                               In the

     United States Court of Appeals
                 For the Seventh Circuit
No. 13-1187


In re:
TODD LAMONT and CHRISTINA
LAMONT,

                                                   Debtors-Appellees.
Appeal of:

LYUBOMIR ALEXANDROV



         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
          No. 12-CV-2481 — Harry D. Leinenweber, Judge.


  ARGUED SEPTEMBER 19, 2013 — DECIDED JANUARY 7, 2014


   Before MANION, KANNE, and SYKES, Circuit Judges.
     MANION, Circuit Judge. If an owner of real property in
Illinois does not timely pay his county property taxes, the
county may “sell” the property to a third party, often called a
tax purchaser. The tax purchaser does not receive title to the
property, but rather receives a “Certificate of Purchase” which
can be used to obtain title to the property if the delinquent
2                                                    No. 13-1187

taxpayer does not redeem his property within about two years.
At issue in this case is how the tax purchaser’s interest is
treated when the property owner enters bankruptcy during the
redemption period. The bankruptcy court held that, when
there is still time to redeem, the tax purchaser’s interest is a
secured claim that is treatable in bankruptcy and modifiable in
a debtor’s Chapter 13 plan. The district court agreed. The
holder of the Certificate of Purchase, Lyubomir Alexandrov,
appeals, objecting to the treatment of his interest as a claim and
arguing that he should be permitted to obtain a tax deed to the
debtors’ home. We affirm.
                      I. Factual Background
    Illinois Property Tax System
    Because this case concerns an interest created by Illinois’
property tax code, we begin with a brief overview of the
system. Illinois property taxes are due the year after the year
in which they accrue, and a lien in favor of the county automat-
ically arises at the beginning of the year in which the taxes
accrue. See Jeffrey S. Blumenthal & David R. Gray, Jr., Tax Bills
and Payments; Tax Sales and Redemptions; Miscellaneous Collection
and Enforcement Matters and A Guide to Tax Deed and Indemnity
Fund Proceedings, Chapters 10 & 11 in Real Estate Taxation
§ 10.3 (IICLE 2012) (hereinafter, “Real Estate Taxation”); 35
ILCS 200/21-75. If the taxes are paid, the county’s lien is
extinguished; if the taxes are not paid, Illinois law provides
various methods for recovering delinquent taxes. While the
county may foreclose on its tax lien, the most common method
to collect delinquent taxes is via one of the “tax sale” methods
provided by the property tax code. Real Estate Taxation at
No. 13-1187                                                            3

§ 10.20. First, the county applies for a judgment and order of
sale against the property. Once a judgment and order of sale is
obtained, the county may “sell the property” at a tax sale. One
particular type of tax sale is called the “annual sale,” where
properties with at least one year of delinquent taxes are sold to
the public. (For example, properties with taxes incurred in 2010
and due but unpaid in 2011 will be sold at the 2012 annual
sale). When the property is sold at an annual sale, the tax
purchaser pays all taxes due on the property, the county loses
its lien, and the tax purchaser receives a “Certificate of Pur-
chase.”1
   What happens next depends on the actions of the delin-
quent taxpayer and the tax purchaser. The taxpayer has two
years to redeem the property—two and a half years if the
property is a home. 35 ILCS 200/21-350. The tax purchaser
may, however, extend the period to three years total. 35 ILCS
200/21-385.2 During the redemption period, the taxpayer can
redeem the property by paying the tax purchaser, through the
county clerk, all amounts due (which includes everything the
tax purchaser paid to the county plus any penalty interest).


1
  Properties with two or more years of delinquent taxes may be sold at a
“Scavenger Sale,” where the tax purchaser may pay less than all the taxes
due on the property. Real Estate Taxation § 10.32.

2
  During the redemption period, other taxes will come due. Those taxes
may be paid by the property owner or the tax purchaser. If the tax
purchaser pays the subsequent taxes, the redemption amount will increase
correspondingly. The tax purchaser must satisfy any delinquent taxes
before obtaining a tax deed. If the property owner pays the subsequent
taxes, the redemption amount remains the same. See Real Estate Taxation
§§ 10.12, 11.8. Here, the property owners paid their subsequent taxes.
4                                                     No. 13-1187

Three to six months before the redemption period expires, the
tax purchaser must file a petition for a tax deed in the circuit
court of the county where he acquired the Certificate of
Purchase. He must also give notice of the expiration of the
redemption period to the taxpayer and anyone else with an
interest in the property. See 35 ILCS 200/22-10, 22-30. The
taxpayer, of course, may still redeem his property while the
petition is pending, so long as the redemption period has not
run. Once the redemption period has run, the taxpayer cannot
redeem the property. At that point the tax purchaser has one
year to act on its petition by applying for “an order on the
petition that a [tax] deed be issued,” taking that order to the
county clerk to obtain a tax deed, and recording the tax deed.
If these steps are not completed within a year, the tax pur-
chaser loses his interest and the taxpayer keeps the property.
35 ILCS 200/22-30, 22-40, 22-85. If, however, there is an order
of a court preventing the tax purchaser from applying for an
order to issue a tax deed—such as the automatic stay in a
bankruptcy proceeding—the one-year period is tolled. 35 ILCS
200/22-85. If the obstacle to obtaining the order is lifted, the tax
purchaser may do so in the time that remains. If the tax
purchaser obtains and records a tax deed, he becomes the
owner of the property outright and all outstanding liens and
mortgages are extinguished. See 35 ILCS 200/22-55.
    However, under certain circumstances, the tax purchaser
has another option. Instead of seeking a tax deed, he may
apply to the county circuit court for a declaration that the tax
sale was a “sale in error” for a reason listed in the statute. See
35 ILCS 200/21-310. One such reason is that the taxpayer
petitioned for bankruptcy after the tax sale and before the
No. 13-1187                                                               5

county issued a tax deed. 35 ILCS 200/21-310(b)(1). Under
those circumstances, the circuit court will declare the sale to be
a sale in error. Id. When the circuit court has done so, the tax
purchaser is reimbursed by the county for everything he paid,
plus interest (either at the penalty rate or a statutory rate of
12% per year, whichever is lower). 35 ILCS 200/21-315. The
statute does not indicate whether the tax purchaser must seek
a sale-in-error declaration within a certain period of time after
learning of the taxpayer’s bankruptcy. Apparently—and to the
chagrin of the Clerk of Cook County (who has filed an amicus
brief in this matter)—the tax purchaser can wait until just
before the deadline to obtain a deed (which may be tolled) to
seek a sale-in-error declaration, accruing interest at the
county’s expense the entire time.
    Facts of This Case
    In this case, Todd and Christina LaMont (the “debtors” or
“taxpayers”) own a home in the Village of Minooka in Grundy
County, Illinois. The Village levied a special assessment in
relation to some local improvements.3 The debtors did not
timely pay these taxes. In November 2008, Grundy County
sold the debtors’ property at an annual sale to Advantinet,
which assigned its interest to Lyubomir Alexandrov. In
December 2008, the debtors filed a voluntary Chapter 13
bankruptcy petition. It is not clear when Alexandrov first
received notice of the bankruptcy proceeding because the


3
  Special assessments owed to a municipality are treated like taxes in every
way that is relevant to this appeal. For convenience, we refer to the
assessments in this case as “taxes” and to the government entity as the
“county.”
6                                                     No. 13-1187

debtors listed the Village of Minooka as the creditor for their
unpaid taxes in their bankruptcy petition.
    With or without knowledge of the debtors’ bankruptcy,
Alexandrov filed a petition for a tax deed on August 2, 2011.
When the redemption period expired on January 13, 2012, he
applied for an order directing the county clerk to issue a tax
deed. However, the circuit court would not enter the order
while the debtors’ bankruptcy was pending (so Alexandrov
learned of the debtors’ bankruptcy then, if not earlier). On
January 26, 2012, Alexandrov made his first filing in bank-
ruptcy court, moving for a declaration that the automatic stay
in the debtors’ case did not prevent him from obtaining a tax
deed, or alternatively, for a modification of the automatic stay
to permit him to obtain a tax deed. By that time, the debtors’
Chapter 13 plan had been confirmed for nearly three years and
the plan had provided for payment of the delinquent taxes
directly to the Village of Minooka in installments (without
paying any interest).
    The bankruptcy court denied Alexandrov’s motion,
following a line of decisions that treat a tax purchaser’s interest
as a secured claim (a tax lien). See In re Kasco, 378 B.R. 207, 211
(Bankr. N.D. Ill. 2007); In re Bates, 270 B.R. 455, 465 (Bankr. N.D.
Ill. 2001). Accordingly, the bankruptcy court held that
Alexandrov’s interest had been adequately treated in the plan
and the automatic stay did (and should) apply to prevent him
from obtaining a tax deed. Alexandrov immediately moved for
reconsideration and, for the first time, argued that the auto-
matic stay and the debtors’ plan should not apply to him
because he was prejudiced by the debtors’ failure to notify him
of the bankruptcy proceeding. The bankruptcy court saw this
No. 13-1187                                                             7

motion as an inappropriate attempt to add an argument for
appeal and denied the motion. Alexandrov appealed the
bankruptcy court’s decision to the district court, which
affirmed and also rejected his notice objection. In re LaMont,
487 B.R. 488, 498 (N.D. Ill. 2012). Alexandrov appeals, arguing
that the lower courts improperly characterized his interest as
a claim and, accordingly, erred in denying his motion to either
modify the automatic stay or declare that it did not apply.
    At oral argument, the parties informed us that the debtors’
Chapter 13 plan was a success; they made all payments
pursuant to the plan. Accordingly, if Alexandrov’s interest was
properly treated as a secured claim, the debtors have satisfied
their obligation. See 11 U.S.C. § 1327. If, however, as
Alexandrov argues, his interest is not a claim (and therefore
not treatable in bankruptcy), then he would be entitled to
attempt to obtain a tax deed and take the debtors’ home.4
                              II. Discussion
   In a Chapter 13 bankruptcy, the debtors propose and the
court confirms a plan to provide for the financial recovery of
the debtors by ordering, organizing, and modifying their
payments to their creditors. If the debtors follow the plan, they
will be discharged of any liabilities completely treated in the
plan. Other liabilities, such as home mortgages, will be made
current under the plan and will continue after the plan is


4
  We do not know whether Alexandrov ever received the money that the
debtors paid to the Village of Minooka nor do we know whether
Alexandrov ever sought a sale in error. Alexandrov has focused on his
argument that his interest was not a claim that could be modified and paid
in installments and that he need not seek a sale in error.
8                                                             No. 13-1187

finished.5 Creditors of the debtors are bound by the provisions
of a confirmed plan. 11 U.S.C. § 1327(a). During the pendency
of the bankruptcy, the automatic stay operates to prevent
creditors from cutting in line to take property that will be
treated in the plan. The automatic stay does so by explicitly
forbidding many methods of taking property from the bank-
ruptcy estate. See 11 U.S.C. § 362. Accordingly, if Alexandrov’s
attempt to obtain a tax deed is an attempt to take property that
belongs to the bankruptcy estate, the stay applies. See Id. at
§ 362(a)(3), (4), (5) (forbidding “any act to obtain possession of
property of the estate,” “any act to … enforce any lien against
property of the estate,” and “any act to … enforce against
property of the debtor any lien”). Further, if Alexandrov is a
creditor of the debtors, then he is bound by how their plan
treats his claim, making modification of the stay inappropri-
ate.6
    Alexandrov argues that his interest is a real property
interest that automatically divests the debtors of title to their
home after the redemption period expires (an executory
interest), and therefore, modification is appropriate even if the
stay applied.7 Accordingly, whether the interest represented by

5
 At the time of the filing of debtors’ petition, their home was encumbered
by two mortgages.

6
  A creditor is an “entity that has a claim against the debtor.” 11 U.S.C. §
101(10).

7
  See 11 U.S.C. § 362(a)(2)–(5). Alexandrov also argues that if his executory
interest theory is correct, getting a deed to the debtors’ home is merely
“perfection” of his interest and does not violate the automatic stay. See 11
                                                                (continued...)
No. 13-1187                                                                    9

Alexandrov’s Certificate of Purchase is a claim against debtors’
property—or whether it is instead a kind of real property
interest—is the central dispute in this appeal.
    Fortunately, the bankruptcy code provides a definition of
“claim” to guide our analysis. A claim is:
      (A) right to payment, whether or not such right is
      reduced to judgment, liquidated, unliquidated,
      fixed, contingent, matured, unmatured, disputed,
      undisputed, legal, equitable, secured, or unsecured;
      or
      (B) right to an equitable remedy for breach of perfor-
      mance if such breach gives rise to a right to pay-
      ment, whether or not such right to an equitable
      remedy is reduced to judgment, fixed, contingent,
      matured, unmatured, disputed, undisputed, se-
      cured, or unsecured.
11 U.S.C. § 101(5)8. The Supreme Court has “explained that
Congress intended by this language to adopt the broadest
available definition of ‘claim.’” Johnson v. Home State Bank, 501
U.S. 78, 83 (1991) (quoting Penn. Dept. of Pub. Welfare v. Daven-
port, 495 U.S. 552, 558, 563-64 (1990)). For example, in Johnson


7
  (...continued)
U.S.C. § 362(b)(3) (permitting perfection). That argument fails because it is
based on an unreasonable interpretation of “perfection.” See In re Bates, 270
B.R. at 468 (noting that perfection is a matter of priority of secured creditors,
not obtaining ownership).

8
  The phrase “‘claim against the debtor’ includes claim[s] against property
of the debtor.” 11 U.S.C. § 102(2).
10                                                    No. 13-1187

the Supreme Court held that a non-recourse mortgage was a
claim because, even though the debtor was not personally
liable if the mortgage was not paid, the bank could still
foreclose on the house (an equitable remedy) and had a right
to the proceeds from the sale of the debtor’s home (a right to
payment). This was so because “‘right to payment’ [means]
nothing more nor less than an enforceable obligation … .”Id.
(citing Davenport, 495 U.S. at 559). In Davenport, the Supreme
Court held that a criminal defendant’s restitution obligation
was a liability on a claim that could be discharged in bank-
ruptcy. The court reasoned that, despite the lack of a tradi-
tional creditor-debtor relationship, the interest in restitution
was nonetheless a “right to payment” because it was an
obligation to pay that could be enforced by incarcerating the
defendant. Davenport, 495 at 559. Against this backdrop, we
consider Alexandrov’s arguments.
     A. A Certificate of Purchase Does Not Represent an
        Executory Interest
    Alexandrov argues that when his interest was created at the
time of the tax sale, it was a kind of future interest in real
property, specifically, an executory interest. See Restatement
(First) Property § 25, 158 (1936). Correspondingly, he argues
that the taxpayers retained only a fee simple determinable, and
therefore, that we should treat the real property in this case like
we have treated real property that had been sold at a mortgage
foreclosure sale. See Restatement (First) Property §§ 23, 44
(1936). There are two significant—and related—problems with
Alexandrov’s theory.
No. 13-1187                                                     11

    First, the decision Alexandrov relies on for the notion that
a tax purchaser holds an executory interest, Jackson v. Midwest
P’ship, 176 B.R. 156 (N.D. Ill. 1994), created the idea without
any compelling authority. The court in Jackson looked to the
judgment and sale that compose the tax sale procedure and
observed that the holder of the Certificate of Purchase may
eventually obtain title to the property and has some rights in
the meantime. See Jackson, 176 B.R. at 158 (citing the
predecessor to 35 ILCS 200/21-80 (permitting the tax purchaser
to petition for a receiver to prevent waste)). The court surmised
that the tax purchaser had more rights than a mere lien holder.
Id. Ultimately, the court concluded that those extra rights
suggested that the tax purchaser held an executory interest. Id.
     However, we cannot assume that the Supreme Court of
Illinois would hold that a tax purchaser’s interest is a future
interest in real property when the state statutory framework
and decades of state court decisions say otherwise. See Butner
v. United States, 440 U.S. 48, 55–56 (1979) (holding that state law
governs the creation and definition of property rights). Illinois
courts have consistently treated the tax purchaser’s interest as
a tax lien. See Application of Cnty. Treasurer of Cook Cnty.
(Wiebrecht v. City of Chicago), 304 N.E.2d 9, 12 (Ill. App. Ct.
1973); City of Chicago v. City Realty Exchange, Inc., 262 N.E.2d
230, 233 (1970)). In City Realty, the Illinois Appellate Court
explicitly held that a Certificate of Purchase was a lien for taxes
in determining whether the tax purchaser had priority over a
demolition lien. City Realty, 262 N.E.2d at 232–33. The Illinois
Appellate Court reaffirmed this ruling in Wiebrecht while
holding that a statute requiring a tax purchaser to satisfy
12                                                           No. 13-1187

subordinate demolition liens was not retroactive. Wiebrecht, 304
N.E.2d at 12–13.9
     Alexandrov argues that Illinois courts have reversed course
on that position and cites Application of Cnty. Collector (Howell
v. Edelen), 383 N.E.2d 1224 (Ill. App. Ct. 1978), for the proposi-
tion that the tax purchaser has a “property right in the said real
estate subject to redemption,” not a tax lien. Id. at 1231.
However, the court in Howell did not repudiate either Wiebrecht
or City Realty. Indeed, Howell cites Wiebrecht as the sole support
for the language upon which Alexandrov relies. Howell, 383
N.E.2d at 1231 (citing Wiebrecht, 304 N.E.2d at 12). So when the
Illinois Appellate Court says that a tax purchaser has a
“property right” in the real estate, Howell, 383 N.E.2d at 1231,
the court means a “species of personal property, a lien for taxes.”
Wiebrecht, 304 N.E.2d at 12 (emphasis added). More recently,
the Illinois Appellate Court reemphasized that a “tax certifi-
cate, prior to its redemption and issuance of a tax deed, is a
mere species of personal property, and does not give its
purchaser any equity or title to the property” and “a certificate
holder has no real property interest in the land until the
certificates have been redeemed and the petition for a tax deed
has been granted.” Petition of Conrad Gacki Profit Sharing Fund
(PJA Investments, Ltd. v. Conrad Gacki Profit Sharing Fund), 634
N.E.2d 1281, 1282–83 (1994) (citing Wells v. Glos, 115 N.E. 658
(Ill. 1917)). In fact, to the extent the Illinois Appellate Court has


9
  Ordinarily, a subordinate lien is eliminated without satisfaction when a
tax purchaser obtains a tax deed. See Lincoln Park Fed. Sav. & Loan Ass’n v.
DRG, Inc., 529 N.E.2d 771, 772 (Ill. App. Ct. 1988); 35 ILCS 200/22-55; Real
Estate Taxation § 11.20.
No. 13-1187                                                                 13

recognized any interest in the real property, it has been limited
to those rights conferred statutorily by the Illinois property tax
code. See In re Application of Cnty. Collector (Edward Scott, LLC
v. Nadine Sackor), 909 N.E.2d 337, 340–42 (Ill. App. Ct. 2009)
(cataloguing statutory rights and concluding that, because of
those rights, a tax purchaser had enough “interest[] in the
property”). The Illinois Appellate Court in Edward Scott
referred to the broad language of Conrad Gacki as dicta, but
only rejected that dicta to the extent the court in Edward Scott
concluded that the statutory framework gave a tax purchaser
enough interest in the property to be entitled by statute to
notice of an earlier tax purchaser’s petition for a tax deed.
Edward Scott, 909 N.E.2d at 342 (citing 35 ILCS 200/22–10).
Therefore, it is apparent that the Supreme Court of Illinois
would not recognize any interest of the tax purchaser in the
debtors’ real property beyond those rights which the statutory
framework creates. Accordingly, because Illinois courts
repeatedly call a Certificate of Purchase a lien or a species of
personal property (albeit with some statutory rights regarding
the real property), we will not treat it as an executory interest
in real property.10
    The second problem with Alexandrov’s theory is that
treating property sold at a tax sale the same way as property
sold at a foreclosure sale ignores the differences between the


10
   Moreover, the Illinois property tax code provides tax purchasers with a
very generous sale-in-error provision in the event delinquent taxpayers
enter bankruptcy, see 35 ILCS 200/21-310(b)(1), indicating that the legislature
anticipated adverse treatment of a tax purchaser’s interest in bankruptcy
(that is, treatment as a claim among other claims). If the code gave the tax
purchaser an executory interest, there would be no need for such concern.
14                                                    No. 13-1187

transactions. Under Illinois law, a mortgage foreclosure sale
should occur only after the statutory right of redemption has
expired. Colon v. Option One Mortgage Corp., 319 F.3d 912, 920
(7th Cir. 2003) (citing 735 ILCS 5/15–1507(b)). Therefore, after
a foreclosure sale, “assuming that the redemption period has
run, the purchaser at that sale has a presumptive right to
eventual ownership of the property,” subject only to confirma-
tion that all formalities were observed. Id. at 921. Accordingly,
subsequent to a foreclosure sale “the only property interest
which the [debtors have] in the real estate after the foreclosure
sale [is] the [statutory] right of redemption,” “[t]he real
property [] did not become part of the estate.” Matter of Tynan,
773 F.2d 177, 179 (7th Cir. 1985). Under those circumstances, it
is appropriate to lift the automatic stay so that the purchaser
may pursue the ministerial steps to obtain legal title to prop-
erty that he already has the right to own.
    The circumstances may be similar in the tax sale context
when a debtor files a bankruptcy petition after the redemption
deadline has passed, see In re Bates, 270 B.R. 455, 469–70 (Bankr.
N.D. Ill. 2001), but the circumstances are different if the
petition is filed while time remains to redeem. Before the
redemption period has expired, a property subject to a Certifi-
cate of Purchase still belongs to the delinquent taxpayer,
legally and equitably. In re Smith, 614 F.3d 654, 658–59 (7th Cir.
2010) (stating that a “Certificate of Purchase … ‘has no effect
on the delinquent property owner’s legal or equitable title to
the property’” (quoting In re Application of Cnty. Treasurer (A.P.
Props., Inc. v. Ezra Chaim Props., LLC), 914 N.E.2d 1158, 1165 (Ill.
App. Ct. 2009))); see also Phoenix Bond & Indem. Co. v. Pappas,
741 N.E.2d 248, 249 (Ill. 2000) (same). Alexandrov’s argument
No. 13-1187                                                             15

that the tax sale transforms the debtors’ fee simple absolute
interest into a fee simple determinable interest would change
the debtors’ title into defeasible title. That result is inconsistent
with the Supreme Court of Illinois’ explicit statement that the
debtors’ legal or equitable title is not affected by the tax sale.
Accordingly, the debtors owned their home and, upon filing
their bankruptcy petition, it became property of the bank-
ruptcy estate. See 11 U.S.C. § 541(a)(1).11
     In sum, we will not abstract Alexandrov’s interest into a
future interest in real property, but will treat it as the unique
statutory creature that it is. What Alexandrov holds is what
Illinois courts refer to as a “species of personal property, a lien
for taxes.” Wiebrecht, 304 N.E.2d at 12. The peculiarity of his
interest is that, if the debtors’ real property is not redeemed, he
may obtain not just the value of his “lien” but may take the real
property in its entirety. Because the statutory framework
provides this possibility of ownership in the future, the code
also provides him with some rights to protect that interest,
such as the right to petition for appointment of a receiver to
prevent waste. See 35 ILCS 200/21-80. Accordingly, Illinois has
given tax purchasers an unusual tax lien. The question re-
mains, though, whether the unique statutory creature that
Alexandrov owns is a claim.




11
   Even if the debtors only held the home in fee simple determinable, the
property would still enter the estate unlike property after a mortgage
foreclosure where only the statutory right of redemption enters the estate.
16                                                          No. 13-1187

     B. Alexandrov Holds a Claim Against the Debtors or
        Their Property
    As discussed above, a claim is either a right to payment or
a right to an equitable remedy. 11 U.S.C. § 101(5). The Supreme
Court of Illinois has explained, in the context of Illinois’
Uniform Fraudulent Transfer Act (“UFTA”), that a tax pur-
chaser has no direct right to payment from the taxpayer, but
rather that the property tax code sets up an indirect right to
payment mediated by the county. A.P. Properties, Inc. v.
Goshinsky, 714 N.E.2d 519, 522 (Ill. 1999) (“the procedure set
forth in the Code establishes a debtor/creditor relationship
between the purchaser and the county and a debtor/creditor
relationship between the county and the landowner”). The
court held that the attenuated nature of the right to payment
meant that a tax purchaser did not have a right to payment
from the taxpayer, and so, did not hold a claim against the
taxpayer. Id. (“creditor must demonstrate that the debtor owes
or potentially owes a ‘payment’ to the creditor”). The underly-
ing rationale is that the taxpayer has the option to pay the
redemption amount, but not the obligation to pay—and even if
there is an obligation to pay, it is to the county, not to the tax
purchaser.12 Id. (“Simply put, no set of facts exists or could
exist that would allow [the tax purchaser] to collect money
from [the taxpayers]”). Only if the taxpayer opts to pay the



12
   A.P. Properties was decided in the “Scavenger Sale” context where the
taxpayer remains liable to the county. 714 N.E.2d at 522 (citing 35 ILCS
200/21–440). In the “Annual Sale” context the taxpayers are only liable to
the county if the tax purchaser obtains a sale-in-error declaration. See 35
ILCS 200/21–310(b)(1).
No. 13-1187                                                                   17

redemption amount to the county, does the tax purchaser have
a right to the redemption amount from the county.
    The Supreme Court of Illinois held that a tax purchaser
does not hold a “right to payment” under Illinois’ UFTA,
which defines “right to payment” the same as 11 U.S.C.
§ 101(5)(A). But that does not mean that his interest is not a
right to payment within the meaning of the bankruptcy code.13
In addition to being two different statutes, the bankruptcy code
also includes a construction clause which expands the defini-
tion of “claim” to include claims against the debtor’s property.
11 U.S.C. § 102(2). Illinois’ UFTA has no such provision.
Further, Illinois’ UFTA entirely lacks the bankruptcy code’s
alternate definition of “claim” in § 101(5)(B) as “an equitable
remedy for breach of performance.” Thus, we must focus on
the Supreme Court’s interpretation of “claim” in the bank-
ruptcy code.



13
    Alexandrov points to the rule that state law governs the creation and
definition of his interest as a tax purchaser, see Butner v. United States, 440
U.S. 48, 55–56 (1979), and argues that his interest is, therefore, not a right to
payment for bankruptcy purposes either. The argument that A.P. Properties’
holding is determinative of whether a tax purchaser holds a bankruptcy
claim has been accepted by some of the decisions of the bankruptcy courts
in Illinois. See, e.g., In re Blue, 247 B.R. 748, 751–52 (Bankr. N.D. Ill. 2000).
While Alexandrov is no doubt correct that state law governs the definition
of property rights, he, and the court in Blue, attempt to stretch the principle
too far. The Supreme Court of Illinois’ holding that his interest, as defined
by state law, does not amount to a right to payment for purposes of Illinois’
UFTA does not control this court’s determination of whether his interest, as
defined by state law, amounts to a right to payment as defined in the
bankruptcy code.
18                                                              No. 13-1187

     In Johnson, a bank held a non-recourse mortgage on a
debtor’s property. The Supreme Court concluded that a right
to payment existed in the bank’s right to proceeds from the
sale of the mortgaged property. That is, if the owner sold the
property, the bank had a right to take the value of its lien at
closing. Johnson, 501 U.S. at 84. The fact that the right to
payment only arose if the owner of the property sold it to a
third party did not affect the Court’s decision. Similarly, in this
case no problem arises from the fact that the tax purchaser’s
right to payment of the redemption amount only arises if the
taxpayer pays it to the county. The reason the indirectness of
the right to payment between the tax purchaser and the
taxpayer is not an issue is because the tax purchaser holds a
right to payment from the property of the taxpayer. Simply put,
if redemption of the property is made, the tax purchaser has a
right to payment from the money paid to redeem the property.
See Johnson, 501 U.S. at 85 (emphasizing that the court’s
rationale was consistent with the bankruptcy code’s treatment
of claims against property of the debtor as claims against the
debtor and citing § 102(2)); Bates, 270 B.R. at 463 (“tax pur-
chaser's certificate of purchase creates ‘a charge on the real
estate for payment of the debt represented by the taxes’”)
(citing City Realty, 262 N.E.2d at 233); Phoenix Bond, 741 N.E.2d
at 249 (stating that a tax purchaser has a right to payment from
the county after the taxpayer redeems).14


14
    In fact, here, there is even more reason to treat the indirect right to
payment as a right to payment. If the tax purchaser seeks a declaration of
a sale in error, all of the county’s rights are revived and the county certainly
holds a claim against the property of the debtor. See 35 ILCS
                                                                  (continued...)
No. 13-1187                                                            19

     Additionally, Alexandrov holds a “right to an equitable
remedy for breach of performance.” 11 U.S.C. § 101(5)(B). This
is true because Alexandrov stands in the shoes of the county.
The debtors’ failure to timely pay their taxes was a breach of
performance owed the county. That breach gave rise to various
equitable remedies; the county may foreclose on its tax lien or
pursue a tax sale of the property. See, e.g., 35 ILCS 200/21-75
(tax foreclosure); 35 ILCS 200/21-190–21-255 (annual tax sale);
see also Johnson, 501 U.S. at 84 (stating that a right to foreclose
was an equitable remedy under § 101(5)(B)).15 To “sell” the
property at an annual tax sale the county first gets a judgment
from the county circuit court “for the amount of taxes …,
interest, penalties and costs due” on the property and gets an
order to sell the “propert[y], or so much of [it] as shall be
sufficient to satisfy the amount of taxes …, interest, penalties
and costs” due on the property. 35 ILCS 200/21-180. Commen-
tators interpret this language to mean that the county’s lien is
being sold, not the property itself. See Real Estate Taxation
§ 10.24.16 Further, when a tax purchaser files a petition for a tax


14
  (...continued)
200/21–310(b)(1).

15
   The breach also “[gave] rise to a right to payment” from the debtors to
the county as required by 11 U.S.C. § 101(5)(B). In re Udell, 18 F.3d 403,
408 (7th Cir. 1994) (interpreting § 101(5)(B)); see also A.P. Properties,
714 N.E.2d at 522 (stating that 35 ILCS 200/21-440 gives the county
a right to payment if the taxpayer breaches his obligation to pay his
property taxes).
16
     This interpretation is consistent with the Supreme Court of Illinois’
                                                           (continued...)
20                                                            No. 13-1187

deed, it is filed in the same proceeding that the county brought
for a judgment and order of sale. See Real Estate Taxation § 11.5
(citing Vulcan Materials Co. v. Bee Const., 449 N.E.2d 812, 814–15
(Ill. 1983)). The tax purchaser merely holds the Certificate of
Purchase and waits two to three years to enforce the county’s
equitable remedy (tax lien) for nonpayment of taxes if redemp-
tion is not made. Indeed, the reason the period is so long is no
doubt because the purpose of tax sales is not to strip taxpayers
of their property, but to ensure the collection of taxes. See C &
C Energy, L.L.C. v. Cody Invs., L.L.C., 41 So. 3d 1134, 1140 (La.
2010); Tracy v. Chester Cnty., Tax Claim Bureau, 489 A.2d 1334,
1339 (Pa. 1985).
     In effect, what the tax sale procedure does is sell the
county’s equitable remedy to a third party, the tax purchaser.
In this way, the tax sale procedure provides immediate income
to the county. In order to incentivize the purchase of the
county’s equitable remedy, the statutory framework enlarges
the remedy by putting the tax purchaser in a position to take
the property entirely if the taxes are not paid in the form of a
redemption. Notwithstanding the expansion, the tax purchaser
still owns, as modified, the county’s equitable remedy against
the property for nonpayment of taxes. His petition for a tax
deed is merely finishing the sale that the county started for


16
    (...continued)
unequivocal statement that, when a tax purchaser obtains a Certificate of
Purchase for delinquent taxes at the annual sale, it “does not affect the
delinquent property owner’s legal or equitable title to the property,”
Phoenix Bond & Indem. Co. v. Pappas, 741 N.E.2d 248, 249 (Ill. 2000), and with
Illinois courts’ repeated statements that the tax purchaser holds a tax lien.
See City Realty, 262 N.E.2d at 233.
No. 13-1187                                                    21

nonpayment of taxes. Alexandrov holds a non-recourse tax lien
that may be equitably enforced by obtaining a tax deed to the
debtors’ home. Accordingly, Alexandrov holds a right to
payment, or alternatively, a right to an equitable remedy
against the debtors’ property. “Either way, there can be no
doubt that the [tax purchaser’s] interest corresponds to an
‘enforceable obligation’ of the debtor.” Johnson, 501 U.S. at 84.
Therefore, the tax purchaser holds a claim against the debtors
that may be treated in bankruptcy. Id.
   C. The Expiration of The Redemption Period Does Not
      Undermine the Plan
    Alexandrov’s claim is secured by the debtors’ property. A
Chapter 13 plan may “modify the rights of holders of secured
claims.” 11 U.S.C. § 1322(b)(2). The plan may not modify
security interests in real property that is the debtors’ principal
residence. But Alexandrov’s claim is not a security interest
because it was not created by agreement. Id.; 11 U.S.C.
§ 101(51). Here, the bankruptcy court treated Alexandrov’s
secured claim by providing for payment to the Village of
Minooka (the entity to whom the tax was originally owed) in
installments over the course of the plan. Alexandrov asserts
that this was not a proper redemption. Therefore, he insists
that the redemption period has expired, the debtors no longer
have right to ownership of their property, and the automatic
stay should be modified to permit him to obtain a tax deed.
    His assertion that the full redemption amount must be paid
in a lump sum before the redemption deadline—i.e., that a
proper redemption must be made—is mistaken. The plan is
treating his secured claim, not formally redeeming the prop-
22                                                          No. 13-1187

erty. The bankruptcy code provides that a Chapter 13 plan may
modify a secured claim and pay it over the course of the plan.17
How a Chapter 13 plan operates in the tax sale context has
been correctly explained by In re Bates, 270 B.R. at 465–66.
Here, because the plan succeeded, Alexandrov’s claim was
satisfied—he no longer has any right to exercise the equitable
remedy of obtaining a tax deed.18 The expiration of the re-
demption period did not affect the plan’s treatment of
Alexandrov’s secured claim except that, if the debtors had
failed to comply with the plan, then his equitable remedy
would have survived and he could have sought an order to
issue a deed. Id. at 468–69.19 Accordingly, the expiration of the
redemption period does not affect the validity of the plan or
necessitate a modification of the automatic stay so long as the
debtors comply with the plan.




17
   Alexandrov also contends that the plan improperly paid the money to
the Village and paid it without interest. These claims are not before us
because Alexandrov only appeals the lower court’s refusal to modify the
automatic stay—which only depends on whether he holds a claim. He has
not challenged the plan—which is what he must do if he thinks his claim
was improperly treated.

18
  This presumes that the plan is valid which we do not decide because no
challenge to the plan is before us.

19
   Alexandrov makes various other arguments that either depend on his
incorrect theory that he holds an executory interest or on his incorrect
theory that the Chapter 13 plan is redeeming the debtors’ property. See Id.
at 465–66. These arguments fail because they depend on his incorrect
theories.
No. 13-1187                                                   23

   D. The Automatic Stay Applies
    The automatic stay provision of the bankruptcy code
provides that a petition for bankruptcy “operates as a stay” of
“any act to obtain possession of property of the estate” or “any
act to … enforce any lien against property of the estate.” 11
U.S.C. § 362(a)(3), (4). Alexandrov’s attempt to obtain a tax
deed is an act to obtain possession of property of the estate and
to enforce his lien for taxes. It is therefore properly forbidden
by the stay. Further, because the debtors have satisfied their
obligations under the plan, there is no reason to modify the
stay.
   E. Notice
    Lastly, Alexandrov contends that he should not be bound
by the plan because he was not given adequate notice of the
debtors’ bankruptcy and proposed plan. This argument is
waived because he first made it in a motion for reconsidera-
tion. Bloch v. Frischholz, 587 F.3d 771, 784 n.9 (7th Cir. 2009)
(“[A]ny arguments … raised for the first time in [a] motion to
reconsider are waived” (citation omitted)). Alexandrov has
also failed to reply to the debtors’ argument on appeal that he
waived his notice objection, thereby conceding the debtors’
argument. See Bonte v. U.S. Bank, N.A., 624 F.3d 461, 466 (7th
Cir. 2010) (“Failure to respond to an argument … results in
waiver.”). Further, the district court did not err in concluding
that there was no reason to grant Alexandrov relief from the
stay on account of a lack of notice—the plan provided for his
claim and he may seek a sale-in-error if he is not satisfied with
the plan’s provision. In re LaMont, 487 B.R. at 497–98.
24                                                         No. 13-1187

     F. Other Considerations
    The Clerk of Cook County, as amicus in this case, urges us
to consider the impact of our ruling on the operations of his
office. Specifically, the Clerk points out: (1) that his office needs
to be able to set a date certain for redemption; (2) that his office
cannot accept payment of a redemption amount in install-
ments; and (3) that the opportunity for a tax purchaser to delay
seeking a sale in error may leave the county on the hook for a
significant amount of interest.
     First, our holding does not toll the redemption period. The
redemption period expires when it expires. All that is tolled is
the tax purchaser’s time to obtain a tax deed after the redemp-
tion period expires, and that is a direct result of the Illinois
property tax code. 35 ILCS 200/22-85. Second, if the county
clerk is unable to receive installment payments, he should
inform the bankruptcy court, which may adopt another
solution such as payment directly to the tax purchaser20 or
retention of the installment payments by the trustee until the
whole amount may be paid to the county. It may be prudent
for bankruptcy courts to attempt the latter method if the full
payment may be made within the redemption period—while
the code does not require an actual redemption, nothing
prevents the bankruptcy court from ordering one for simplic-
ity. Third, unfortunately, the risk of the county being on the
hook for interest while the time to obtain a tax deed is tolled is


20
   See Real Estate Taxation § 10.69 (explaining an informal method where
the taxpayer pays the tax purchaser, receives the endorsed Certificate of
Purchase, and turns it in to the county clerk for cancellation so that the
county’s tax records show that the Certificate of Purchase was satisfied).
No. 13-1187                                                 25

built into the code. See 35 ILCS 200/22-85; 21-310(b)(1). Any
solution to that problem is for the courts or legislature of
Illinois.
                       III. Conclusion
    Alexandrov holds a secured claim which has been treated
by the debtors’ Chapter 13 plan. An application for an order to
issue a tax deed to the debtors’ property would violate the
automatic stay. The lower courts correctly concluded that the
stay applied and should not be modified. Therefore, the
judgment of the district court is AFFIRMED.
