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20 ¦ MARCH 23, 2020 NEWS

¦ From WHEN BANKRUPTCY on PAGE 19 debtor has to cure, i.e., pay off the entire mortgage
Savings Bank of Rockville, 34 B.R. 362, 366-67 (D. balance in exercise of the debtor’s equity of redemp-
Conn. 1983) (debtor who filed chapter 11 before tion, Canney, 284 F.3d at 371 – and that a bankruptcy
foreclosure by sale was confirmed by the state court filing only affords an additional 60 days to exercise
would be given the opportunity to reorganize with that right. Id. at 372-73. Inasmuch as Connecticut’s
the property by virtue of the rights to cure afforded strict foreclosure procedures are very similar to
by 11 U.S.C. §1123(a)(5)(G)); Matter of St. Amant, Vermont’s, Canney has been held to apply to a Con-
41 B.R. 156, 163 (Bankr. D. Conn. 1984) (holding necticut strict foreclosure where the debtor filed a
automatic stay applicable to prevent “involuntary chapter 7 bankruptcy petition several days before
transfer of ownership … by the terms of the strict her law day passed. Provident Bank v. Lewitt, 84
foreclosure judgment,” and observing more broadly Conn. App. 204 (2004).
that “[i]n Connecticut, when a bankruptcy petition But the effect of Canney on Connecticut strict
is filed during the redemption period, it is the own- foreclosures and bankruptcy was short-lived. In
ership of the property which passes into the estate 2003, the Connecticut legislature passed into law
and not merely a statutory post-sale redemption subsection (b) of C.G.S. §49-15, effective October 1,
right subject to extinction by the 2003, which provided that:
passage of the statutory period”). Upon the filing of a bankruptcy
That legal landscape changed petition by a mortgagor under
with the Second Circuit’s decision Chapter 13 of Title 11 of the Unit-
in In re Canney, 284 F.3d 362 (2d ed States Code, any judgment
Cir. 2002). In Canney, the Second The point at which against the mortgagor foreclos-
Circuit held that the sixty-day bankruptcy relief must ing the title to real estate by strict

extension afforded by 11 U.S.C. be sought in the event of foreclosure shall be opened au-

§108(b) to “cure a default” or foreclosure can depend upon tomatically without action by
“perform any other similar act” applicable state law, and the any party or the court, provided,
applied to the passing of a law day the provisions of such judgment,
in a Vermont strict foreclosure, analysis can be tricky. other than the establishment of law

rather than the indefinite stay im- days, shall not be set aside under
posed by 11 U.S.C. §362(a) when this subsection, provided no such
a debtor files a chapter 7 bank- judgment shall be opened after
ruptcy petition. Id. at 370-73. In the title has become absolute in
relevant part, §108(b) provides that: any encumbrancer or the mortgagee, or any person
if applicable nonbankruptcy law [or] an order claiming under such encumbrancer or mortgagee.
entered in a non-bankruptcy proceeding … fixes a 2003 Conn. Legis. Serv. P.A. 03-202 (S.S.B. 900)
period within which the debtor may … cure a de- (emphasis added). The legislative history to this en-
fault, or perform any other similar act, and such actment squarely explains that its purpose was to
period has not expired before the date of the filing reverse the effect of Canney as it relates to Chapter
of the petition, the trustee may only … cure, or per- 13 bankruptcies See CT H.R. Tran., 5/3/2002 (State-
form, as the case may be before the later of – (1) the ment of Rep. Hamzy that purpose of amendment
end of such period, including any suspension of such is to put Connecticut’s “relationship between fore-
period occurring on or after the commencement of closures and Chapter 13 bankruptcies in the same
the case; or (2) 60 days after the order for relief. position that we were in before a U.S. Court of Ap-
More particularly, Canney held that a Vermont peal decision was handed down early in March…,
foreclosure judgment fixing a law day in a strict [which was] that if a debtor filed a Chapter 13
foreclosure is an order entered in a nonbankrupt- bankruptcy before the law day, they had a right to
cy proceeding that fixes a period within which the reinstate the mortgage”). Subsection (b) was further

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