Fraudulent loan application results in Nondischargeable debt. In this case, two debtors applied for and closed on a mortgage with American General Finance, Inc. (hereinafter “American General”). The debtors represented to American General that they only had one mortgage on their residence. American General intended to grant the debtors a loan secured by a second […]

In this case, the credit union brought an adversary proceeding to determine dischargeability of a debt secured by a classic automobile, which the Chapter 7 debtor had dismantled into composite parts that he then sold. Here, debtor initially borrowed $6,000 from Moog Employees Federal Credit Union to finance the purchase of a 1970 Chevrolet Camaro Z-28, […]

In this case, the court found that Christmas gift charges on the debtor’s credit card would not be discharged by the bankruptcy court. In this unique case, the court held that the creditor need not prove the debtor made a misrepresentation to the creditor in the use of the credit card. In this case, debtor […]

In this case the debtor owed Bank One nearly $2,000.00 on a credit card when he filed a Chapter 7 Bankruptcy. The bank’s attorney proceeded to schedule an examination of the debtor, under oath, often referred to as a Rule 2004 exam. The bank’s attorney had an Order entered with the Court requiring the debtor […]

In this case, a U.S. Bankruptcy Court ruled that Calumet National Bank’s recorded mortgage was invalid simply because the notary’s acknowledgement did not recite who appeared before the notary and acknowledged execution of the mortgage. Here, debtors borrowed more than $148,000 from Calumet National Bank and signed a mortgage on their real estate securing the debt. […]

Corporate creditors and credit unions, normally direct their own attorney to appear in certain cases at the “first meeting of creditors” when a debtor files for bankruptcy. The bankruptcy court has held that a corporate creditor may have a regular employee, who is not an attorney, appear on its behalf at the first meeting of […]

In this case, the Bankruptcy Court held that a state court judgment was nondischargeable in bankruptcy. A state court judgment previously found the debtor liable for fraud. Although the federal court has exclusive jurisdiction as to determining dischargeability in bankruptcy, the federal court nevertheless found the debtor was precluded from refuting the state court judgment. […]

This case allowed a Tardy Chapter 13 Claim.  In every Chapter 13 bankruptcy, the court establishes a deadline for creditors to file a proof of claim. Creditors are advised of the last date to file a proof of claim in the initial notice of debtor’s filing for bankruptcy that is sent out by the court […]

A Texas Bankruptcy Court previously held that a debtor in a Chapter 13 bankruptcy case does not need to pay interest on the arrearage owing unless the contractual language in the mortgage provided for interest in the event of unpaid arrearages and the filing of bankruptcy. See In re Sanchez (Bkrtcy. E.D. Texas, Judge Sharp, WL […]

This U.S. Supreme Court ruling prohibits the debtors ability to “strip- down” a secured mortgage in a Chapter 7 bankruptcy case.    A “strip-down” would allow the debtor to only be obligated to repay the fair market value of the property, even though the outstanding debt may be significantly greater than the value of the mortgaged property.   Here, in […]