Answer to Question 1
Automatic stay
The court refused to terminate the automatic stay, reasoning that Moffett's right of redemption was part of the bankruptcy estate, and ordered the car returned to Moffett. The court required adequate protection, however, in Moffett's reorganization plan for Tidewater's security interest. As modified, the plan then provided for full payment of the amount due under the contract over the course of the plan. Tidewater returned the car and appealed to the U.S. Court of Appeals for the Fourth Circuit, which affirmed the lower court's decision. The appellate court explained, Once a debtor files for Chapter 13 bankruptcy, the Bankruptcy Code automatically stays any act by parties to exercise control over, or to enforce a lien against, property of the bankruptcy estate. Any entity that possesses property that the bankruptcy trustee may use, sell, or lease under the Bankruptcy Code is required to turn over or account for the property. Before requiring a party to turn over property, however, courts must ensure that the party's interest in the property is adequately protected. The court recognized that the UCC permits a debtor to redeem collateral by tendering fulfillment of all obligations secured by the collateral. Moffett's modified reorganization plan facilitates the exercise of this right of redemption by tendering to Tidewater Finance the full amount due under the contract. The Bankruptcy Code was designed to facilitate the financial rehabilitation of debtors. The bankruptcy court's orders here accomplish precisely that by returning to Moffett her sole means of transportation to work, while at the same time fully protecting the interests of her creditor. (Under the Bankruptcy Abuse and Consumer Protection Act of 2005, to obtain the confirmation of a Chapter 13 plan, the plan must provide that a creditor with a purchase-money security interest retains its lien until payment of the entire debt for a motor vehicle purchased within 910 days before the filing of the petition.)
Answer to Question 2
TRUE