IN RE JONES, (Bankr.S.D.Ohio 1979)

SIDMAN, Bankruptcy Judge.

Even though the real estate was necessary to an effective reorganization, the debtor failed to justify the continuation of the Chapter XIII automatic stay by having established a pattern of late mortgage payments while showing only a minimal effort to escrow a sufficient amount of money each month to catch up on delinquencies. See Rule 1-401(d) at ¶ 20,971.

The debtors executed and delivered to the creditor a promissory note in the amount of $16,000, calling for monthly payments of $159.92 for fifteen years. A mortgage deed was contemporary executed to secure the performance of the terms of the promissory note.

Approximately a year later, the debtor filed a wage earners' plan under Chapter XIII of the Bankruptcy Act, which duly listed the creditor at the proper address, thereby giving him notice, although it was allegedly never received.

Subsequently, a week later, the creditor exercised its option to declare the entire unpaid principle, sum and interest as being immediately due, there being a default in the payments on the note at that time. He thereafter commenced a foreclosure action. In response, the debtor did not dispute the fact that he was eleven months behind in his mortgage payments but proposed, in an attempt to cure this delinqnency, to pay a lump sum of $450.00 to the bank, and pay $200.00 every two weeks, to pay current mortgage payments plus arrearages. At this rate it would have taken approximately seven to eight months to bring the loan into current status.

In making its decision, the court acknowledged that the debtor had the burden of proof, and listed three factors which were relevant in its inquiry as to the continuance of the automatic stay: (1) the stay must be necessary to preserve the debtor's estate or to carry out the Chapter XIII plan; (2) the stay must not directly or indirectly impair the security of the lien; and (3) the owner of the secured indebtedness must not be required to accept less than the full periodic payments specified in his contract.

While the court conceded, given the earlier findings of fact and the state of the record before the court, that the debtor's real estate was necessary to carry out the terms of the Chapter XIII plan, and that the security was not in immediate jeopardy, the debtor failed to justify the continuation of the automatic stay. The court found that the debtor showed a consistent pattern of late payment on the mortgage to the bank. He further showed only a minimal effort to escrow or save a sufficient amount of money each month to fully catch up to delinquencies. Accordingly, the stay was lifted.