Excessive gambling debts result in nondischargeable debt. Here, FCC National Bank, and several other creditors, objected to the debtor’s bankruptcy on the basis that the debtor borrowed money without any ability or intention to repay the debts. Prior to the filing of bankruptcy, the debtor withdrew $40,000.00 from a trust account. She gave away $20,000.00 […]

An Illinois Court held wage assignment, unlike a garnishment on debtor’s wages, unconditionally vested creditor’s rights. In this case, the debtor sought a return of $546.93 that had been withheld from his wages pursuant to a voluntary wage assignment and paid to Mercury Finance Co. (“creditor”) prior to his filing a Chapter 13 bankruptcy. Here, debtor’s […]

A Chapter 7 debtor brought an action against Security Federal Credit Union, alleging discrimination and violation of the automatic stay.   The bankruptcy court held that:   (1) termination of debtor’s member services at the credit union was not discrimination; (2) an administrative freeze on debtor’s account did not violate the automatic stay; (3) credit […]

Here, Debtors’ Bankruptcy was Dismissed for Substantial Abuse by the Debtors. In this case, the Chapter 7 bankrupts filed their estimated monthly budget with the bankruptcy court, which included a $350 contribution to their church. The court found that such a large monthly contribution by the debtors to their church each month constituted an abuse of […]

In this case, debtor filed a Chapter 7 bankruptcy seeking to discharge his unsecured obligations. The debtor listed over $55,000 of unsecured debts on his bankruptcy schedules, including a $9,500 loan from a credit union. The bankruptcy Trustee reviewed debtor’s monthly budget and found that debtor could afford to repay some of his obligations (such […]

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 […]

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 […]

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 […]