The Sixth Circuit Court has ruled that the Fair Debt Collection Practices Act (FDCPA) does not require an attorney to send a collection letter to the borrowers before a creditor files suit against the borrower(s).   In this case, the creditor’s attorney did not send a demand letter to the debtor prior to filing suit. Here, the Sixth Circuit additionally ruled that […]

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 […]

In the case of Union Bank & Trust v. Elmore County National Bank (Supreme Court of Alabama, Case No. 1900804), the Union Bank’s loan to a debtor resulted in a $10,900 loss. Here, Union Bank issued a loan to one Bill Burnette in the amount of $10,900 for the purpose of purchasing a Dodge Caravan. […]

Borrower moving collateral to another State dissolved security interest when creditor did not file a financing statement in Georgia within four months after the debtor moved to that state. Facts: 1. Debtor, Specialty Contracting and Supply Company, granted a security interest in its equipment, among other items of collateral, to one Richard Fraley; Fraley was an officer […]

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 […]

A creditor who improperly identified its secured interest on a vehicle title as the “owner” instead of a “lienholder” was sufficient to perfect its security interest in the motor vehicle. In this case, the creditor intended to place a lien on the debtor’s vehicle, however, creditor mistakenly designated itself on the certificate of title as the […]

In this case, Sikorsky Federal Credit Union of Connecticut brought suit on a note signed by the debtor in the amount of $5,253.64. The note provided for sixty installment payments; the purpose for the loan was to extinguish existing debts as well as pay, in part, for the funeral of the debtor’s longtime friend. The […]

Here, the Court held that the Credit Union’s mortgage on a member’s real estate, inadvertently marked as “cancelled” when the loan was not paid, was still enforceable. This mortgage, sold by the Credit Union to the Federal Home Loan Mortgage Corp., was accidentally stamped as “cancelled” or paid. The mortgage was foreclosed upon and the […]

In some states such as Texas, a debtor’s wages are generally not subject to garnishment. Here, however, this Texas debtor’s wages were directly deposited into the debtor’s account at I.B.M. Employees Southwest Federal Credit Union.    A judgment creditor thereafter garnished debtor’s account at the credit union and debtor brought an action to dissolve the garnishment, […]

False loan application results in nondischargeable debt. Here, debtor submitted a loan application to the bank and represented that he and his wife were on the title of debtor’s residence. In fact, the residence was only found to be titled in debtor’s wife’s name. Thereafter, debtor filed an individual Chapter 7 bankruptcy and the bank filed […]