In this case, the Federal Court held that a guarantor on a loan is not excused from liability even when the principal debtor files bankruptcy. Here, an obligation to the creditor was guaranteed by another party. The principal debtor filed bankruptcy and proposed to “cram down” the obligation to the creditor. Creditor filed an action against the guarantor […]

ISSUE:  Whether a mortgagee bidding total debt at foreclosure sale can recover post-foreclosure advances for repairs and/or improvements through a deficiency action against mortgagor. CONCLUSION: A mortgagee (Lender) cannot pursue a mortgagor for a deficiency arising from post-foreclosure advances expended to repair or improve the premises. When a mortgagee makes a full credit bid for […]

Here, the debtor, a physician, borrowed money from the bank and promised to secure that loan with a pledge of a $50,000 bond that the debtor could not locate at the time of the loan. The bank agreed to loan the money as long as Dr. Bercier brought in the bond at a later date […]

A clerical error at the New York Department of Motor Vehicles did not invalidate a Michigan Credit Union’s lien on collateral pledged as security.   Norway Community Credit Union issued a loan to debtors secured by their Chevrolet Corsica automobile.   [T]he credit union, located in Michigan, properly perfected its security interest in the vehicle […]

The Uniform Commercial Code(UCC), under which most States operate, dictates that the filing of a financing statement by a creditor is effective for only five years from the date the statement was filed. Thereafter, the debt becomes unsecured. In the event the creditor desires to extend its security interest, the creditor must file a “continuation […]

Right of Rescission: Michigan Court Ruled Each Borrower Must Receive Two Notices of Right to Cancel. The Michigan Court of Appeals has held that a mortgagor who is entitled to a notice of the right to rescind is in fact entitled to two copies of that notice for each borrower. In this case, each borrower […]

Credit Union Board Member and Manager Pledged Embezzled Funds as collateral for Credit Union loan.    Rebecca Caldwell was the manager, secretary and treasurer of Avondale Mills Bevelle Employees Federal Credit Union. She also served on the credit union’s Board of Directors. Caldwell took a blank Certificate of Deposit from the credit union and directed […]

In this case, the U.S. Bankruptcy Court for the District of Rhode Island held that Equitable Credit Union acted properly when it repossessed debtor’s mobile home after the bankruptcy court discharged debtor and the bankruptcy stay had been lifted. The debtor borrowed money from the credit union and granted a security interest to the credit union in his […]

This case held that a credit union’s “freeze” on a bankrupt members’ account violates the bankruptcy court’s automatic stay if the member’s loan secured by the deposit is not in default. In this case, the debtors previously borrowed funds from the credit union and granted to the credit union a security interest in their deposits […]

In this case, a jury awarded the debtor $46,225 plus punitive damages of $100,000. Here, Pioneer Savings loaned $39,000 to Lannigan secured by the debtor’s real estate. The initial interest rate was “8 1/2%”. The loan documentation provided that Pioneer: … may hereafter decrease said interest rate and may also increase the rate upon giving […]