In Re Reyes

MEMORANDUM DECISION

On March 4, 1986, Guild Mortgage Company (hereinafter “Guild”) filed an objection to confirmation of Debtors’ Chapter 13 plan or alternatively for relief from automatic stay. The basis for the motion was that Debtors’ underlying obligation to Guild had been previously discharged in a Chapter 7 proceeding. The motion was heard March 10, 1986. After reviewing the pleadings on file and hearing arguments of counsel, this court took the matter under submission.

FACTUAL SUMMARY

On April 29, 1983, Rene Reyes filed a petition under Chapter 13. The case was converted to Chapter 7 on February 25, 1985. Guild held a first trust deed to secure the repayment of a promissory note in the amount of $54,000. Reyes did not reaffirm his debt under 11 U.S.C. § 524 (c). Subsequently, Reyes received a Chapter 7 discharge on July 1, 1985.

Thereafter, Guild initiated foreclosure proceedings which were stayed by the present Chapter 13 filing on February 3, 1986. At the time of the filing of the Chapter 13 Petition, the Debtors were 20 payments in arrears on their obligation to Guild in the approximate amount of $550.00 per month. Debtors proposed a plan paying $350.00 per month to…