Ipso facto clauses

Ipso facto clauses are unenforceable. Those clauses hold that the filing of bankruptcy automatically constitutes a default of a contract or loan irrespective of whether the debtor is otherwise in compliance. The general rule is that an ipso facto clause in a loan contract is “unenforceable as a matter of law.” See, e.g., §541 (c)(1); Riggs Nat. Bank of Washington, D.C. v. Perry, 729 F.2d 982; Coastal Federal Credit Union v. Hardiman, 398 B.R. 161, 170 (E.D. NC 2008); Matter of Rose, 21 B.R. 272, 276-77 (Bkrtcy.D.N.J.1982); In re Horton, 15 B.R. 403, 405 (Bkrtcy.E.D.Va.1981). There is one exception to this. In, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), the code was changed in one respect: where a loan is secured by personal property the debtor must file his statement of intention to retain the property and reaffirm the debt secured by the property for the clause to be rendered unenforceable, pursuant to §521(d) as required under §521(a)(6), and §362(h)(1). See, e.g., In re Lopez, 440 B.R. 447, N.2 (E.D.Va 2010); In re Ruona, 353 B.R. 688 (DNM 2006).