Cite as: Keith M. Lundin, Lundin On Chapter 13, § 66.3, at ¶ ____, LundinOnChapter13.com (last visited __________).
Neither the Code nor the Rules provide any particular timing for the request for relief from the codebtor stay of § 1301. It is generally recognized that a creditor need not wait for confirmation or for the debtor to perform under the plan before seeking leave to proceed against a codebtor.1 If the debtor’s plan proposes to pay 50 percent of a co-signed claim, the creditor can move for relief to collect the other 50 percent from the codebtor before or after confirmation and before completion of payment of the debtor’s half of the claim. If irreparable harm is alleged under § 1301(c)(3),2 the creditor need not wait until the harm has occurred but can proceed with the § 1301(c) motion and hearing at any time. The creditor can collect from the codebtor in advance of precise calculation of the portion the debtor will pay through the plan.3
The only exception to creditor control of the timing of the request for relief from the codebtor stay that the courts have recognized is the rare circumstance when the confirmed plan postpones the creditor’s remedy against a codebtor until after performance by the debtor under the plan.4
1 See Household Fin. v. Jacobsen, 20 B.R. 648 (B.A.P. 9th Cir. 1982); Wiremen’s Credit Union, Inc. v. Laska, 20 B.R. 675 (Bankr. N.D. Ohio 1982); Police Fed. Credit Union v. Holmes, 9 B.R. 454 (Bankr. D.D.C. 1981).
2 See § 90.1 [ Irreparable Harm ] § 67.5 Irreparable Harm.
3 See § 88.1 [ Plan Does Not Pay Debt in Full ] § 67.2 Plan Does Not Pay Debt in Full.
4 See § 85.2 [ Can Plan Enlarge Codebtor Stay? ] § 65.4 Can Plan Enlarge Codebtor Stay?. See, e.g., Household Fin. Corp. v. Weaver, 8 B.R. 803 (Bankr. S.D. Ohio 1981); City Loan & Sav. Co. v. Betts, 8 B.R. 799 (Bankr. S.D. Ohio 1981).