Mather Bobka v. Toyota Motor Credit Corp., No. 18-55688 (9th Cir. 2020)Annotate this Case
After debtor filed for Chapter 7 bankruptcy, she wanted to keep her leased Toyota vehicle. Debtor sent Toyota a signed assumption agreement and then received her bankruptcy discharge the next day. Debtor alleged that her obligations under the lease did not survive the bankruptcy discharge because the assumption agreement had not been reaffirmed under 11 U.S.C. 524(c).
The Ninth Circuit affirmed the district court's judgment affirming the bankruptcy court's determination that lease assumptions survive discharge even if they are not reaffirmed under section 524(c). The panel also held that the parties' failure to comply with the procedures does not nullify debtor's agreement to assume the vehicle lease. Furthermore, debtor and Toyota mutually waived section 365(p)'s writing and timing requirements.
Court Description: Bankruptcy. The panel affirmed the district court’s affirmance of the bankruptcy court’s ruling that a creditor’s post-discharge collection efforts on a vehicle lease did not violate the discharge injunction in a Chapter 7 case. The debtor sent the creditor a signed lease assumption agreement before she received her bankruptcy discharge. The panel held that debtors’ lease assumptions survive discharge even if they are not reaffirmed under 11 U.S.C. § 524(c). The panel also held that the debtor and the creditor mutually waived the procedural requirements for a lease assumption by a debtor under § 365(p).