                                                          FILED
                                                           DEC 09 2011
 1
                                                       SUSAN M SPRAUL, CLERK
                                                         U.S. BKCY. APP. PANEL
 2                                                       OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )      BAP No. CC-11-1156-HKiMk
                                   )
 6   CHRISTOPHER DOLAN OBMANN and )       Bk. No. 11-12906
     REBECCA LYNN OBMANN,          )
 7                                 )
                     Debtors.      )
 8   _____________________________ )
                                   )
 9   SAN DIEGO COUNTY CREDIT UNION;)
     THERESA HALLECK,              )
10                                 )
                     Appellants,   )
11                                 )
     v.                            )      M E M O R A N D U M1
12                                 )
     CHRISTOPHER DOLAN OBMANN;     )
13   REBECCA LYNN OBMANN;          )
     CHRISTOPHER R. BARCLAY,       )
14   Chapter 7 Trustee; UNITED     )
     STATES TRUSTEE,               )
15                                 )
                     Appellees.    )
16   _____________________________ )
17                  Argued and Submitted on October 20, 2011
                            at San Diego, California
18
                            Filed - December 9, 2011
19
              Appeal from the United States Bankruptcy Court
20                for the Central District of California
21        Honorable Catherine Bauer, Bankruptcy Judge, Presiding
22
     Appearances:     William Arthur Smelko, Esq. argued for the
23                    Appellant, San Diego County Credit Union.
24
     Before: HOLLOWELL, KIRSCHER and MARKELL, Bankruptcy Judges.
25
26        1
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8013-1.
 1        San Diego County Credit Union (SDCCU) appeals an order of
 2   the bankruptcy court that (1) disapproved a reaffirmation
 3   agreement that SDCCU entered into with the debtors, (2) ordered
 4   SDCCU to accept the debtors’ payments, and (3) enjoined SDCCU
 5   from repossessing its collateral so long as the debtors made
 6   payments and otherwise fulfilled their obligations to SDCCU.
 7        For the reasons given below, we AFFIRM the disapproval of
 8   the reaffirmation agreement, but VACATE the portion of the
 9   bankruptcy court’s order that requires SDCCU to accept payments
10   and refrain from exercising its state law contractual remedies.
11                                I.   FACTS
12        Christopher and Rebecca Obmann (the Debtors) filed a joint
13   petition for relief under chapter 72 on January 28, 2011.    On
14   their bankruptcy schedules, the Debtors listed an $18,496.00
15   obligation to SDCCU secured by a 2004 Chevrolet Silverado
16   (Silverado).   They also listed a $7,003.00 obligation to SDCCU
17   secured by a 2004 Nissan Frontier (Nissan).   According to the
18   Debtors’ schedules I and J, they had a combined average monthly
19   income of $9,126.20 and expenditures of $9,938.00, which included
20   a $778.00 payment on the Silverado, as well as a $261.00 payment
21   on the Nissan.
22        Along with their schedules, the Debtors filed a Statement of
23   Intention with respect to the Silverado.   On the Statement of
24   Intention form (Official Form 8), the Debtors checked the box
25
26        2
            Unless otherwise indicated, all chapter and section
27   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
     All Rule references are to the Federal Rules of Bankruptcy
28   Procedure, Rules 1001-9037.

                                       -2-
 1   indicating that they intended to retain the Silverado, but did
 2   not check either the “Redeem the property” box or the “Reaffirm
 3   the debt” box.     Instead, the Debtors checked a box entitled
 4   “Other” and wrote “Retain and pay pursuant to contract.”    The
 5   Debtors indicated the same intention with respect to the Nissan.
 6        On February 3, 2011, the Debtors attempted to make a payment
 7   on the Silverado under their loan agreement with SDCCU (the
 8   Loan).   At that time, the Debtors were already behind on the Loan
 9   because they had failed, prepetition, to make their January
10   payment.    Under the terms of the Loan, a filing of a bankruptcy
11   proceeding, as well as a failure to make any payment when due,
12   were events of default, entitling SDCCU to accelerate all payment
13   on the Loan and to exercise its state law rights against the
14   Silverado, including repossession.
15        SDCCU refused to accept the Debtors’ February 3, 2011,
16   payment on the Loan.    It told the Debtors it would not accept
17   payments unless there was an enforceable reaffirmation agreement
18   in place.   On February 8, 2011, the Debtors and SDCCU executed an
19   agreement to reaffirm the debt secured by the Silverado (the
20   Reaffirmation).3    The Reaffirmation reaffirmed the $13,495.58
21   remaining balance on the Silverado under the original terms of
22   the Loan.   The Debtors listed the value of the Silverado as
23   $19,875.00.   They filed the executed Reaffirmation with the
24   bankruptcy court on February 14, 2011.
25        The § 341 meeting of creditors was scheduled for March 9,
26
          3
27          The Debtors filed a similar reaffirmation agreement for
     the Nissan. The Debtors’ attorney did not represent them with
28   respect to either of the reaffirmation agreements.

                                       -3-
 1   2011.       Also on March 9, 2011, the bankruptcy court held a hearing
 2   on whether to approve the Reaffirmation (the Reaffirmation
 3   Hearing).      At the Reaffirmation Hearing, the bankruptcy court
 4   expressed its concern that SDCCU, by refusing to accept payments,
 5   was purposely forcing debtors into defaulting on their loans
 6   until the court approved a reaffirmation agreement.      It continued
 7   the hearing to March 30, 2011, and entered an order requiring the
 8   president and CEO of SDCCU, Teresa Halleck (the CEO), to appear:4
 9           to explain its policies and procedures5 regarding
             bankruptcy, since it appears that either the Credit
10           Union fundamentally misunderstands the purpose and
11           extent of the automatic stay and/or that it is
             purposely forcing debtors into defaulting on their car
12           loans under some misconception that this Court will
             then be forced to approve reaffirmation agreements that
13           are not advisable (especially in view of the forced
14           defaults) . . . .

15
16
             4
17          On March 18, 2011, SDCCU filed an objection and an
     emergency ex-parte motion to modify the order to appear and
18   excuse the CEO from appearing. The declaration from SDCCU,
19   attached to its motion, explained its policies, as well as the
     Debtors’ history on the Loan, including the fact that the Debtors
20   were not current on their payments prior to filing bankruptcy.
     On March 25, 2011, the bankruptcy court denied SDCCU’s ex-parte
21
     motion. SDCCU and the CEO timely appealed. (BAP Nos. 11-1155,
22   11-1158). The BAP subsequently dismissed those appeals as moot
     on June 9, 2011, because the CEO appeared and testified at the
23   hearing.
24           5
            However, the bankruptcy court was aware of the reasons for
25   SDCCU’s policy because it had previously ordered SDCCU to appear
     in other cases to explain why SDCCU refused customers’ payments
26   prior to approval of a reaffirmation agreement. SDCCU’s
27   Assistant Vice President of Legal Services previously appeared
     before the bankruptcy court to testify about SDCCU’s
28   reaffirmation policy.

                                         -4-
 1        The Debtors appeared at the continued hearing but did not
 2   testify.   The CEO appeared and testified that SDCCU did not
 3   accept customer payments unless there was an enforceable
 4   agreement between the parties, otherwise she believed that SDCCU
 5   risked having to return any payments made if there was not a
 6   court-approved reaffirmation in effect.   The CEO further
 7   testified that SDCCU believed that a failure to obtain an
 8   enforceable reaffirmation would compromise SDCCU’s future ability
 9   to exercise its state law remedies.
10        The bankruptcy court disapproved the Reaffirmation as not in
11   the Debtors’ best interest because, despite reaffirming the debt,
12   they would still be exposed to potential repossession of the
13   Silverado due to payment defaults, which the bankruptcy court
14   apparently believed were solely the result of SDCCU’s refusal to
15   accept the Debtors’ postpetition payments.   On March 31, 2011,
16   the bankruptcy court entered an order disapproving the
17   Reaffirmation (Reaffirmation Order).6
18        In its Reaffirmation Order, the bankruptcy court found that
19   the Reaffirmation posed an undue hardship on the Debtors and was
20   not in their best interest.   Additionally, the Reaffirmation
21   Order stated that “SDCCU shall accept any and all payments that
22   Debtors are past due and shall have no right to repossess the
23
24        6
            An identical order was entered denying reaffirmation on
25   the Nissan. SDCCU did not appeal that order. However, at least
     one similar order that required SDCCU to be bound by the terms of
26   the original agreement with the debtor as long as the debtor made
27   payments, was entered by the bankruptcy court in a different case
     and was appealed by SDCCU. That appeal became moot when the
28   collateral was surrendered, and was subsequently dismissed.

                                     -5-
 1   subject vehicle so long as Debtors make their payments, keep the
 2   vehicle insured, and otherwise fulfill their obligations to
 3   SDCCU.”    SDCCU timely appealed.
 4                                II.    JURISDICTION
 5        The bankruptcy court had jurisdiction under 28 U.S.C.
 6   § 157(b)(2)(O).   We have jurisdiction under 28 U.S.C. § 158.
 7                                      III.     ISSUE
 8        Did the bankruptcy court err in entering the Reaffirmation
 9   Order?
10                          IV.    STANDARDS OF REVIEW
11        We review the bankruptcy court’s interpretation of the
12   Bankruptcy Code de novo.      Bankr. Receivables Mgmt. v. Lopez
13   (In re Lopez), 274 B.R. 854, 859 (9th Cir. BAP 2002), aff’d,
14   345 F.3d 701 (9th Cir. 2003), cert. denied, 124 S.Ct. 2015
15   (2004); Dumont v. Ford Motor Credit Co. (In re Dumont),
16   383 B.R. 481, 484 (9th Cir. BAP 2008), aff’d, 581 F.3d 1104 (9th
17   Cir. 2009).    The requisite procedure for issuing injunctions is a
18   question of law that we review de novo.             Demos v. Brown
19   (In re Graves), 279 B.R. 266, 270 (9th Cir. BAP 2002).
20   Additionally, whether adequate due process was given in a
21   particular instance is a mixed question of law and fact that we
22   also review de novo.    Id.
23        The bankruptcy court’s factual findings are reviewed for
24   clear error.   United States v. Hinkson, 585 F.3d 1247, 1262-63
25   (9th Cir. 2009) (en banc).         A factual finding is clearly
26   erroneous if it is illogical, implausible, or without support in
27   inferences that can be drawn from the facts in the record.           Id.
28   at 1263.

                                               -6-
 1                               V.   DISCUSSION
 2        An individual debtor in a chapter 7 case is required to
 3   timely redeem, surrender, or reaffirm debts secured by personal
 4   property.    11 U.S.C. § 521(a)(2).      Section 521(a)(2) requires
 5   that for every debt secured by personal property of the estate, a
 6   debtor must file a statement of intention with respect to the
 7   retention or surrender of the property.       The debtor must file his
 8   statement of intention within 30 days of the filing of a petition
 9   or before the first date scheduled for the meeting of creditors,
10   whichever is earlier.   When a debtor elects to retain the
11   property, he must specify in his statement of intention whether
12   he will redeem it or reaffirm the debt secured by the property.
13   11 U.S.C. § 521(a)(2)(A).    Additionally, the debtor must perform
14   on his stated intention within 30-days of the § 341 meeting of
15   creditors.   11 U.S.C. § 521(a)(2)(B).
16        A failure to comply with the requirements of § 521(a)(2)(A)
17   and (B) results in the termination of the automatic stay “with
18   respect to personal property of the estate or of the debtor
19   securing in whole or in part a claim, . . . and such property
20   shall no longer be property of the estate.”       11 U.S.C.
21   § 362(h)(1); Samson v. W. Capital Partners, LLC (In re Blixseth),
22   454 B.R. 92 (9th Cir. BAP 2011) (the exception to the rule is if
23   on the bankruptcy trustee’s timely motion the bankruptcy court
24   determines the property is of consequential value to the estate).
25        In this case, the Debtors filed a statement of intention and
26   indicated that they intended to retain the Silverado.         However,
27   the Debtor’s statement of intention did not state whether they
28   intended to redeem the Silverado or reaffirm the Loan.

                                        -7-
 1   Therefore, the Debtors failed to comply with § 362(h)(1)(A).    See
 2   e.g., In re Steinhaus, 349 B.R. 694, 701 (Bankr. D. Idaho 2006).
 3   SDCCU argues, therefore, that the automatic stay terminated at
 4   the time the bankruptcy court held the Reaffirmation Hearing.
 5        Nevertheless, SDCCU concedes that the bankruptcy court had
 6   jurisdiction to review the Reaffirmation.   Consequently, we need
 7   not decide whether the automatic stay was, in fact, terminated at
 8   the time of the Reaffirmation Hearing, or, whether a debtor may
 9   amend his original intention prior to the time he must perform on
10   that intention and thereby cure any previous defect.   See e.g.,
11   In re Norton, 347 B.R. 291, 296-98 (Bankr. E.D. Tenn. 2006)
12   (finding termination of automatic stay could not occur until the
13   deadline of § 521(a)(2)(B) had passed); Arizona Fed. Credit Union
14   v. DeSalvo, 2009 WL 5322428 *3 (Bankr. S.D. Ga. 2009); In re
15   Bower, 2007 WL 2163472 *2 n.2 (Bankr. D. Or. 2007) (an improper
16   statement of intention can be “cured” by a timely filed
17   reaffirmation agreement); In re Baker, 390 B.R. 524, 529 (Bankr.
18   D. Del. 2008) (same).
19        Debtors may reaffirm dischargeable debts.   11 U.S.C. § 524.
20   However, in order to protect debtors from compromising their
21   fresh start by making unwise agreements to repay such debts, the
22   Bankruptcy Code sets out various procedures and requirements for
23   approval of reaffirmation agreements.   Id.; Gordon v. Hines
24   (In re Hines), 147 F.3d 1185, 1190 (9th Cir. 1998); Rogers v.
25   NationsCredit Fin. Servs. Corp., 233 B.R. 98, 107 (N.D. Cal.
26   1999).   These include requiring creditors to make detailed
27   disclosures of the legal ramifications of reaffirmation.
28   11 U.S.C. § 524(k).   Additionally, when, as here, the debtor is

                                     -8-
 1   not represented by an attorney, the bankruptcy court must inform
 2   the debtor that reaffirmation is not required, describe the legal
 3   consequences of reaffirming a debt, and decide whether
 4   reaffirmation is in the debtor’s best interest or poses an undue
 5   hardship.    11 U.S.C. § 524(d), (c)(6).
 6           Section 524(m)(1) raises a rebuttable presumption that a
 7   reaffirmation agreement imposes an undue hardship on the debtor
 8   when the debtor’s monthly income, less the debtor’s monthly
 9   expenses, is less than the scheduled payments on the reaffirmed
10   debt.    11 U.S.C. § 524(m)(1).   The bankruptcy court is required
11   to review all agreements, regardless of whether a debtor is
12   represented or appearing in pro se, when the presumption of undue
13   hardship exists; however, the presumption is waived when the
14   creditor of a reaffirmed debt is a credit union.    11 U.S.C.
15   § 524(m)(2).
16           Even though there was no presumption of undue hardship that
17   required rebuttal by the Debtors, because they were
18   unrepresented, the bankruptcy court was required to decide
19   whether the Reaffirmation imposed an undue hardship and was in
20   their best interest.    11 U.S.C. § 524(c)(6)(A)(i),(ii); Coastal
21   Fed. Credit Union v. Hardiman, 398 B.R. 161, 178 (E.D. N.C.
22   2008); In re Smith, 2011 WL 671994 *1 (Bankr. N.D. Iowa 2011);
23   In re Huskinson, 2008 WL 2388113 *2 n.7 (Bankr. N.D. Ohio 2008).
24           To that end, the bankruptcy court found that the payments on
25   the Silverado were large and that the Debtors’ expenses
26   significantly exceeded their income making it an undue hardship
27   on the Debtors.    Furthermore, the bankruptcy court found it was
28   not in the Debtors’ best interest to reaffirm the debt because

                                       -9-
 1   there was no assurance that SDCCU would honor a purported verbal
 2   agreement to work with the Debtors to cure any default, and
 3   reaffirmation would make the Debtors personally liable for any
 4   deficiency balance on the Loan.
 5         These findings were supported by the record.        The Debtors’
 6   schedules demonstrated that their expenses significantly exceeded
 7   their income.   The record, including the testimony provided by
 8   the CEO, demonstrated that the Debtors had defaulted on the Loan,
 9   and that as a result of those defaults, SDCCU was entitled to
10   enforce its rights under the Loan.        Accordingly, we perceive no
11   error in the bankruptcy court’s decision in disapproving the
12   Reaffirmation under § 524(c)(6)(A)(i) and (ii).
13         SDCCU contends that even though the bankruptcy court could
14   disapprove the Reaffirmation under § 524(c)(6)(A), it could not
15   enjoin SDCCU from enforcing its rights under the Loan.        SDCCU
16   particularly assigns error to the bankruptcy court’s issuance of
17   an injunction without an adversary proceeding.
18         SDCCU contends that the issuance of injunctive relief and
19   declaratory relief may only result from an adversary proceeding.
20   Rule 7001, 7065.   SDCCU relies on case authority where a
21   bankruptcy court was asked to grant injunctive relief.        We agree
22   that in those situations, the request must procedurally be made
23   through an adversary proceeding.         However, SDCCU’s premise that
24   an adversary proceeding is always required before an injunction
25   can by issued by a bankruptcy court is belied by the plain
26   ///
27   ///
28   ///

                                       -10-
 1   language of § 105(a)7, which allows the bankruptcy court to act
 2   sua sponte to issue any order that is necessary to carry out the
 3   provisions of the Bankruptcy Code.       11 U.S.C. § 105(a).
 4        Therefore, “[i]njunctive relief is available in bankruptcy
 5   court in two ways: pursuant to the court’s discretionary and
 6   inherent equitable power under section 105(a) ‘to issue any
 7   order, process, or judgment that is necessary or appropriate to
 8   carry out the provisions of this title,’ or under the auspices of
 9   Bankruptcy Rule 7065.”    Rinard v. Positive Invest., Inc.
10   (In re Rinard), 451 B.R. 12, 22 (Bankr. C.D. Cal. 2011); Eisen v.
11   Golden (In re Eisen), 2006 WL 6810928 (9th Cir. BAP 2006)
12   (unpublished).
13        The bankruptcy court did not cite to § 105(a) as the basis
14   of its authority, but we presume that it relied on its equitable
15   powers when it required SDCCU to accept payments and to suspend
16   its state law contractual rights to the Silverado.      While
17   § 105(a) permits the bankruptcy court to impose injunctions,
18   there are limitations on that power.      In re Graves, 279 B.R. 266
19   at 274.    First, when acting in a matter that ordinarily requires
20   an adversary proceeding, the bankruptcy court must assure that
21
          7
22            Section 105(a) provides that:

23        [t]he court may issue any order, process, or judgment
          that is necessary or appropriate to carry out the
24
          provisions of this title. No provision of this title
25        providing for the raising of an issue by a party in
          interest shall be construed to preclude the court from,
26        sua sponte, taking any action or making any
27        determination necessary or appropriate to enforce or
          implement court orders or rules, or to prevent an abuse
28        of process.


                                      -11-
 1   the defendant is afforded the procedural protection of due
 2   process.   Id. at 272.   Second, the remedy must conform to the
 3   objectives of the Bankruptcy Code.      Id.; Beck v. Fort James Corp.
 4   (In re Crown Vantage, Inc.), 421 F.3d 963, 975 (9th Cir. 2005).
 5        Due process requires a notice and an opportunity to be
 6   heard.   Tennant v. Rojas (In re Tennant), 318 B.R. 860, 870 (9th
 7   Cir. BAP 2004).   “Notice and an opportunity to be heard” is a
 8   flexible concept that depends on what is appropriate in the
 9   particular circumstance.   Id.   At a minimum, however, notice must
10   be “reasonably calculated, under all of the circumstances, to
11   apprise interested parties of the pendency of the action and
12   afford them an opportunity to present their objections.”     Mullane
13   v. Central Hanover Bank & Trust, Co., 339 U.S. 306, 314 (1956).
14   Here, SDCCU was provided notice of the bankruptcy court’s concern
15   that SDCCU misunderstood “the purpose and extent of the automatic
16   stay and/or that it is purposely forcing debtors into defaulting
17   on their car loans under some misconception that this Court will
18   then be forced to approve reaffirmation agreements that are not
19   advisable (especially in view of the forced defaults).”     SDCCU
20   was given the opportunity to be heard with respect to that
21   concern when the CEO testified about SDCCU’s policies and
22   procedures.8   Accordingly, SDCCU was afforded the requisite due
23
24
          8
            The record demonstrated that the bankruptcy court had
25   ordered SDCCU to appear before it in the past to discuss its
26   policies and position regarding its non-acceptance of payments
     before a reaffirmation becomes enforceable. Therefore, SDCCU was
27   aware of the bankruptcy court’s concerns. Moreover, the
     bankruptcy court had entered orders similar to the Reaffirmation
28   Order in at least two prior cases involving SDCCU.

                                      -12-
 1   process prior to the entry of the bankruptcy court’s
 2   Reaffirmation Order.
 3        Nevertheless, the bankruptcy court acted outside the limits
 4   of its § 105(a) authority because it imposed a remedy that was
 5   not contemplated by the Bankruptcy Code.       Bankruptcy courts have
 6   “broad authority” under § 105(a) to take action necessary to
 7   prevent an abuse of process.    Marrama v. Citizens Bank of Mass.,
 8   549 U.S. 365, 375 (2007).   Indeed, that power has been used to
 9   craft various remedies for a range of conduct.       See In re Kmart
10   Corp. 359 F.3d 866, 871 (7th Cir. 2004) (compiling cases).
11   Nevertheless, § 105(a) does not allow “free-floating discretion
12   in accordance with the court’s personal views of justice and
13   fairness” (Id. at 871) or amount to “a roving commission to do
14   equity.”   Saxman v. Educ. Credit Mgmt. Corp. (In re Saxman), 325
15   F.3d 1168, 1174 (9th Cir. 2003).        A bankruptcy court may only
16   exercise its equitable power as a means to fulfil some specific
17   provision within the Bankruptcy Code.       Marrama v. Citizens Bank
18   of Mass., 549 U.S. at 382 (citing N.W. Bank Worthington v.
19   Ahlers, 485 U.S. 197, 206 (1988)).        Its authority may be invoked
20   “only if, and to the extent that, the equitable remedy dispensed
21   by the court is necessary to preserve an identifiable right
22   conferred elsewhere in the Bankruptcy Code.”       Jamo v. Katahdin
23   Fed. Credit Union (In re Jamo), 283 F.3d 392, 403 (1st Cir. 2002)
24   (internal citations omitted).
25        The bankruptcy court did not identify any Bankruptcy Code
26   section to support its conclusion that SDCCU had to accept
27   payments that were tendered by a debtor.       The bankruptcy court’s
28   statements on this issue included:

                                      -13-
 1          “[I]f I don’t approve a reaffirmation where the people
            have been trying to make the payments, you’re going to
 2          go pick up the car unless they pay it off? . . . it’s
 3          not compliant with federal bankruptcy law.”

 4   Hr’g Tr. (March 31, 2011) at 12:2-5, 16-17.
 5   and,
 6
            “[Y]ou are purposefully putting people in default . . .
 7          And I don’t think that’s a good thing to do. I don’t
            think it’s a good policy.”
 8
 9          Id. at 12:21-22, 13:1-2.

10              Section 524(l) provides that a creditor “may accept”
11   payments from a debtor before and after the filing of a
12   reaffirmation agreement.       However, a creditor does not violate
13   the Bankruptcy Code by refusing to accept payments tendered by a
14   debtor.       Additionally, we did not find any other federal law
15   that may apply.       For example, we reviewed provisions regarding
16   creditor/debtor relationships, including payments on debt
17   obligations, contained in the Truth In Lending Act (TILA).        See
18   15 U.S.C. § 1601 et. seq.       While TILA provides that a creditor
19   shall credit a payment9 to a consumer’s account as of the date
20   of receipt, it allows the creditor to specify reasonable
21   requirements for conforming payments, which can include
22   designating certain procedures, or cut off times, for payments.
23   Id. Implementing Regulation Z, 12 C.F.R. § 226.10.       We found
24
25
26          9
            A “payment” presumes that the debtor delivered money in
27   performance of an obligation and that the creditor accepted it as
     extinguishing that performance in whole or in part. 1129 Black’s
28   Law Dictionary, 6th ed. 1990.

                                         -14-
 1   nothing within TILA that requires a creditor to accept the
 2   tender.
 3        We also did not find other federal banking laws that
 4   include provisions regarding payment obligations between
 5   creditors and debtors.   Neither do we find any California law
 6   that requires a creditor to accept payments tendered to it.      In
 7   any event, the bankruptcy court could not use its § 105 powers
 8   to implement state law unless there was also a comparable
 9   objective set out in the Bankruptcy Code.
10        In this case, the Debtors were in default on the Loan
11   prepetition.   By requiring that SDCCU accept the Debtors’
12   payments and refrain from exercising its state law rights under
13   the Loan, the bankruptcy court ordered SDCCU to accept a cure of
14   the Debtors’ default.    Such authority is beyond the reach of the
15   bankruptcy court.   In re Jamo, 283 F.3d at 403 (court lacked
16   power to modify proposed reaffirmation arrangement and compel
17   credit union to enter into judicially-crafted reaffirmation
18   agreement).
19        SDCCU makes a final argument that the bankruptcy court’s
20   injunction effects an impermissible expansion of the discharge
21   injunction or the automatic stay that is not intended by the
22   Bankruptcy Code.    It asserts that the bankruptcy court
23   “expressly [stated] that if the Debtors wanted to return the
24   vehicle at some point in the future, the Debtors could also
25   demand their payments on this ‘discharged debt’ back from SDCCU
26   and SDCCU would be obligated to return the payments.”      See
27   Appellant’s Opening Brief at 20.       However, neither the record
28   nor the terms of the Reaffirmation Order supports SDCCU’s

                                     -15-
 1   assertion.   Whether a discharged debt that is voluntarily paid
 2   by a debtor must later be refunded is not at issue in this
 3   appeal, and therefore, will not be addressed.10
 4                            VI.   CONCLUSION
 5         The bankruptcy court did not abuse its discretion in
 6   denying the Reaffirmation; however, it acted beyond its
 7   authority in ordering SDCCU to accept a cure of the Debtors’
 8   default on the Loan and enjoining SDCCU from pursuing its state
 9   law remedies.   Therefore, we AFFIRM the bankruptcy court’s
10   disapproval of the Reaffirmation, but VACATE the portion of the
11   Reaffirmation Order that orders SDCCU to accept the Debtors’
12   payments, and that enjoins SDCCU from repossessing the Silverado
13   so long as the Debtors make payments and otherwise fulfill their
14   obligations to SDCCU.
15
16
17
18
19
20
          10
21          At most, the bankruptcy court referenced the possibility,
     but never decided the issue. It stated:
22
23        I worked at Bank of America for 16 years, and we always
          took payments. Always took payments. We always took
24
          payments. Once in a while when somebody would say:
25        Look, I decided I’m not going to reaffirm, we gave the
26        money back. But I will tell you, we made a lot more
          money by taking the payments than we ever lost by
27
          giving back money.
28   Hr’g Tr. (March 31, 2010) at 14:21-25; 15:1-2.


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