In this case, a creditor obtained a state court judgment against Dodds and garnished her wages. The garnishment was issued by the state court prior to debtor’s filing bankruptcy. In addition, the garnishment was served and debtor’s employer withheld $214.78 from her wages. Eleven days after the funds were withheld from debtor’s paycheck, Dodds filed […]

Creditors must be aware that a bankruptcy filing by a principal debtor may not toll (delay) the Statute of Limitations to proceed against a non-bankruptcy co-debtor. The Credit Union in this case was prevented from collecting a deficiency amount owed and suffered a financial loss. This Court held that a Chapter 11 bankruptcy filing does not toll […]

Here, Blackstone Financial Services “Blackstone” held a loan with the debtor secured by debtor’s automobile. The loan was in default and Blackstone had a repossession order out on the collateral. Although Fisher filed a Chapter 7 bankruptcy, an individual allegedly from Blackstone, referred to here as Mr. Clemente, contacted Fisher by telephone and stated that […]

Court orders collection against non-filing bankruptcy codebtor allowed to the extent that said creditor was not paid through the plan.   Debtors filed a Chapter 13 bankruptcy. Prior to filing a Chapter 13 bankruptcy, debtors borrowed money from First Interstate Bank of Texas and Suzanne’s father cosigned for the debt. Debtors’ Chapter 13 repayment plan proposed a […]

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 […]

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 […]

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 […]

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 […]

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 […]

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. […]