In re Soares
United States Court of Appeals for the First Circuit
107 F.3d 969 (1997)
After Napoleon Soares (defendant) fell behind on payments to Brockton Credit Union (BCU) (plaintiff), which held a first mortgage, BCU sought default and foreclosure in state court; Soares filed bankruptcy two days later, triggering the automatic stay, and notified BCU but neither party told the state court, which proceeded to issue a default order and then a foreclosure judgment. BCU later obtained bankruptcy court relief from the stay without mentioning the state court proceedings, and after Soares later missed a payment, BCU completed the foreclosure sale and purchased the property; when Soares challenged the state court actions as stay violations, the state court called its own actions merely "ministerial," and the bankruptcy court, at BCU's request, retroactively lifted the stay back to the original filing date to validate the state court's default and foreclosure judgment.
Whether a bankruptcy court may retroactively lift the automatic stay to validate a state court's default order and foreclosure judgment issued while the stay was in effect but unknown to the state court, when the creditor (rather than the debtor) was responsible for the state court's lack of notice.