In some states such as Texas, a debtor’s wages are generally not subject to garnishment. Here, however, this Texas 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, […]

If collateral is not insured and the debtor files bankruptcy, proper procedure is to first lift the Bankruptcy Stay and then repossess collateral. Here, the court held that a creditor is entitled to lifting the Bankruptcy automatic stay if the secured collateral is not insured. An automobile in question in this case was not insured. […]

False loan application results in nondischargeable debt. Here, debtor submitted a loan application to the bank and represented that he and his wife were on the title of debtor’s residence. In fact, the residence was only found to be titled in debtor’s wife’s name. Thereafter, debtor filed an individual Chapter 7 bankruptcy and the bank filed […]

Security State Bank of Hamilton issued a loan of nearly $17,000 to Jerry and Henrietta Marshall in exchange for the Marshall’s pledge of a security interest in the debtors’ new car. Debtors signed the promissory note and pledge of security. The bank’s personnel, however, failed to identify the pledged security on the Truth-in-Lending disclosure. Debtors’ […]

Facts: 1.  Debtor, Specialty Contracting and Supply Company, granted a security interest in its equipment, among other items of collateral, to one Richard Fraley; Fraley was an officer of Specialty Contracting and he filed a financing statement in Texas where Specialty Contracting operated at that time. Two years later, the debtor’s business moved to Georgia. Chronologically, the […]

The trial court held that the credit union’s actions, as well as that of the credit union attorney, violated the bankruptcy code’s automatic stay. The trial court ordered the credit union and its attorney to pay $15,000 in punitive damages. Here, debtor purchased a kit to transform his 1970 Volkswagen chassis into a 1937 Jaguar […]

A 56 million dollar plus Texas credit union adopted a personnel policy manual which included an internal grievance procedure. The manual contained a specific assurance that: [n]o employee shall be penalized for using the grievance procedure. A veteran credit union employee of eight years filed an internal grievance when she and three other employees were […]

Court held creditor must pay debtor for creditors wrongful repossession. In this case, the debtor pledged his vehicle as collateral on a loan and the loan was in default due to late payments. The creditor, Mercedes-Benz Credit Corp., repossessed debtor’s vehicle, however, the court found the repossession constituted a wrongful repossession, or “conversion.” The court […]

Here, credit union member, Randy Pieper, was discussing possible financing for the purchase of an apartment building with a loan officer of Melrose Credit Union.   The loan officer told Pieper that a local gas station was for sale and the purchase of the gas station would be a better investment than the apartment building. […]

In this case,  debtor filed a Chapter 7 bankruptcy attempting to liquidate some $67,000 of unsecured credit card debts. The Court denied the discharge as to Corestates Bank. Here, the debtor used his credit cards to obtain cash advances for daily living expenses. The debtor’s charge cards were nearly all charged to the maximum limit. […]