In re Lazaro: Non-Monetary Default and § 1322(b)(5)

Can a debtor provide for a non-debtor’s loan under § 1322(b)(5) even if the plan does not address a non-monetary default on the claim? In re Lazaro suggests the answer may be “yes.” In that case, the Court held not only that the Debtor’s plan could provide to cure a monetary default on a loan taken out by the Debtor’s father but also that the plan could ignore a due-on-sale clause in the mortgage in doing so.

It helped that the asserted non-monetary default was longstanding . . .

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James M. Davis

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James M. Davis is a staff attorney in the office of Henry E. Hildebrand, III, the Chapter 13 Standing Trustee for the Middle District of Tennessee. Mr. Davis is a graduate of Johns Hopkins University in Baltimore, Maryland, and the William and Mary School of Law in Williamsburg, Virginia.

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