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DCrane Law
DCrane Law, Attorney
Category: Bankruptcy Law
Satisfied Customers: 25285
Experience:  Experience in this area derives from assisting corporate clients in complex restructurings.
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Our house was foreclosed on and the sheriff sale has taken

Customer Question

Our house was foreclosed on and the sheriff sale has taken place....we are now in the redemption period. For the last 2 months we have been working with an attorney to file bankruptcy. We qualify to file Chapter 13 which will be filed next week. Will filing bankruptcy extend the redemption period? I live in the state of North Dakota.
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  DCrane Law replied 2 years ago.
Thank you for the post, I am happy to assist you by answering your questions. No, it will not. For your reference, here is a case on the subject: http://bulk.resource.org/courts.gov/c/F2/731/731.F2d.543.83-1219.html

Please let me know if you have any follow up questions.
Customer: replied 2 years ago.
Please respond by giving further specifics.
Customer: replied 2 years ago.
Relist: Inaccurate answer.
Expert:  DCrane Law replied 2 years ago.
Did you read the case of In Re Martinson provided in the link? I ask because the case clearly provides the answer to your questions.

In case you could not access the link, here is the text of the court's decision:

First National Bank of Oakes (Bank) appeals from the district court's1 order granting debtors John and Linda Martinson additional time to redeem certain real estate upon which the Bank had obtained a judgment of foreclosure. The Bank contends that the district court possessed no authority under section 108(b) of the Bankruptcy Reform Act, the governing statute in this case, to extend the period of redemption. We agree with the Bank and reverse that part of the district court's order granting the Martinsons additional time to redeem their property.

2
In late 1980, the Bank obtained a judgment of foreclosure upon real estate that the Martinsons had mortgaged to secure repayment of a loan. On February 17, 1981, the Bank purchased the real estate at the foreclosure sale, in accordance with North Dakota foreclosure procedures. Under North Dakota law, the Martinsons retained a statutory right to redeem their property within one year, or by February 17, 1982. See N.D.Cent.Code Secs. 28-23-11, 28-24-01 to 28-24-02 (1974). On October 17, 1981, when four months remained on the period for redemption, the Martinsons filed a petition in bankruptcy under chapter 11. The Martinsons did not redeem their property within those four months, but on December 4, 1981, with seventy-five days remaining on the statutory period of redemption, they petitioned the bankruptcy court to restrain the Bank from obtaining full title to the mortgaged property at the expiration of the redemption period. On March 12, 1982, several weeks after the period of redemption had passed, the bankruptcy court granted the Martinsons relief, ruling that the Bankruptcy Reform Act's automatic stay provision, 11 U.S.C. Sec. 362(a), operated to suspend the running of the redemption period as of October 17, 1981, the day the chapter 11 petition had been filed. The Bank appealed.

3
On January 12, 1983, the district court reversed the bankruptcy court's order. Rejecting the application of the automatic stay provision, the district court ruled that section 108(b) of the Act governed the suspension of the time in which the Martinsons could exercise their right of redemption. See Johnson v. First National Bank, 719 F.2d 270, 277-78 (8th Cir.1983). Section 108(b) provides that when the debtor

4
may file any pleading, demand, notice, or proof of claim or loss, cure a default, or perform any other similar act, and such period has not expired before the date of the filing of the petition, the trustee2 may only file, cure, or perform, as the case may be, before the later of--

5
1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; and

2) 60 days after the order for relief.3

6
11 U.S.C. Sec. 108(b).

7
Because the statutory redemption period expired more than sixty days after the filing of the petition for bankruptcy, the district court ruled that "[t]he time provided by section 108 for extension under the circumstances of this case is the end of the one year redemption period, including any suspension that has occurred on or after the filing of the Chapter 11 petition." (Emphasis added.) After observing that seventy-five days remained in the redemption period when the Martinsons sought an order restraining the Bank from obtaining full title to their property (December 4, 1981 to February 17, 1982), the district court allowed the Martinsons seventy-five days from the date of its order, or until March 28, 1983, to exercise their right of redemption.

8
Nothing in the language of section 108(b) authorized the district court to extend the redemption period in this case. Section 108(b) provides in mandatory terms that when the period in which the debtor may "cure a default" has not expired as of the filing of the petition in bankruptcy, the trustee or debtor "may only" cure the default "before the later of 1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; and 2) 60 days after the order for relief." Because the statutory redemption period expired on February 17, 1982, more than sixty days after the filing of the petition for bankruptcy, section 108(b) permitted the Martinsons only until that date to redeem their property. Although section 108(b)(1) provides for the extension of the period of redemption when there has been a "suspension of such period occurring on or after the commencement of the case," the redemption period was not suspended on December 4, 1981, when the Martinsons filed a complaint requesting an order restraining the Bank from obtaining full title to the property. Because the bankruptcy court's order suspending the redemption period came after the expiration of the redemption period, the suspension language of section 108(b)(1) is not applicable.

9
We conclude, therefore, that the Martinsons' right to redeem their property expired on February 17, 1982, and that the district court erred in allowing them additional time to exercise a right of redemption. Accordingly, we reverse that portion of the district court's January 12, 1983 order granting the Martinsons until March 28, 1983 to redeem their property, and direct the district court to enter an order consistent with this opinion which establishes that the Martinsons' right to redeem terminated on February 17, 1982.

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