IN RE: STOTZ CASE NO. 94-50832
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF KENTUCKY
IN RE: STOTZ
CASE NO. 94-50832
This case was heard by the court on October 26, 1994, on the motion of National City Bank, Kentucky, by counsel, pursuant to 11 U.S.C. § 362(d) for relief from stay and pursuant to 11 U.S.C. § 554(b) for an order of abandonment.
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It is not apparent how the bank can rely on language in a note and security agreement which the bank marked paid and surrendered to the debtor. The bank is relying on language in a document which is no longer part of its loan portfolio. The bank was required by statute to release its security interest in the motor vehicles in question once the debt thereon was satisfied. KRS 186.045, 186A.210.
As a result of the Loan Extension and Modification Agreement executed by the parties concurrently with the payoff of the January 29, 1993 note, the debtor was not in default on other obligations to the bank at the time the loan secured by the automobiles was satisfied. Subsequent default on other obligations should not entitle the bank to take advantage of its failure to comply with the law and release its liens on these automobiles.
By the court -
Joe Lee, Chief Judge