In some states, a debtor’s wages are generally not subject to garnishment. Here, however, debtor’s wages were directly deposited into the debtor’s account at I.B.M. Employees Southwest Federal Credit Union. A judgment creditor thereafter garnished debtor’s account at the credit union and debtor brought an action to dissolve the garnishment, arguing that the funds in […]

The two cases below held that the Bankruptcy Code section exempting “student loans” from discharge in bankruptcy, does not apply to student loans issued from credit unions. The first case of TI Federal Credit Union vs. John Delbonis, involved a debtor who, in a four year period, obtained more than $43,000 from TI Federal Credit […]

Bank of the Mountains granted a loan to debtors secured by a second mortgage on debtors’ primary residence. Debtors filed a Chapter 7 bankruptcy, which was later converted to a Chapter 13 case. Debtors listed the bank as an unsecured creditor since the value of their residence was less than the balance owing on the […]

Today’s sophisticated desktop publishing makes it easy to produce virtually undetectable fraudulent checks with which to bilk unsuspecting businesses and financial institutions, say the NCUA officials. However, the law gives financial institutions “reasonable time” to check the authenticity of a check if they have “reasonable cause” to doubt its collectibility. In one California case, checks […]

Here, a 34 year old credit union loan officer submitted a Workers’ Compensation claim against her employer credit union for post-traumatic stress disorder. The claim was denied and on appeal the credit union prevailed. The Court of Appeals of Oregon found the credit union employee had been exposed to an armed robbery at another credit union […]

Here, debtor purchased more than $1,100 of collector Barbie dolls and accessories within 40 days of filing for bankruptcy. Debtor sought to discharge these debts to the creditor who issued the credit card upon which the charges were placed. Creditor filed an adversary complaint with the Bankruptcy Court claiming that these Barbie doll purchases were “luxury […]

In this case, the Court addressed whether the prohibition against transfers to creditors prior to the bankruptcy filing begins from the date of transfer, or runs backward from the date the bankruptcy is filed. Here, the creditor obtained a judgment lien against the debtor’s property 90 days before the date of the filing of the debtor’s […]

In this case, a member of First Railroad Community Credit Union, Clark Crapps, held accounts at Columbia County Bank [Columbia] and Florida’s First Community Federal Credit Union [Credit Union]. Crapps was engaged in an elaborate check-kiting scheme for which neither Columbia nor the Credit Union was aware. Columbia allowed immediate credit on deposits made to […]

Here, the debtor owed more than $3,900 to ITT Financial Services on a loan secured by various items of personal property, including a Pentax Camera and lens, snowblower, color television set, VCR, stereo system, a gun, power saw and an electric guitar. The initial debt was refinanced several times by the debtor and on each […]

A “cram down” in a Chapter 13 plan proposes repayment to the creditor of only the actual value of the collateral. Here, the debtor attempted to cram down a secured loan with an interest rate on the unpaid balance of less than the original contract rate and less than the prime rate of interest. Debtor’s […]