Chapter 13 bankruptcy debtor Idolia M. Avila, age 71, owns a triplex worth $300,000. It is subject to a $178,916 first mortgage.

Avila’s bankruptcy reorganization plan requires her to pay $1,339 monthly to mortgage lender Citifinancial Mortgage. But she has failed to make those payments.

Purchase Bob Bruss reports online.

The mortgage lender was granted relief from Avila’s automatic bankruptcy stay to begin foreclosure proceedings. Now, Citifinancial Mortgage requests permission of the U.S. Bankruptcy Court to complete its foreclosure sale.

However, Avila’s attorney emphasized she has at least 40 percent equity in this property so the mortgage lender has virtually no risk of a foreclosure loss by allowing her more time to either refinance or sell the property.

If you were the judge would you grant the mortgage lender relief from the automatic bankruptcy stay to proceed with its foreclosure sale?

The judge said no!

The evidence shows bankruptcy debtor Avila has a large equity in her residential property, the judge began. Although she has not made the monthly payments she promised to pay under her Chapter 13 bankruptcy reorganization plan, he continued, allowing the lender to foreclose would be a substantial forfeiture.

“An equity cushion provides adequate protection although not a single mortgage payment has been made. Here, Citifinancial Mortgage is adequately protected by an equity cushion of 40 percent so relief based on the lack of adequate protection is not appropriate,” the judge ruled. The mortgage lender may not proceed with the foreclosure sale of Avila’s property, he concluded.

Based on the 2004 U.S. Bankruptcy Court decision in In Re Avila, 311 B.R. 81.

(For more information on Bob Bruss publications, visit his
Real Estate Center


What’s your opinion? Send your Letter to the Editor to

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription