OPINION
CHRISTOPHER M. KLEIN, Bankruptcy Judge:
Is there any bite in the Bankruptcy Code’s toothless tiger, 11 U.S.C. § 521(2)? Consumer debtors who are not in default on secured consumer debts sometimes flout the mandate in section 521(2) that they state (and perform) an intention to reaffirm the
debt, surrender the collateral, or redeem the collateral by paying its value. Instead, debtors who are not otherwise in default say they will “remain current” on payments without reaffirming. Here, a secured creditor contests that tactic as not authorized by the statute; and the question becomes what to do.
Four courts of appeals are evenly divided on the permissibility of a nondefaulting debt- or remaining current without reaffirming. Dozens of lower courts are similarly deadlocked. Ten years of inconclusive and not-very-helpful debate suggests that it is time to approach the problem from a different perspective and ask whether the answer matters.
The better question to ask is “what difference does it make?” This question looks beyond the point that has been debated, assumes that the debtor’s strategy is impermissible, and focuses on the remedies available to the creditor of a nondefaulting debtor who fails to reaffirm the underlying obligation.
I conclude: (1) the primary bankruptcy remedy is relief from the automatic stay; (2) bankruptcy law provides no other practicable remedy against a nondefaulting debtor who elects to remain current and disobeys the command to reaffirm, redeem, or surrender; and (3) the parties must look to nonbank-ruptcy law for other remedies. In the absence of a default under nonbankruptcy law, relief from the automatic stay will be small solace to a secured creditor. In other words, much ado about nothing.
FACTS
The debtors use a charge account with Sears to purchase typical consumer goods.
Sears has carefully drafted its credit agreements and sales documents to retain a purchase money security interest in goods purchased on the account, but has not defined default to include bankruptcy.
The debtors have always made their required monthly payments. They filed Official Form No. 8, Chapter 7 Individual Debt- or’s Statement of Intention (“statement of intention”), selected none of the alternatives listed on the form, and instead stated that they intended to remain current on the Sears account. They still decline to reaffirm the debt or surrender or redeem the collateral.
Sears objects and asks the court to fashion a remedy to make up for the absence of any specific remedy in the Bankruptcy Code. Its only suggestion is that the case should be “dismissed as to Sears only.”
Sears concedes that it would be futile to grant relief from the automatic stay because it can do nothing to proceed against the collateral under applicable nonbankruptcy (California) law so long as the debtors remain current on their payments.
DISCUSSION
I
Analysis begins with positing the statutory language that created the debtors’ obligation to file a statement of intention and make good on that intention and then comparing it with the language that was rejected before setting forth its involuted legislative history.
Section 521(2) was added to the law in 1984 as part of legislation that cleared a six-year congressional logjam following enactment of the Bankruptcy Code. It provided:
(2) if an individual debtor’s schedule of assets and liabilities includes consumer debts which are secured by property of the estate—
(A) within thirty days after the date of the filing of a petition under chapter 7 of this title or on or before the date of the meeting of creditors, whichever is earlier, or within such additional time as the court, for cause, within such period fixes, the debtor shall file with the clerk a statement of his intention with respect to the retention or surrender of such property and, if applicable, specifying that such property is claimed as exempt, that the debtor intends to redeem such property, or that the debt- or intends to reaffirm debts secured by such property;
(B) within forty-five days after the filing of a notice of intent under this section, or within such additional time as the court, for cause, within such forty-five day period fixes, the debtor shall perform his intention with respect to such property, as specified by subparagraph (A) of this paragraph; and
(C) nothing in subparagraphs (A) and (B) of this paragraph shall alter the debt- or’s or the trustee’s rights with regard to such property under this title; ....
11 U.S.C. § 521(2).
Juxtaposing what was rejected against what was enacted is revealing. The Senate twice passed a version of the statement of intention that was far less opaque:
[Proposed § 521(a)(4)] if the debtor’s schedule of assets and liabilities includes consumer debts which are secured by property of the estate, the debtor shall file and serve, within thirty days after the filing of a petition under chapter 7 of this title but no later than five days before the first meeting of creditors, upon each creditor holding such security and the trustee, a statement expressing the debtor’s intention with respect to retention or surrender of the collateral and, if applicable, specifying that the collateral is claimed as exempt, that the debtor intends to redeem the collateral, or that the debtor intends to reaffirm debts secured by the collateral; [Proposed § 521(b) ] At or before the conclusion of the meeting of creditors provided for by section 341 of this title, or upon such other date as the court in a specific case and in the exercise of its equitable powers may fix, the debtor shall perform his intention with regard to secured creditors, as specified by paragraph (3) of subsection (a), by surrendering such property to the creditor or the-trustee; redeeming such property by paying the redemption price, or confirming his intention to pay such price pursuant to section 722(b); or by reaffirming the debt. If the debtor has not fully performéd his obligations under paragraph [4] of subsection (a) and this subsection at or before the meeting of creditors, the stay imposed by section 362(a) of this title shall terminate with respect to the enforcement of liens against such property, unless -the court orders otherwise.
S. 445, 98th Cong., 1st Sess. § 207 (1983) (as passed by the Senate on April 27, 1983, but not enacted).
It is evident that section 521(2) bears scars from crippling wounds suffered in hard-fought battles. Its'text is so enigmatic, particularly in light of the rejected version, that the most that can be said in its defense is that the Congress settled upon a calculated ambiguity to resolve an intractable difference of opinión.
A
Now, some history. The years between 1978 and 1984 witnessed intense lobbying for amendments by, and an epic stiff-arm of, the consumer credit industry, which thought itself sandbagged in the closing moments of the 95th Congress when an obscure, hasty, but exquisitely-timed procedural maneuver was used to enact the Bankruptcy Reform Act of 1978 without running the gauntlet of the usual House-Senate conference.
The consumer credit industry prepared substantive amendments to add to the technical corrections bill that was supposed to be presented early in 1979 to clean up the Bank
ruptcy Reform Act’s numerous errors of haste
— spelling, grammar, punctuation, and minor technical points — or to add to any other bankruptcy legislation that had a possibility of being enacted.
House Judiciary Committee leaders, who opposed the consumer credit amendments and other special interest provisions, bottled up essentially all bankruptcy legislation for years rather than risk having amendments added to some other bankruptcy bill that might clear the committee.
The logjam was momentous, and the proposed consumer credit amendments, including the statement of intention, were at center stage. They had powerful supporters and a well-financed lobby behind them. And there were powerful, equally-determined enemies within the Congress. Impasse ensued.
Ultimately, two Supreme Court decisions forced the hand of the opponents. First, in 1982, the Court held that the 1978 Code unconstitutionally allocated jurisdiction over certain bankruptcy matters to judges who lacked Article III status.
Northern Pipeline Constr. Co. v. Marathon Pipe Line Co.,
458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). The ensuing disagreement about whether bankruptcy judges should become Article III judges only intensified the logjam. Meanwhile, the bankruptcy system gimped along under the so-called Emergency Rule that was cobbled together to avert chaos until the Congress could resolve the matter.
The time for bankruptcy amendments finally arrived in February 1984, when the Court held that collective bargaining agreements could be rejected in reorganization cases.
NLRB v. Bildisco & Bildisco,
465 U.S. 513, 104 S.Ct. 1188, 79 L.Ed.2d 482 (1984). Organized labor immediately entered the fray, and the balance of politics shifted decisively.
After
Bildisco,
the demand for bankruptcy amendments could no longer be resisted. In any such legislation, the various interest groups that had been vying for amendments could no longer be denied.
The consumer credit amendments that were ultimately enacted were not the same as in Senate Bill 445 or other similar measures that had passed the Senate. Rather, they were introduced by the House Judiciary Committee leadership as House Resolution 5174, a rearguard action in the face of the inevitable that was designed to minimize the damage and that purported to reflect a compromise with the consumer credit industry.
Thus, the relatively accessible legislative history of Senate Bill 445, while essential background for divining the meaning of section 521(2), is of limited assistance because the language of the section finally enacted differs greatly. The more elusive legislative history of House Resolution 5174 has been elucidated in a treatise on reaffirmation and redemption. R. Hessling, Reaffirmation and Redemption at 92-129 (1994).
In the Senate, the key battles were fought in the Judiciary Committee where Senators Kennedy and Metzenbaum led the opposition. As chronicled in Senate Report No. 98-65, the consumer credit amendments were initially introduced in 1981 as part of Senate Bill 2000, which was reported out of committee with two negative votes but was not passed by the full Senate. They were reintroduced in the 98th Congress as Senate Bill 445. S.Rep. No. 98-65, 98th Cong., 1st Sess. 1-2 (1983).
Senators Kennedy and Metzenbaum ultimately, albeit reluctantly,
agreed to Senate Bill 445, having, in the euphemisms of the committee report, “played a critical role in
shaping the legislation and in developing moderating language enhancing protections for debtors affected by changes in the law provided for in the bill.”
Id.
at 2.
The version of section 521 that cleared the Senate in Senate Bill 445 had two key features. First, the statement of intention had to be filed before the first meeting of creditors.
Second, the automatic stay would, absent contrary court order, terminate if the debtor had not fully performed the stated intention by the conclusion of the meeting of creditors.
That self-executing termination of the automatic stay was eliminated before enactment. If the Senate version had been enacted, secured creditors would be able to settle their rights or enforce their liens early in a case.
The legislative history of House Resolution 5174 in the House of Representatives is scattered. The measure was introduced by Judiciary Committee chairman Rodino on March 19, 1984, twenty-five days after the Supreme Court’s
Bildisco
decision. It included the consumer credit amendments as a separate subtitle and was described as reflecting a compromise with representatives of the consumer credit industry.
Section 521(2) was one of the provisions in the compromise that ultimately became law.
Section 521(2) in House Resolution 5174 differed from the Senate’s proposed sections 521(a)(4) and 521(b) in several respects. Where the Senate would have required the debtor to complete performance by the first meeting of creditors, the House version gave
the debtor up to thirty days or, if earlier, the day of the meeting of creditors, in which to file the statement of intention and then permitted an additional forty-five days in which to perform the stated intent.
The trustee was assigned the duty of ensuring that the debtor actually perform the stated intention. Amd, most significant, the enforcement mechanism of automatic relief from the automatic stay was eliminated.
House Resolution 5174 passed the House on March 21, 1984.
Although the Senate passed House Resolution 5174 on June 19, 1984, it deleted the House’s consumer credit amendments in their entirety and substituted its own consumer credit amendments from Senate Bill 445 in their stead.
A House-Senate conference accepted the House version of the consumer credit amendments. The conference report was agreed to on June 29,1984. The President signed House Resolution 5174 on July 10, 1984.
The floor statements supporting final enactment of the compromise fashioned in the House-Senate conference emphasized that the House version of the consumer credit amendments was being accepted. The floor statements are replete with remarks indicative of the frustration and deadlock that had permeated the whole affair.
But there is little guidance as to how the consumer credit provisions, including section 521(1), were intended to function.
B
The legislative history indicates that the process was one of long-term deadlock and begrudging compromise. Only two things are clear about the statement of intention. First, the Senate designed a self-executing remedy by providing that the automatic stay would terminate unless the debtor either performed the stated intention before the meeting of creditors or persuaded the court to prolong the stay. Second, by eliminating the
automatic termination of the stay and disconnecting performance of the intention from the meeting of creditors, the House eviscerated the Senate’s remedy.
In view of this legislative history, it should come as no surprise that section 521(2) is written in mud. To some, it is disgraceful draftsmanship. To others, it is inspired ter-giversation. Whatever, the provision smacks of compromise and calculated ambiguity.
Two unresolved issues fester in section 521(2): (1) whether the three named choices — affirm, redeem, or surrender — are exclusive of all other possibilities, including doing nothing other than remaining current on the debt; and (2) whether a creditor has any remedy when the debtor fails to comply.
Ill
Mindful that the narrow question is whether there is a
remedy
for flouting section 521(2), it is necessary first to describe how the divided courts have dealt with the controversy regarding the unmentioned alternative of remaining current on payments without reaffirming.
The courts of appeals in four circuits have split 2-2 on the question whether the debtor may retain property without reaffirming under section 524(c) or redeeming the collateral under section 722. Lower courts are also divided, with the majority favoring the positions of the Fourth and Tenth Circuits. R. Hessling, Reaffirmation
&
Redemption § 4-5 (1994) (cataloging cases).
The Seventh and Eleventh Circuits hold that debtors must choose to reaffirm the debt or redeem, or surrender the collateral and nothing else.
Taylor v. AGE Federal Credit Union (In re Taylor),
3 F.3d 1512 (11th Cir.1993);
In re Edwards,
901 F.2d 1383 (7th Cir.1990).
According to the Seventh Circuit in
Edwards:
the obligations created by section 521(2) are mandatory and unambiguous; allowing property to be retained amounts to a de facto reaffirmation that violates section 524(c) because it is not voluntary as to the creditor; and the legislative intent behind the 1984 amendments was to “protect creditors from the risks of quickly depreciating assets and to keep credit costs from escalating because of the too-ready availability of discharge.”
Id.
at 1386.
The Eleventh Circuit in
Taylor
similarly finds section 521(2) unambiguous and not open to analysis that undermines the reaffirmation and redemption processes. Retention without reaffirmation or redemption would, according to
Taylor,
transform recourse debt into nonrecourse debt because the debtor would be. discharged from the debt as a personal obligation.
The Fourth and Tenth Circuits see it differently.
Lowry Federal Credit Union v. West,
882 F.2d 1543 (10th Cir.1989);
Homeowners Funding Corp. v. Belanger (In re Belanger),
962 F.2d 345 (4th Cir.1992). The Tenth Circuit agrees that the statute prescribes only three options but notes that nothing in the Bankruptcy Code ties the right to retain collateral to redemption or reaffirmation and that there is no specific remedy, such as an automatic right to repossess. In the absence of any showing of actual prejudice under the facts of the case, the
Lowry
court declined to upset the bankruptcy court’s injunction that permitted the debtors to retain an automobile so long as they made their regular payments and maintained insurance notwithstanding a so-called
ipso facto
clause in the underlying agreement that made bankruptcy an event of default.
The Fourth Circuit in
Belanger
does not see the three options as excluding the further
alternative of retaining the property and remaining current on the debt. It sees the phrase “if applicable” at 11 U.S.C. § 521 (2) (A) as having meaning only if the unnamed alternative is indeed permissible. Thus, the
Belanger
court finds the statute unambiguous, like
Taylor
and
Edwards,
but for the opposite proposition and concludes that section 521(2) is satisfied by making a statement that announces an intent to retain the property and remain current on the debt.
IV
Assuming that section 521(2) forbids an election to remain current on a debt without either reaffirming or redeeming, what remedies can the creditor pursue against the non-defaulting debtor?
Two principles apply. First, any remedy generally available under the Bankruptcy Code, such as relief from stay, can be pressed into service so long as it is suitable to the problem. Second, once beyond the frontier of the standard remedies, more creative solutions attempted by creditors should be assessed with guidance from the four-part
Cort v. Ash
test for an implied private cause of action.
Cort v. Ash,
422 U.S. 66, 78, 95 S.Ct. 2080, 2087-88, 45 L.Ed.2d 26 (1975).
Relief from the automatic stay for cause is plainly permitted. 11 U.S.C. § 362(d)(1); R. Hessling, § 4-8 at 391-92. Indeed, automatic termination of the automatic stay was the remedy intended by the proponents of the statement of intention. Elimination of the proposed automatic termination feature did not undermine the appliea-bility of the basic provisions relating to relief from stay.
Violation of section 521(2) serves as a prima facie basis for a finding of cause for relief from stay. The debtor would, as the party opposing relief, have the burden of proof on all issues relating to cause. 11 U.S.C. § 362(g)(2). One recognized defense to a motion for relief is that the debtor needs a reasonable time in which to redeem or reaffirm. R. Hessling, § 4-8, at 392;
In re Chavarria,
117 B.R. 582, 585 n. 3 (Bankr.D.Idaho 1990). The trustee, who has a titular statutory duty to ensure that the debtor performs the intention, might even be obliged to support the creditor’s motion if there is no value to be realized for the estate. 11 U.S.C. § 704(3).
The problem with relief from stay from the creditor’s standpoint is that relief merely permits the creditor to enforce its rights under state law. If the debtor is in default, the creditor must follow the procedures established by state law for enforcing its rights in the collateral. Where, however, there is no default, the state law hurdle becomes insurmountable.
Sears concedes in this instance that the debtor is not in default under state law. Accordingly, relief from stay would be small solace, and Sears does not seek it.
Bankruptcy’s version of the All Writs statute, 11 U.S.C. § 105(a), has some utility. The court could, on motion, direct the debtor to choose between reaffirmation, redemption, or surrender as an order “that is necessary
or appropriate to carry out the provisions” of title ll.
If the debtor does not comply with a court order, there are, in principle, two remedies— denial of discharge and contempt.
Both remedies, however, pose difficult questions if forcefully pursued against a nondefaulting debtor.
The court may deny a discharge if the debtor refuses to obey any lawful order of the court other than an order to respond to a material question or to testify. 11 U.S.C. § 727(a)(6)(A). An appropriate order from the court requiring the debtor to state an intention to reaffirm or to redeem or to surrender would constitute a lawful order of the court pursuant to section 727(a)(6)(A). When, however, the debtor does fail to comply with an order of the court, the court should use discretion and consider whether a denial of discharge is appropriate under all the facts and circumstances of the case.
It should come as no surprise that no reported case has denied a discharge on account of failure to comply with an order to comply with section 521(2). Denial of a discharge to a debtor who is paying a bill seems disproportionate to the transgression and renders the remedy impracticable.
Contempt is also available whenever a court order is violated. Civil contempt permits coercive fines that are remedial in nature. Thus, the debtor potentially could be fined a fixed number of dollars per day (or locked up) for each day that the debtor does not comply with the order.
Contempt, however, is serious business that warrants caution and the exercise of wise discretion. Holding a debtor who is paying his bill in contempt seems as disproportionate as denying a discharge and renders the remedy impracticable.
C
Dismissal of the case on the basis of unreasonable delay by the debtor that is prejudicial to creditors is authorized by 11 U.S.C. § 707(a)(1) and has been employed for violation of the section 521(2) requirements.
In re Green,
119 B.R. 72, 73-74 (Bankr.D.Md.1990).
The impracticability of employing section 707(a)(1) as a basis for a remedy against a nondefaulting debtor is that a creditor who is being paid regularly and on time will have difficulty demonstrating prejudice.
Cf. Lowry,
882 F.2d at 1546 (the debtor’s filing of a petition, without more, does not prejudice a creditor).
D
Nondischargeability is what Sears seeks in this instance under the guise of its
request that the bankruptcy case be “dismissed as to Sears.”
The problem is that no statute specifically authorizes a debt to be held nondisehargeable if the debtor fails to comply with section 521(2). Although the court is entitled to issue necessary and appropriate orders to implement the Bankruptcy Code under section 105, that provision is not a general grant of legislative powers to supplement the detailed list of nondischargeable debts specified at 11 U.S.C. § 523(a).
E
To “wait and see” whether the promised regular payments are made is another legitimate alternative for the creditor, particularly in the usual chapter 7 case. This alternative is neither trivial nor impracticable when one takes into account the timing of key bankruptcy events.
The entry of the discharge of an individual debtor terminates the automatic stay protecting the debtor and property of the debtor. 11 U.S.C. § 362(c)(2)(C). It is replaced by a permanent injunction that forbids efforts to collect as a personal liability but which does not bar enforcement of lien rights. 11 U.S.C. § 524(a). Once the discharge is entered, the creditor is free to pursue its in rem rights against property of the debtor, including exempt property.
The chapter 7 discharge ordinarily is issued within one-hundred days after the case is filed.
The debtor can perform the statement of intention as late as seventy-five days after the case is filed without being tardy.
Thus, the creditor in the typical chapter 7 case will be able to enforce its hen rights under state law against an individual debtor’s property between one and two months after the debtor’s deadline to perform the stated intent unless the discharge is delayed by court order or by pendency of litigation affecting the right to a discharge.
Meanwhile, if the debtor is remaining current on the obligation to the creditor, regular monthly payments will be made. Payment is the creditor’s ultimate remedy.
If the debtor is not current on payments, the creditor should have little difficulty establishing a default under state law as a predicate to foreclosing upon its hen interest.
See
U.C.C. §§ 9-501 to -507; Cal.Com.Code §§ 9501-07 (West Supp.1994); § 9508 (West 1990). If, however, there is no default, the creditor may be unable to do anything other than sit quietly and be paid.
F
The four-part
Cort v. Ash
test for an implied cause of action merits more attention at this point.
Cort,
422 U.S. at 78, 95 S.Ct. at 2087-88. Creditors easily satisfy two of the elements because section 521(2) was enacted at the instance of creditors and involves a subject that is not traditionally relegated to state law. But they run afoul of the other two elements.
It cannot be said that there is an indication of legislative intent to create a remedy for violating section 521(2). If anything, the legislative intent that prevailed in the end was
an intent to assure that there was not a remedy.
Nor, can it be said, in view of the Senate’s acquiescence to the House’s evisceration of the self-executing remedy, that a private remedy is consistent with the underlying purposes of the legislative scheme.
*
*
*
In sum, a creditor’s only practicable remedy under the Bankruptcy Code against a nondefaulting debtor for not complying with section 521(2) is relief from the automatic stay. If the bankruptcy court were to grant such a motion, the creditor would then be free to look to its remedies under state law. In the absence of default, however, state law is not likely to be helpful.
The motion to “dismiss the case as to Sears” will be denied as constituting relief that cannot be provided. Sears will have to obtain relief from the automatic stay or await the discharge and the opportunity to enforce its lien rights if and when it can establish a default under state law.