Can a Debtor Cure Another’s Mortgage through Chapter 13?

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Consider the following Christmas miracle: Bob Cratchit has a long-term mortgage with Scrooge & Marley Bank. Bob Cratchit dies and there is a default on the mortgage. The mortgaged residence then passes to his son, Tiny Tim, by operation of law. Tiny Tim files for chapter 13 and includes the defaulted mortgage with Scrooge & Marley Bank in his plan. Scrooge & Marley Bank argues it has no claim against Tiny Tim because privity of contract is lacking, and Scrooge & Marley Bank therefore has no debtor-creditor relationship with Tiny Tim. How might the court rule?

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Cole Parker

Law Clerk to the Hon. John P. Gustafson, United States Bankruptcy Court Northern District of Ohio

Law Clerk to the Hon. John P. Gustafson, United States Bankruptcy Court Northern District of Ohio

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