## Facts

- In August 1999, Richard Carona filed a voluntary Chapter 13 bankruptcy case.
- The bankruptcy court confirmed Carona’s Chapter 13 plan in March 2000.
- Sterling Bank was a secured creditor with security interests in Carona’s trucks and trailers.
- After confirmation, Sterling Bank sought relief from the automatic stay to repossess and sell the trucks and trailers under nonbankruptcy law.
- Sterling Bank alleged Carona failed to make plan payments to the Chapter 13 trustee as required by the confirmed plan.
- Sterling Bank presented evidence that Carona was approximately $8,700 delinquent in trustee payments.
- Carona, through counsel, presented no evidence disputing the delinquency.
- Carona did not cure the payment default and did not seek to modify the confirmed plan to address the delinquency.
- Carona opposed stay relief by arguing that, upon confirmation, the trucks and trailers revested in him under 11 U.S.C. § 1327(b), meaning the collateral was no longer property of the estate and the stay no longer applied, rendering Sterling Bank’s motion “moot.”

## Issues

1. After a Chapter 13 plan is confirmed and property revests in the debtor under 11 U.S.C. § 1327(b), does the automatic stay still apply such that a secured creditor must obtain stay relief to repossess collateral?
2. Does a substantial, uncured post-confirmation default in Chapter 13 plan payments to the trustee constitute “cause” for relief from stay under 11 U.S.C. § 362(d)(1)?

## Decision

- The court held that confirmation and revesting did not make the automatic stay inapplicable; the motion for relief from stay was not moot.
- The court found “cause” under § 362(d)(1) based on Carona’s substantial, uncured post-confirmation default in plan payments.
- The court granted Sterling Bank relief from the automatic stay to proceed against its collateral (the trucks and trailers) under applicable nonbankruptcy law.

## Legal Principles

- The automatic stay under 11 U.S.C. § 362(a) restricts creditor collection efforts during a bankruptcy case, including acts to enforce liens against covered property.
- Even if confirmation causes estate property to revest in the debtor under 11 U.S.C. § 1327(b), the automatic stay can continue to protect the collateral as “property of the debtor,” so a secured creditor generally still must seek relief from stay before repossession.
- A confirmed Chapter 13 plan creates binding payment obligations; a material post-confirmation failure to make required plan payments may constitute “cause” for relief from stay under 11 U.S.C. § 362(d)(1).
- Where a creditor proves a meaningful post-confirmation arrearage and the debtor offers no evidence, no cure, and no plan modification proposal, the court may grant stay relief to permit the creditor to enforce its lien rights.

## Conclusion

In re Carona granted Sterling Bank relief from the automatic stay because Carona was substantially delinquent on post-confirmation plan payments and took no steps to cure or modify the plan; the court also rejected the argument that plan confirmation and revesting eliminated the need for stay relief.


In re Carona, 254 B.R. 364 (2000)