PERSONAL LIABILITY VERSUS CORPORATE LIABILITY. In this case, the debtors, McClellan and Hoyt, were, respectively, the president and secretary of Calistoga Court Club, Inc. Calistoga Court Club, Inc. applied for and received a loan for $30,420 from a predecessor in interest to Mountain America Credit Union. The loan went into default and the debtors’ corporation […]

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 this case, the bankruptcy court denied debtors’ discharge after debtors transferred property, without consideration, to close friends and relatives with the intent to hinder, delay or defraud creditors. Here, debtors filed a Chapter 7 bankruptcy and a creditor filed an adversary complaint with the court seeking to deny debtors’ discharge. The creditor’s complaint alleged […]

In this case, a credit union member obtained two loans from L.C.E. Federal Credit Union secured by his Jeep Comanche and Mazda RX-7. The loans went into default and both vehicles were repossessed by the credit union. Thereafter, the credit union sent a notice to the debtor advising him that the vehicles would be sold at […]

Offset upheld against Credit Union Member Shares pledged as collateral.   In this case, the bankruptcy court held that a credit union properly offset a member’s share deposits and applied them to the debtor’s loan balance. Here, the debtor borrowed funds from the Utica Community Federal Credit Union and signed a security agreement pledging all deposits at […]

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

In the case,  a member of Austin Area Teachers Federal Credit Union (Austin Area) pledged her certificate of deposit at the credit union as collateral for her son’s note to First City Bank-Northwest Hills (First City). When the son defaulted on the loan, First City demanded the credit union release the pledged certificate of deposit to […]

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 […]