DENNIS J. STEWART, Bankruptcy Judge.
The court formerly issued its final judgment on August 9, 1983, denying the plaintiff's complaint for relief from the automatic stay on condition that the debtor cure arrearages and maintain current payments to the extent that plaintiff is a secured creditor.1 The plaintiff has timely moved for reconsideration of that judgment, contending that the bankruptcy court has no jurisdiction over the real property here in question because of a foreclosure sale at which plaintiff purchased the property some 20 days before the filing of the within chapter 13 proceeding.
The plaintiff relies upon an unpublished decision of our district court in In re Grayling Taylor, Civil Action No. 82-00559-CV-W-5 (W.D.Mo. Oct. 18, 1982), reversing a bankruptcy court decision reported at 21 B.R. 179 (Bkrtcy.W.D.Mo.1981). In that case, the bankruptcy court had held that, when the foreclosure sale had taken place on the same date and shortly prior to bankruptcy, the filing of the chapter 13 petition itself was a sufficient notice of redemption under the Missouri statutes so that the foreclosed property became a part of the chapter 13 estate.2 On appeal, the district court reversed, stating pertinently as follows:
"Nutter contends that the Bankruptcy Court erred when it held that the Debtor retained an interest in a right of redemption at the time of the Debtor\'s filing of a petition for adjustment of debts under Chapter 13 of the Bankruptcy Code and that the interest passed into the Bankruptcy Estate. It is clear under the Code that `all legal and equitable interests of the Debtor in property\' at the time the petition is filed are property of the bankruptcy estate. 11 U.S.C. § 541(a)(1). Those legal and equitable interests are generally determined by reference to state law. Butner v. United States, 440 U.S. 48, 54 99 S.Ct. 914, 917, 59 L.Ed.2d 136 (1979). See also In re Paubner Paukner, 10 B.R. 29 (Bkr. Bkrtcy. Ohio 1981); In re Parker GMC Truck Sales, Inc. v. United States, 12 B.R. 667, 6 B.C.D. 899 (Bkrtcy. S.D.Ind.1980). The legislative history of Section 541 similarly indicates that Congress intended that the interests of the debtor be determined by state law. See, Sen.Rep. No. 95-989, 95th Cong., 2nd Sess. 82-3 (1978); H.R.Rep. No. 95-595, 95th Cong., 1st Sess. 367-8 (1977). Thus, this Court, as well as the Bankruptcy Court, must look to Missouri law in order to ascertain what legal or equitable interests Taylor owned at the time he filed his petition under Chapter 13.
"On September 17, 1981, the residence owned by Taylor was sold at a Trustee\'s sale and purchased by Nutter for $12,539.90. Taylor had continuously defaulted on his payments beginning in April of 1981. Once a default has occurred and the Trustee\'s sale properly conducted, Missouri law provides that the Trustee\'s sale operates as a complete foreclosure. Green Greene v. Spitzer, 343 Mo. 751, 123 S.W.2d 56 57, 60 (Mo.1983 1938); Plumb Plum v. Studebaker 89 Mo. 162, 1 S.W. 217, 219 (Mo.1886). The foreclosure and the execution of the Trustee\'s deed in favor of Nutter divested the fee out of Taylor, the mortgagor. See, Hill v. Ballard, 178 S.W.2d S.W. 445, 446 (Mo.1915). The foreclosure passed title to Nutter on the date the deed of trust was executed. See, S.S. Kresge Co. v. Shankmon Shankman 240 Mo.App. 639, 212 S.W.2d 794, 801 (Mo.App.1948). The deed of trust was recorded by Nutter on September 17, 1981.
"Missouri statutory law provides for redemption from a deed of trust foreclosure within one year of the date of sale to the holder of the note if a three-step process is followed. See, Sections 443.410, 443.420, and 443.430, RSMo 1978. The owner of the equity of redemption must initially give notice of his or her intent to redeem by serving a written notice on the person conducting the sale on the day of the sale or within ten days of the day of the sale. Section 443.410, RSMo (1978). The giving of the notice is critical and is a precondition to preservation of statutory redemption rights. Section 443.420 RSMo 1978. See, Euclid Terrace Co. v. Golterman Enterprises, Inc., 327 S.W.2d 542, 545 (Mo.App.1959); Dawson v. Hetzler 230 Mo.App. 737, 74 S.W.2d 488, 489 (Mo.App.1934). Taylor concedes that he took no steps to effectuate his statutory right of redemption in the property purchased by Nutter prior to his filing of a petition under Chapter 13. Since both parties agree that no legal or equitable interest in a statutory right of redemption was extant at the time the petition was filed, no such interest became property of the bankruptcy estate.
"The Bankruptcy Court, however, ignored both the evidence and the rigorous nature of the Missouri foreclosure procedure. It flippantly ruled that `The notice period does not appear to be critical. In any case, the Court holds that the filing of the Chapter 13 plan within a few days of the foreclosure is sufficient notice of Debtor\'s intention to retain the property.\' The Bankruptcy Court cited no authority in support of its ruling. Additionally, the Bankruptcy Court had no evidence before it which could lead it to conclude that the Debtor meant anything by the filing of the Chapter 13 plan other than that he wanted an adjustment of his debts. The Bankruptcy Court not only ignored a great body of Missouri common and statutory law in reaching its decision, but also based its novel holding on pure speculation. Clearly, the Bankruptcy Court abused its authority in deeming the filing of a Chapter 13 plan as notice sufficient to override the elaborate notice requirements present in the Missouri statutory redemption provisions.
"The Bankruptcy Court additionally bolstered its holding on the theory that even if a statutory right of redemption had been forfeited by the Debtor, the Debtor retained an equitable right of redemption which is distinct from the statutory right. The Bankruptcy Court, however, ignored the limited circumstances in which the equitable right can be asserted. The equitable right of redemption is only available where some irregularity has occurred in the sale of the property being foreclosed. Fitzpatrick v. Federer, 315 S.W.2d 826 (Mo.1958) (conspiracy to chill bidding at sale); Kennon v. Camp, 353 S.W.2d 693, 695 (Mo.1962). Though Taylor conceded that no irregularity occurred, the Bankruptcy Court, nonetheless, reached out to apply an equitable doctrine which was clearly inapplicable. The Bankruptcy Court again overstepped its authority."
In that action, however, the question of whether the prebankruptcy foreclosure constituted an avoidable preference under § 547 of the Bankruptcy Code was raised neither by the parties nor by the facts.3 In the action at bar, however, the defendant raises the issue explicitly in her answer to the complaint.4 Further, the facts imbedded in the documents submitted by the court demonstrate the existence, at the time of foreclosure, of an equity in the property which was the subject of the foreclosure.5 Under such circumstances, the governing authority under the current Bankruptcy Code holds that the foreclosure can be set aside as a preference.6 The files and records within, when combined with the presumption of insolvency contained in § 547(f) of the Bankruptcy Code, purport to show that all the elements of a preference exist in this case.
Further, as a separate and independent basis for denying reconsideration when the plaintiff mortgagee was the purchasee at the foreclosure sale; when this sale was shortly followed by the institution of bankruptcy; the bankruptcy or chapter 13 estate was thereby deprived of the debtor's equity interest; and the chapter 13 plan must propose to grant the creditor the full value of the property it would appear that the facts and circumstances warrant the setting aside of the foreclosure sale for irregularity or other equitable reasons within the meaning of the state court decisions.7 Although the inadequacy of consideration alone, under those decisions, cannot constitute a basis for setting aside the foreclosure sale,8 in combination with the other circumstances detailed above, there is sufficient irregularity or equitable circumstance to set the foreclosure sale aside.9
Finally, when, under both or either of these theories, at least a portion of the value transferred should be brought into the chapter 13 estate; when the property is the debtor's house and cannot be equitably divided and is, moreover, necessary to her performance under the chapter 13 plan; and when the creditor's interest in the property can be adequately protected under the terms of the chapter 13 plan, it is consistent with the recent decision of the United States Supreme Court in United States v. Whiting Pools, Inc., ___ U.S. ___, 103 S.Ct. 2309, 76 L.Ed.2d 515 (1983), that the entire property should be...
