IN RE CRAWFORD, (Bankr.E.D.Va. 2000)

STEPHEN MITCHELL, Bankruptcy Judge

In reviewing the file in this chapter 13 case, the court has noted the document entitled Written Objection dated November 5, 1999, and filed on November 9, 1999, by Nicholas and Gwen Gritti. The document does not appear to have been served either on counsel for the debtor or on the chapter 13 trustee.

This case was commenced on October 7, 1999, by the filing of a voluntary chapter 13 petition. On their schedules, the debtors listed an ownership interest in real property located at 6183 Preston Court, Woodbridge, Virginia, under a contract for deed from Mr. and Mrs. Gritti. The schedules valued the property at $148,000 and listed Mr. and Mrs. Gritti as secured creditors holding two claims, one for $138,000 and the other for $5,500.

On October 22, 1999, the debtors filed a proposed plan for the adjustment of their debts. Under the plan they would make 12 monthly payments to the chapter 13 trustee of $610 per month followed by 48 payments of $676 per month. From the payments received, the trustee would pay his own statutory commission, the remaining fees due debtor's counsel in the amount of $950, priority tax claims in the amount of $4,300, a secured automobile claim in the amount of $11,250, and an estimated 30% dividend on unsecured claims. With respect to the two claims held by Mr. and Mrs. Gritti, the plan proposed to resume regular monthly payments beginning with the November 1999 payment and to pay the prepetition arrearages in full over time, but without interest. The regular monthly payments would be made directly by the debtors. The arrearage claims would be paid by the trustee. The $2,676 arrearage on the larger obligation would be cured by payments of $111.50 per month for 24 months. The $5,500 due on the smaller obligation would be satisfied by payments of $91.67 per month for 60 months.

As noted, Mr. and Mrs. Gritti filed a written objection. The chapter 13 trustee and the United States of America also filed objections to confirmation. The confirmation hearing — the date of which was set forth in the Notice of Chapter 13 Case, Meeting of Creditors, Deadlines mailed by the clerk — was held on January 4, 2000. Mr. and Mrs. Gritti did not appear. However, at the hearing confirmation was denied based on the chapter 13 trustee's objection, with leave to the debtors to file a modified plan within ten days.

Although the denial of confirmation technically moots the objection filed by Mr. and Mrs. Gritti, the issues raised in the objection will have to be addressed at some point, which is why the court brings them to the attention of the parties. The position taken by Mr. and Mrs. Gritti in their objection is that the contract for deed has terminated and that the debtors are only "tenants by verbal agreement" paying rent. More compellingly, Mr. and Mrs. Gritti complain that it is out of the payments by the debtors that they in turn make the underlying mortgage payment, and that the mortgage company has refused to accept the November payment because of the arrearage. They say they do not have the means to make up the missing payments out of their own resources and have suffered damage to their credit because of the debtors' default. They also raise the specter that the mortgage company will begin foreclosure proceedings based on the default, and they ask the court "to please give back our right of possession" so that they may sell the property before a foreclosure occurs. They further request, "Please respond and instruct us on how to immediately regain possession of this property."

The court can appreciate that legal representation can be expensive, and that Mr. and Mrs. Gritti state that they do not have the financial means to afford legal counsel. Obviously, no one should lose important legal rights because they cannot afford an attorney to represent them. At the same time, the court cannot give legal advice to a party and still remain impartial. Certainly, Mr. and Mrs. Gritti have the right to file a motion for relief from the automatic stay in order to obtain an order for possession or enforcement of an order for possession from the appropriate state court. Under 11 U.S.C. § 362(c), the automatic stay may be terminated, modified, or conditioned for "cause" — a term which is not defined in the Bankruptcy Code, but which United States Court of Appeals for the Fourth Circuit has held requires to court "[to] balance potential prejudice to the bankruptcy debtor's estate against the hardships that will be incurred by the person seeking relief from the automatic stay if relief is denied." In re Robbins, 964 F.2d 342, 345 (4th Cir. 1992). In order to obtain relief from the automatic stay, a creditor must file with the court, and serve on the debtor, debtor's attorney, and the chapter 13 trustee, a motion requesting such relief. The court is required to hold at least a preliminary hearing within 30 days of the filing of the motion. Additionally, of course, Mr. and Mrs. Gritti may object to confirmation of any amended plan that may be filed by the debtors. In the absence, however, of a properly served motion for relief from the automatic stay, and opportunity for the debtors to be heard in opposition, it would be improper for the court to express a view on the merits of such a request.

For the foregoing reasons, it is

1. The Written Objection by Mr. and Mrs. Gritti, which the court treats as an objection to confirmation, is dismissed at moot in light of the denial of confirmation, and without prejudice to the right of Mr. and Mrs. Gritti to file a motion for relief from the automatic stay or to object on the same grounds to any subsequent plan.

2. The clerk will mail a copy of this memorandum opinion and order to the parties listed below.