UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _______________

No. 20-3496 _______________

In re: BELARMINIO PERALTA, d/b/a Peralta Groceries,

Appellant _______________

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 2:20-cv-02380) District Judge: Honorable Paul S. Diamond _______________

Argued: June 21, 2022

Before: McKEE, RESTREPO, and BIBAS, Circuit Judges

(Filed: September 7, 2022) _______________

Ronald G. McNeil [ARGUED] MCNEIL LEGAL SERVICES 1333 Race Street Philadelphia, PA 19107 Counsel for Appellant Joseph P. Kerrigan [ARGUED] KERRIGAN LAW 461 North 3rd Street, Suite 2B Philadelphia, PA 19123 Counsel for Appellee _______________

OPINION OF THE COURT _______________ BIBAS, Circuit Judge. Rather than taking out a mortgage, homebuyers can pay the seller in installments. In Pennsylvania, these installment con- tracts are treated like mortgages. So if homeowners default on them, they can cure that default in bankruptcy—but only until the seller gets a judgment for possession to evict them. Yet Belarminio Peralta tried to cure the default after the seller got a judgment for possession. Because his home was not part of his bankruptcy estate, he had no right to cure his default. We will thus affirm. I. BACKGROUND When Peralta wanted to buy a house, he did not take out a mortgage. Instead, he promised to pay the seller, Recon Inter- national, in installments. For years, he followed through. But he eventually stopped making payments. Recon sued Peralta for breaching his installment contract. But it relented, giving him a second chance. It proposed new terms: Peralta could keep his house if he made payments. But if he breached again, Recon could get a judgment for posses- sion and immediately kick him out of the house. Plus, that

2 second breach would “extinguish[ ] any and all rights, liens, and/or interest” that Peralta had in the house. Supp. App. 39. Peralta agreed. Once again, Peralta fell short and stopped paying. Recon went to court and got a judgment for possession. But Peralta did not keep his side of the bargain. Rather than leave, he stayed in the house and filed for a Chapter 13 bankruptcy, hop- ing to revive his installment contract, finish paying, and keep his house. Normally, Peralta’s house would not be part of his bank- ruptcy estate. That bundle includes only his “legal or equitable interests … in property” when he filed. 11 U.S.C. § 541(a)(1). And when he breached his contract that second time, he lost any interest in his home. Even so, Peralta thought he could show an equitable inter- est. Chapter 13 lets a bankrupt homebuyer “cure[ ]” a “default” on a mortgage during the bankruptcy process until the home “is sold at a foreclosure sale.” 11 U.S.C. § 1322(c)(1). Though Peralta had breached an installment contract, not a mortgage, he thought that § 1322 could also cure his “default.” JA 24–25. And because Pennsylvania treats foreclosed installment con- tracts like mortgages, Peralta added, that cure gave him an in- terest in his property. Though plausible, Peralta’s position is tricky: § 1322 does not fit installment contracts well. An installment contract never has a “foreclosure sale.” The seller need never take title back from the defaulting homebuyer because it stays with the seller until the contract is paid off. See Anderson Contracting Co. v.

3 Daugherty, 417 A.2d 1227, 1231 (Pa. Super. Ct. 1979), appeal dism’d, 425 A.2d 329 (Pa. 1980). Still, the