Legal News for Credit Union Managers Since 1990

Archive for Bankruptcy


27
May
2022

Protecting Home Equity Mortgage Portfolios

Credit Union Home Equity Mortgages and deeds-of-trust of any nature are generally junior in position to a first mortgage/lien holder. As such, the credit union can and should protect its Home Equity portfolio as securely as possible from collateral damage if a first mortgage proceeds into foreclosure. Question: Will the credit union receive a notice if the […]

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25
May
2022

Preferential Transfer: Creditor Retains Debtor Garnishment Funds Received within 90-Days of Bankruptcy Filing

Creditor retains garnishment funds received within two weeks before debtor filed bankruptcy. Court ruled in this case that date garnishment was “served” on garnishee defendant placed garnished funds outside of 90-day window for Trustee to set aside transfer to creditor. Here, the bankruptcy trustee sought to compel First of America Bank to return garnishment funds received […]

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24
May
2022

Refinanced Debt Fraud – No New Money

This California Appellate Panel rendered an opinion favoring creditors who refinance a debt in reliance upon a fraudulent financing statement, even though no new money is advanced. In this case, debtors had an existing loan with the bank and were unable to make the agreed payments. Debtors requested an extension of time to repay the […]

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09
May
2022

Chapter 13 Plan Cures Arrearage

Debtors’ residence was in a mortgage foreclosure when, after the foreclosure judgment but prior to the sheriff’s sale, the debtors filed a Chapter 13 bankruptcy. The debtors’ Chapter 13 Plan provided for curing the prepetition arrearage over the term of the Chapter 13 plan and also provided for regular monthly payments on the mortgage after […]

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05
May
2022

Creditor Required to Release Lien

In this case, Robert Schultz and his wife owed more than $15,000 to Hancock Bank on a loan secured by debtors’ Chevrolet Caprice. The amount owed was not in dispute. Debtors’ Chapter 13 Plan proposed to repay Hancock Bank the value of its security, which was listed at $8,175. The balance of the funds owed […]

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02
May
2022

Insurance Lapse: Lift Stay & Repossess Collateral

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. […]

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28
Apr
2022

Reaffirmation, Redemption or Surrender of Collateral

In some jurisdictions, but not in Michigan, Bankrupt debtors must either redeem, reaffirm or surrender the collateral and cannot keep the collateral and otherwise continue making payments. When a debtor files a Chapter 7 bankruptcy, the Bankruptcy Code provides that the debtor(s) must either: 1) “reaffirm” their secured obligations and keep the collateral pledged on the […]

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26
Apr
2022

Co-Debtor’s Probate Estate Claim – Stay Lifted

Co-Signer’s Probate Estate Claim allowed even though primary Debtor agreed to repay loan 100% through Chapter 13 Bankruptcy Plan. Here, Callaway Bank issued a loan to Ralph Case who later filed a Chapter 13 bankruptcy. The loan was cosigned by Ruth Trammell, who passed away prior to Case’s filing for bankruptcy. The bank filed a motion […]

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18
Apr
2022

Nondischargeable Debt: False Financial Statement

In these two cases, the bankruptcy court entered two nondischargeable judgments against the same debtor in favor of Pittsburgh Police Federal Credit Union and Allegheny County No. 1 Federal Credit Union. Here, the debtor was a member of both Pittsburgh Police Federal Credit Union (hereinafter “PPFCU”) and Allegheny County No. 1 Federal Credit Union (hereinafter […]

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14
Apr
2022

Voluntary Payments: Automatic Stay Violation

Here, the Chapter 7 Debtor made voluntary payments to creditor after debtor’s filing for bankruptcy. Both debtor and creditor agreed that the post-petition payments would be applied to prepetition debts owed to the creditor. The debtor made more than $39,000 of voluntary payments to creditor.   Some two years after the voluntary payments were made, […]

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« Previous Entries
  • Recently Posted Articles written by: Charels R. Harroun, Attorney at Law

    • Incompetency Defense in Collection Suit
    • Protecting Home Equity Mortgage Portfolios
    • Defective Automobile Lien Enforced
    • Preferential Transfer: Creditor Retains Debtor Garnishment Funds Received within 90-Days of Bankruptcy Filing
    • Refinanced Debt Fraud – No New Money
    • Collateral Taken Out-of-State
    • Chapter 13 Plan Cures Arrearage
    • Fraudulent Check Endorsement by Borrower
    • Creditor Required to Release Lien
    • Collection Letter Not Required Before Filing Suit
    • Insurance Lapse: Lift Stay & Repossess Collateral

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