Citibank Wins Foreclosure Appeal in Bankruptcy Test

Debtors who surrender property under the Bankruptcy Code can’t oppose foreclosure efforts by Citibank, a federal appeals court said Oct. 4 (Failla v. Citibank N.A., 11th Cir., 15-cv-15626, 10/4/16).

The ruling by the U.S. Court of Appeals for the Eleventh Circuit eases foreclosures in that circuit in two ways. First, it means that a debtor who discharges mortgage debt by surrendering property under 11 U.S.C. 521(a)(2) can’t oppose creditors who then try to foreclose in state court.

The decision also speeds that process. Judge William Pryor, who wrote for a three-judge panel, said bankruptcy courts can ...