## Facts

- Mary Catherine Schwass filed a Chapter 7 bankruptcy petition on July 2, 2007.
- She filed a statement of intention indicating she intended to reaffirm a debt secured by her 2001 Ford Explorer, owed to Pacific Capital Bancorp d/b/a Santa Barbara Bank & Trust.
- After filing, the creditor’s counsel asked debtor’s counsel to prepare the reaffirmation agreement.
- Debtor’s counsel responded that the debtor was not obligated to draft the agreement, but counsel would prepare it for a fee paid by the creditor.
- The creditor took the position that preparing the reaffirmation agreement was the debtor’s responsibility.
- No reaffirmation agreement was filed within the statutory period after the petition (as measured under the timing rules tied to § 521(a)(2)).
- The creditor moved for relief from the automatic stay under 11 U.S.C. § 362(h), asserting the debtor failed to “timely perform” her stated intention to reaffirm under § 521(a)(2)(B).

## Issues

1. In a Chapter 7 case where the debtor timely states an intent to reaffirm, which party bears the primary obligation to prepare and tender the reaffirmation agreement: the debtor or the secured creditor?
2. Does a debtor “fail to timely perform” under 11 U.S.C. § 521(a)(2)(B) when no reaffirmation agreement is filed because the debtor did not draft it, such that relief or termination of the stay is warranted under 11 U.S.C. § 362(h)?

## Decision

- The court denied the creditor’s motion for relief from the automatic stay.
- The court held the secured creditor bears the obligation to prepare and provide a reaffirmation agreement when it seeks reaffirmation.
- The debtor’s failure to draft the reaffirmation paperwork did not constitute a failure to perform her stated intention under § 521(a)(2).
- Because the debtor did not violate § 521(a)(2), the predicate for relief or termination under § 362(h) was not satisfied.

## Legal Principles

- A debtor satisfies § 521(a)(2)(A) by timely filing a statement of intention regarding secured consumer debt and personal property.
- “Performance” under § 521(a)(2)(B) is not breached merely because the debtor did not draft the reaffirmation agreement, where the debtor is willing to reaffirm and has not refused to sign an agreement.
- Reaffirmation agreements under § 524(c) are creditor-benefiting, voluntary contracts that must be made before discharge, be in writing, and be filed; the creditor is typically best positioned to supply the agreement’s terms and form.
- Relief or stay termination under § 362(h) depends on an actual debtor failure to timely file or perform duties imposed by § 521(a)(2); a creditor cannot obtain § 362(h) relief based on the absence of an agreement attributable to the creditor’s own inaction.

## Conclusion

The court held that, when a Chapter 7 debtor timely states an intent to reaffirm and remains willing to do so, the secured creditor must take the initiative to prepare and tender the reaffirmation agreement; the debtor’s non-drafting does not amount to nonperformance under § 521(a)(2) and does not justify relief from or termination of the automatic stay under § 362(h).


In re Schwass, 378 B.R. 859 (Bankr. S.D. Cal. 2007)