Cite as: Keith M. Lundin, Lundin On Chapter 13, § 66.2, at ¶ ____, LundinOnChapter13.com (last visited __________).
If the request for relief from the codebtor stay arises under § 1301(c)(2)—alleging that the plan does not propose to pay the co-signed claim in full—11 U.S.C. § 1301(d) grants automatic relief if neither the debtor nor the codebtor files a written objection within 20 days after the filing of the request.1 As discussed above, absent naming and noticing the codebtor as a respondent, it is not obvious how the codebtor will be aware of the request for relief in time to file a written response within 20 days. Section 1301(d) is “automatic” in that “such stay is terminated” absent a timely written objection. In some jurisdictions, it is routine for movant’s counsel to submit an order for relief from the codebtor stay, although § 1301(d) seems not to require an order. In other jurisdictions, the courts refuse to enter such orders, and creditor’s counsel can simply proceed against the codebtor at the expiration of the 20-day period absent written objection.
Section 1301(d) requires a “written objection” to avoid automatic termination of the stay. It is not clear what the written objection should say. It is probably sufficient that the debtor or the codebtor states, “I object to relief under § 1301(c)(2).” It would be nice for the objection to state a ground such as, “The plan pays the co-signed claim in full.” Except for a full-payment plan or a composition plan that separately classifies the co-signed debt for full payment,2 the Code does not suggest that the debtor or codebtor has defenses to a § 1301(d) motion.3 But on the face of the Code, the filing of any written objection prevents automatic relief at the expiration of the 20-day period and will buy time until a hearing on the underlying request. If there is no substantive ground for objection, counsel should consider whether Bankruptcy Rule 9011 discourages routine filing of a written objection to relief under § 1301(c)(2) for the sole purpose of avoiding automatic termination under § 1301(d).