Bankruptcy Court Overrules Objection

In the Chapter 7 bankruptcy case of Boliaux, Edward F.; In re, the bankruptcy court overruled an objection to a reaffirmation agreement saying that the objection, which was based on the hardship presumption, was moot because the presumption had expired.

The details of the bankruptcy case:

The Chapter 7 debtor reaffirmed a debt owed to American Chartered Bank. The debt was secured by a mortgage on a car lot. American filed the agreement and asked for court approval, which was opposed by another creditor who also claimed a mortgage on the car lot. The debtor did not seek to reaffirm the debt owed to the other creditor, who was scheduled as holding an unsecured claim. The court found that the agreement was timely even though it was filed more than 60 days after the meeting of creditors because it amended a timely filed agreement.

The court also found that while the reaffirmation agreement was timely, the objection to the reaffirmation agreement was not timely because the presumption of undue hardship arises only for 60 days after a reaffirmation agreement is filed with the bankruptcy court.  An amendment to the reaffirmation agreement does not automatically extend the presumption of undue hardship time period. That time period for objecting to a reaffirmation agreement because of presumption of undue hardship can only be extended by the bankruptcy court. If the creditor had filed an objection to the reaffirmation agreement during the 60 days after the agreement was filed with the bankruptcy court, then the court would have considered the objection.