On an issue that divides the lower courts, Bankruptcy Judge Nicholas W. Whittenburg of Chattanooga, Tenn., concluded that a debtor in chapter 13 has the rights of a trustee to extend deadlines under Section 108(b).
A woman filed a chapter 13 petition one day before the expiration of the one-year period for redemption of her home after the tax sale. One month later, the mortgage lender, as agent for the debtor, sent a check to redeem the property. The purchaser at the tax sale contended that the debtor was not a trustee entitled to the 60-day extension of the redemption period provided by Section 108(b).
That subsection provides that “a trustee” has 60 days after an order for relief to perform an act if the deadline otherwise would have expired immediately after filing.
Judge Whittenburg noted in his April 5 opinion that lower courts are divided on whether a chapter 13 debtor has the rights of a trustee under Section 108(b). He noted that several courts of appeals stated without discussion that a chapter 13 debtor has the benefits of the subsection.
A chapter 13 debtor has the rights and powers of a trustee over estate property under Section 1303, to the exclusion of the trustee. Because the right of redemption is property of the estate, to deny a debtor the extension provided by Section 108(b) would be “absurd,” Judge Whittenburg said.
Because chapter 13 debtors have the right to prosecute claims on behalf of the estate, it would be “incongruous,” he said, if debtors lacked the protection provided by Section 108(b).