Peoples Security Savings & Loan Ass'n v. Dalton (In Re Dalton)

MEMORANDUM

CLIVE W. BARE, Bankruptcy Judge.

This case involves the entitlement to rental payments collected by the debtors’ first mortgagee subsequent to the filing of the debtors’ voluntary chapter 7 petition and previous to the entry of an agreed order providing for the abandonment by the trustee in bankruptcy of any interest in the mortgaged residential property. The first mortgagee, plaintiff Peoples Security Savings and Loan Association (Peoples), contends, by virtue of the terms of its deed of trust from the debtors, it is entitled to the rental proceeds it collected. The trustee in…