The Michigan Supreme Court has held that the Credit Union is protected as a secured party under the “loss payable” clause of an insurance policy, even if the Credit Union member burned the collateral and made false statements to the insurance company on its claim of loss. Here, the Credit Union member executed an installment note with State Employees Credit Union secured […]

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 mortgage; American General obtained a title search […]

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 […]

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 […]

Bank-Fund Staff Federal Credit Union held a mortgage on debtors’ real estate.  The loan was in default and the credit union sought to foreclose and obtain possession of the property. The credit union initiated foreclosure proceedings and sent a Notice of Foreclosure Sale to debtors. The foreclosure notice, however, erroneously stated that the members did […]

Here, DeKaalb County Farm Bureau Cooperative Association Credit Union had three mortgages on two different pieces of the members’ real estate. The Credit Union instituted foreclosure on one of its mortgages secured by real estate that the debtors were leasing to another party. In the foreclosure action, the Credit Union requested the trial court to […]

Here, the Court considered whether a debtor may keep property secured by a mortgage to the credit union even if the debtor does not either reaffirm, surrender or redeem the obligation.   In this case, GNC Credit Union held a mortgage issued by the debtors and secured by their home. The balance on the loan was […]

Bankrupt Debtor may only redeem collateral in one payment. Redemption installment payments prohibited if debtor elects to retain vehicle.     Here, debtor sought to redeem Ford Motor Credit collateral by paying installment payments for the value of the vehicle, instead of one lump-sum redemption payment. Section 722 of the Bankruptcy Code provides, in pertinent part: An individual debtor may, whether or not the […]

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 […]

Federal Right of Rescission applies to additional funds advanced with refinance.   The Truth in Lending Act (TILA) was adopted by Congress to promote the informed use of consumer credit. Consumers may rescind a credit transaction within three business days of its consummation where the lender acquires a mortgage interest in the debtor’s principal dwelling as security. […]