax sale with absolute title. Id. at 4, 9-11. Although the Purchaser is correct that § 7283 states that a purchaser at a tax sale shall take absolute title to property sold at a tax sale, the statute also specifically conditions the grant of absolute title to the purchaser upon the prior owner's right to redeem such property:
53 Pa. Stat. and Cons.Stat. Ann. § 7283 (emphasis added). The Court therefore must determine the impact of the Debtor's right to redeem upon the Purchaser's interest in the Property.
The Purchaser next argues that the cases cited by the Debtor in her brief predated the codification of § 7293 (which sets forth the redemption process) in 1956 and, therefore, "could not have been interpreting the `law' governing the tax sale of the Subject Property and any current statutory right to redemption." Purchaser's Br. 12. Moreover, the Purchaser argues that the cases cited by the Debtor are inapplicable to the case at hand because they address different tax sale statutes and "the substantial differences between the MCTLA and prior tax sale laws make them incomparable." Id. at 14.
By way of background, § 7293 of the MCTLA specifically amends § 32 of the Act of May 16, 1923, Pub.L. No. 207, 1923 Pa. Laws 207 ("Act").
§ 32, 1923 Pa. Laws at 223-24. Section 7293(a) now provides (with the new text underlined) that:
53 Pa. Stat. and Cons.Stat. Ann. § 7293(a). The cases which analyzed the interests held by prior owners and purchasers under a tax sale pursuant to § 32 of the Act thus are clearly applicable to this Court's determination of the Debtor's and Purchaser's interest in the Property under § 7293(a) of the MCTLA.
The seminal case which analyzed the interests of prior owners and purchasers in property sold under § 32 of the Act was Easton v. Sulkin, 19 Pa. D. & C. 152 (1933). In that case, the court had to determine whether a prior owner was entitled to possession of property sold at a tax sale under § 32. In making that determination, the court noted that, although the Act "says nothing about the possession, yet it has been decided time and time again under very similar acts that the party who is entitled to redeem is entitled to possession during the period allowed him for redemption." Id. at 154. The court also held that statutes governing tax sales should be "liberally construed in favour of the right of redemption," and a tax sale "leaves in the owner an equity of redemption." Id. (quoting Appeal of Gault, 33 Pa. 94, 94 (1859)). The court ultimately held that the purchaser in a tax sale only takes "defeasible title, liable to be defeated by a redemption within the period prescribed by the statute." Id. (quoting Appeal of Gault, 33 Pa. at 94). Referring to similar tax sale statutes, the Easton court explained:
Id. (first quoting Shalemiller v. McCarty, 55 Pa. 186, 188 (1867); then quoting City of Philadelphia v. Woodside, 10 Pa. D. & C. 565 (1928)). Thus, the purchaser in a tax sale under § 32 of the Act merely
The holding in Easton has been adopted by many Pennsylvania courts, even after the codification of § 7293, and remains good law today. See, e.g., City of Philadelphia v. Novick, 400 Pa.Super. 101, 582 A.2d 1363, 1366 (1990) (citing Easton, 19 Pa. D. & C. 152) (holding that, with regard to redemption under § 7293, "title to the property sold is a defeasible one and does not mature into a legal title until the period of redemption has expired"); City of Philadelphia v. Chicken's Place, Inc., 388 Pa.Super. 198, 565 A.2d 182, 184 (1989) (holding that, with regard to whether § 7293 imposes a duty on the purchaser of property to purchase insurance during the redemption period, "a reasonable man with a defeasible interest in property would not necessarily insure it against hazards until such a time that his interest became indefeasible"). Indeed, a bankruptcy court in the Western District of Pennsylvania recently addressed this issue and held that:
In re Hammond, 420 B.R. 633, 635 (Bankr.W.D.Pa.2009) (citations omitted).
Not only did the Purchaser fail to consider these cases, but, based upon City of Philadelphia v. F.A. Realty Investors Corp., 95 A.3d 377, 385 n. 13 (Pa. Commw.Ct.2014), he erroneously argues that Pennsylvania courts "turn[] to the mortgage foreclosure case law in determining the ownership interests after a tax sale under the MCTLA." Purchaser's Br. 10. As discussed below, the state law rights granted to prior owners and purchasers in property sold in a mortgage foreclosure sale are completely different than the rights given to prior owners and purchasers in a tax sale. In fact, the F.A. Realty court made no determination regarding ownership interests after a tax sale is held under the MCTLA. The court merely determined on appeal that a prior owner is permitted to file a petition to redeem property under § 7293 as soon as the tax sale has concluded and does not have to wait until the deed is acknowledged.
The ownership interests of prior owners and purchasers under mortgage foreclosure sales are completely different than the ownership interests of prior owners and purchasers in tax sales under § 7293. First, the prior owner in a mortgage foreclosure sale has no right to redeem property after the sale occurs. Rather, under 41 Pa. Stat. and Cons.Stat. Ann. § 404, the prior owner may only "cure" any default under the mortgage up until "one hour prior to the commencement of bidding at a sheriff sale or other judicial sale on a residential mortgage obligation." As discussed in In re Townsville, 268 B.R. 95 (Bankr.E.D.Pa.2001):
Id. at 118-19 (citations omitted).
Thus, at the conclusion of a mortgage foreclosure sale, the prior owner has no right to redeem property and the purchaser "obtains vested equitable ownership of the property." In re Donovan, 183 B.R. 700, 701 (Bankr.W.D.Pa.1995) (first citing Butler v. Lomas & Nettleton Co., 862 F.2d 1015 (3d Cir.1988); then citing Pa. Co. v. Broad St. Hosp., 354 Pa. 123, 47 A.2d 281, 283 (1946)). "Upon acknowledgment and delivery of the deed, legal title, too, passes to the purchaser." In re Brown, 75 B.R. 1009, 1012 (Bankr. E.D.Pa.1987) (citing In re Rouse, 48 B.R. 236, 240-41 (Bankr.E.D.Pa.1985)).
In contrast, as discussed above, § 7293 clearly provides that the prior owner in a tax sale retains the right to redeem such property until nine months after the deed is acknowledged. During this redemption period, the prior owner may continue in possession of the property and the purchaser merely holds defeasible title in the property until the redemption period expires. Upon the expiration of the redemption period, the purchaser holds absolute title to the property and the prior owner loses all rights to possession of the property.
Thus, the rights of prior owners and purchasers in a tax sale are completely different from the rights of mortgagors and mortgagees in a mortgage foreclosure sale and there is absolutely no basis to rely upon Pennsylvania mortgage foreclosure law in connection with determining the rights of owners and purchasers in tax sales.
Finally, the Purchaser dismisses the holdings in In re Terry, 505 B.R. 660, 668 (Bankr.E.D.Pa.2014), and In re Minor, 531 B.R. 564, 569-72 (Bankr.E.D.Pa.2015), based upon the holding in F.A. Realty. Purchaser's Br. 14-15. In fact, after filing his brief, both of these cases, which support this Court's conclusion, were affirmed on appeal. In In re Terry, 543 B.R. 173 (E.D.Pa.2015), the district court specifically held that:
Id. at 180 (citations omitted). And in In re Minor, Bankr.No. 13-19278, Civ. A. No. 15-3562, ___ B.R. ___, 2016 WL 1256286 (E.D.Pa. Mar. 30, 2016), the district court similarly held that the purchaser in a tax sale under § 7283 of the MCTLA "did not receive absolute title at the tax sale and that Debtor still has an interest in the Property." Id. at ___, at *12; see also id. (favorably quoting City of Philadelphia v. Novick, 400 Pa.Super. 101, 582 A.2d 1363, 1366 (1990), for the proposition that "title to the property sold is a defeasible one and does not mature into a legal title until the period of redemption has expired").
The Purchaser also argues that the redemption amount may not be paid in installments as evidenced by the holding in City of Philadelphia v. Keilyk, 380 Pa.Super. 362, 551 A.2d 1094, 1096 (1988). Purchaser's Br. 16-17. However, the court in Keilyk merely held that the debtor, which owned a one-third interest in property sold in a tax sale, could not redeem his one-third interest in such property by only paying one-third of the redemption amount. 551 A.2d at 1096. Here, the Debtor intends to pay the full redemption amount, albeit over time.
Finally, the Purchaser argues that § 7293(a) "explicitly states that redemption occurs upon payment, and that the right must be exercised within nine (9) months." Purchaser's Br. 18. However, the language of the statute does not require that the redemption amount must be
With regard to the timing of the payment of the redemption amount, the district court in In re Terry specifically recognized that "§ 7293 does not require that the redemption amount be paid in full before the expiration of the redemption period." 543 B.R. at 181 (first citing City of Philadelphia v. Chin, 369 Pa.Super. 182, 535 A.2d 110, 112 (1987); then citing City of Philadelphia v. Taylor, 318 Pa.Super. 435, 465 A.2d 33, 35 (1983)); see also Chin, 535 A.2d at 112 (reviewing the predecessor statute to § 7293 which permitted a one year redemption period, the court held that "§ 7293(a) does not mandate that all acts of redemption, including final payment of the redemption money, must be completed within one year from the date of the acknowledgement of the sheriffs deed"); Taylor, 465 A.2d at 35 (stating that not "all the acts of redemption must be completed within [nine months] from the date of the acknowledgment of the sheriffs deed"). Rather, the prior owner need only "begin the redemption process" by filing the initial petition to redeem and setting forth the facts and the prior owner's readiness to redeem. In re Terry, 543 B.R. at 181 (quoting Chin, 535 A.2d at 112). Moreover, courts will permit a delay in the payment of the redemption amount to the extent that a purchaser is "the major contributor to the delay in the redemption process" or the delay is caused by a "good faith dispute" regarding the determination of the redemption amount. Chin, 535 A.2d at 113.
Based upon the foregoing, it is clear that the Purchaser does not hold absolute title to the Property. The Court now turns to the Purchaser's argument that he does not hold a secured claim which may be modified under § 1322(b).
Under the Debtor's Plan, the Debtor seeks to pay the redemption amount to the Purchaser over time as a secured claim under her Plan pursuant to § 1322(b)(2). Section 1322(b)(2) of the Bankruptcy Code, of course, empowers a debtor, through a Chapter 13 plan, to "modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor's principal residence."
The Purchaser strenuously argues that he does not hold a secured claim against the Debtor because he does not want the Debtor to modify his right to receive the redemption amount under the Plan pursuant to § 1322(b)(2). This position, however, is contradicted and undermined by the fact that he has filed a Claim and an Amended Claim pursuant to § 501 and, in both instances, certified that he holds a secured claim against the Debtor arising from his purchase of the Property in the Tax Sale.
Under § 502(a), a "claim or interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest ... objects." Here, no party has objected to the Claim or the Amended Claim and the Purchaser has not withdrawn his Claim or Amended Claim.
Even if the Purchaser had asserted that his objection to confirmation of the Plan constituted a withdrawal of his Claim and Amended Claim — he has not — the Court would have deemed him to hold a secured claim in connection with his right to be paid the redemption amount. In determining whether a party holds a secured claim against a debtor, courts first look to the definition of "claim" under the Bankruptcy Code in § 101(5), which provides that a claim is a:
11 U.S.C. § 101(5).
Congress intended "claim" to have the "broadest possible definition" so that "all legal obligations of the debtor, no matter how remote or contingent, will be able to be dealt with in the bankruptcy case." In re Grossman's Inc., 607 F.3d 114, 121 (3d Cir.2010) (quoting H.R.Rep. No. 95-595, pt. 3, at 309 (1977)). The Supreme Court has opined that claims are to be defined in the "broadest available" terms, FCC v. NextWave Pers. Commc'ns Inc., 537 U.S. 293, 302, 123 S.Ct. 832, 154 L.Ed.2d 863 (2003) (quoting Johnson v. Home State Bank, 501 U.S. 78, 83, 111 S.Ct. 2150, 115 L.Ed.2d 66 (1991)), and has characterized a claim as "nothing more nor less than an enforceable obligation," Pa. Dep't of Pub. Welfare v. Davenport, 495 U.S. 552, 559, 110 S.Ct. 2126, 109 L.Ed.2d 588 (1990).
Furthermore, an enforceable obligation exists even where the right to payment lies not against the debtor, but against his property. See 11 U.S.C. § 102(2) (providing that a "`claim against the debtor' includes [a] claim against property of the debtor"). For example, a creditor's right to the proceeds of the sale of mortgaged property "corresponds to an `enforceable obligation' of the debtor" even if the debtor's personal liability on the underlying note is discharged. Johnson, 501 U.S. at 83-84, 111 S.Ct. 2150 (emphasis added) (holding that the Tenth Circuit Court of Appeals wrongly decided that the discharge of the debtor's personal liability extinguished the creditor's claim). Therefore, a creditor's right might simultaneously "constitute both a pre-petition claim and a property interest." In re Verner, 318 B.R. 778, 789 (Bankr.W.D.Pa.2005).
With regard to whether a claim is secured, § 506(a)(1) provides that "[a]n allowed claim of a creditor secured by a lien on property in which the estate has an interest ... is a secured claim." A "lien" is defined under § 101(37) as a "charge against or interest in property to secure payment of a debt or performance of an obligation."
The Purchaser argues that he does not hold a claim against the Debtor because the Debtor is not legally obligated to pay him the redemption amount. Since the
Based upon the Third Circuit's expansive reading of the definition of claim under § 101(5)(A) in In re Grossman's, this Court concludes that the Purchaser holds a claim in this proceeding. Specifically, an enforceable obligation encompasses both contingent and unmatured rights to payment, regardless of the basis for the contingency, and a claim may exist under the Bankruptcy Code before a right to payment even exists under state law. In re Rodriguez, 629 F.3d 136, 138-39 (3d Cir.2010) (quoting In re Grossman's, 607 F.3d at 121).
Neither the Bankruptcy Code nor Third Circuit law places any limitation on the concept of a "contingent" right to payment, and the fact that the Debtor is in control of the contingency here is of no moment. At the time of the Debtor's filing, the Purchaser clearly had a right to payment of the redemption amount contingent upon whether the Debtor timely elected to redeem the Property. Once the contingency was triggered by the Debtor's timely election to redeem the Property under her Plan, the Purchaser held an enforceable obligation against the Debtor for payment of the redemption amount secured by the underlying Property.
Because the Purchaser's right to payment of the redemption amount is secured by a "charge" against the Property equal to the redemption amount calculated under state law, the Purchaser holds a secured claim against the Debtor.
The Purchaser also argues that, under the MCTLA, the Debtor's redemption right is "exercise[d]" only "upon the payment of the Redemption Amount so there is no moment in time where the Debtor owes a debt to the Purchaser. Rather, a redemption right under state law can only be exercised when the payment is present, akin to a substantially contemporaneous exchange." Purchaser's Br. 25.
As discussed above, a prior owner's exercise of a redemption right need not occur contemporaneously with the payment of the redemption amount under the MCTLA. The redemption procedures set forth in § 7293(b) are triggered by the filing of a petition to redeem by the prior owner. After the petition to redeem is filed, the prior owner must demonstrate a readiness to pay the redemption amount and obtain a rule from the court, and, only then, is the prior owner required to pay the redemption amount. See 53 Pa. Stat. and Cons.Stat. Ann. § 7293(b) (stating that, if appropriate pursuant to a rule to show cause why a property should not be redeemed, "[the court] shall make the rule absolute, and upon payment being made or tendered, shall enforce it by attachment"). Thus, as recognized in Terry, the prior owner need only "begin the redemption process" by filing the initial petition to redeem. 543 B.R. at 181 (quoting Chin, 535 A.2d at 112). Here, the Debtor exercised her right to redeem the Property
This Court recognizes that bankruptcy courts across the country are divided on the issue of whether the redemption amount associated with tax sales can be paid out over time under § 1322(b)(2).
Section 108(b) provides that:
11 U.S.C. § 108(b). Reading § 108(b) to preclude debtors from extending these redemption payment periods under Chapter 13 plans directly conflicts with § 1322(b)(2), which explicitly permits a debtor to modify a secured claim over time. As long recognized, "where one section of the Bankruptcy Code explicitly governs an issue, another section should not be interpreted to cause an irreconcilable conflict." Bank of Commonwealth v. Bevan, 13 B.R. 989, 994 (E.D.Mich.1981) (citing Richards v. United States, 369 U.S. 1, 11, 82 S.Ct. 585, 7 L.Ed.2d 492 (1962)); see also In re Bates, 270 B.R. 455, 466 (Bankr. N.D.Ill.2001) (holding that "nothing in § 108(b) transforms the extension of a non-bankruptcy right into a negation of bankruptcy rights specifically accorded elsewhere in the Code"). This Court accordingly holds that the proper way to reconcile § 108(b) with § 1322(b)(2) is to require a debtor to elect to redeem by the deadline set forth in § 108(b), but to permit payment of the redemption amount over time as a secured claim pursuant to § 1322(b)(2).
Finally, it is generally accepted that the Bankruptcy Code trumps state law in this area of the law. See In re Sadler, Bankr. Case No. 13-17696, Case No. 1:14CV2312, 2015 WL 9474174, at *7 (N.D.Ohio Dec. 29,
Vanston Bondholders Protective Comm. v. Green, 329 U.S. 156, 162-63, 67 S.Ct. 237, 91 L.Ed. 162 (1946) (first citing Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); then citing Heiser v. Woodruff, 327 U.S. 726, 66 S.Ct. 853, 90 L.Ed. 970 (1946); then citing Am. Sur. Co. v. Sampsell, 327 U.S. 269, 272, 66 S.Ct. 571, 90 L.Ed. 663 (1946); and then citing Pepper v. Litton, 308 U.S. 295, 303-06, 60 S.Ct. 238, 84 L.Ed. 281 (1939)).
The Purchaser argues that, even if his interest is subject to § 1322(b)(2), the Debtor's attempt to redeem the Property did not conform to applicable federal and state rules. First, the Purchaser asserts that the Debtor should have filed a motion to redeem the property under Rule 6008 in this proceeding. Purchaser's Br. 20. Second, the Purchaser argues that the Debtor should have filed a petition to redeem in state court or should have removed the "tax sale action to bankruptcy court to file the necessary petition to redeem." Id. In response, the Debtor argues that neither Rule 6008 nor applicable nonbankruptcy law control as long as her Plan conforms to §§ 1322(b)(2) and 1325 of the Bankruptcy Code. Debtor's Br. 30-31. Essentially, according to the Debtor, the MCTLA sets forth the parties' rights and the Bankruptcy Code sets forth how to dispose of those rights. Id.
Contrary to the Purchaser's arguments, neither the Bankruptcy Code nor the Federal Rules of Bankruptcy Procedure require a debtor to file a motion to redeem real property. Rule 6008 states that "[o]n motion by the debtor ... and after hearing on notice as the court may direct, the court may authorize the redemption of property from a lien or from a sale to enforce a lien in accordance with applicable law." Fed. R. Bankr.P. 6008. However, pursuant to § 722, Rule 6008 is only applicable in Chapter 7 proceedings. Fed. R. Bankr.P. 6008 advisory committee notes. Moreover, an individual in a Chapter 7 proceeding can only redeem "tangible personal property," not real property. 6 Collier on Bankruptcy ¶¶ 722.01-.02[1] (Alan N. Resnick
Following the holding of the district court in In re Minor, "[n]either Rule 6008 nor § 108(b) require Debtor to file a motion or petition to redeem instead of filing a Chapter 13 plan to pay a secured claim under § 1322(b) where appropriate." ___ B.R. at ___, 2016 WL 1256286, at *13 (citing In re Kasco, 378 B.R. 207, 212-13 (Bankr.N.D.Ill.2007)). Moreover, the Minor court noted with approval the holding by the Seventh Circuit that "[t]he purpose behind section 108(b) is to permit the debtor an extension of time for doing certain acts necessary to preserve his rights. It would be anomalous to apply it to restrict debtors' rights." Id. at ___, n. 124, at *13, n. 124 (quoting Moody v. Amoco Oil Co., 734 F.2d 1200, 1216 (7th Cir.1984)). As in Minor, the Debtor in this case elected to modify the Purchaser's secured claim by paying the redemption amount over time under her Plan pursuant to § 1322(b)(2). This is distinguishable from a redemption under applicable state law, and the Debtor therefore does not need to take any action under state law to redeem the Property. See In re LaMont, 740 F.3d 397, 409 (7th Cir.2014) (stating that § 108(b) does not apply where a secured claim is disposed of under a debtor's plan because the purchaser is "not formally redeeming the property"); In re Terry, 505 B.R. 660, 668 (Bankr.E.D.Pa.2014) (allowing a debtor to make redemption payments through a Chapter 13 plan); In re Hammond, 420 B.R. 633, 637 (Bankr.W.D.Pa. 2009) (allowing the same).
Finally, other than denying that he has a claim subject to § 1322(b)(2) and arguing that the Debtor did not properly file a motion to redeem the Property, the Purchaser has not articulated any reason why confirmation should be denied under § 1325 of the Bankruptcy Code.
For the foregoing reasons, the Purchaser's objections to confirmation of the Debtor's Second Amended Chapter 13 Plan are overruled. An appropriate order follows.
