Defective Notice of Right to Cancel results in Truth in Lending Violation and extends borrowers right to rescind. Here, New Maine National Bank granted a loan to the debtors secured by debtors’ residence. At the closing of the loan, the loan officer supplied the debtors with a “Notice of Right to Cancel” (hereinafter “Notice”). Pursuant to the […]

In this case, debtors were granted a Visa credit card account at Harvesters Federal Credit Union. The Visa agreement provided, in pertinent part:   I understand and agree that the credit union has the authority to impress and enforce a lien on all present and future shares in my name to the extent of that […]

Check-kiting scheme results in liability of Bank to Credit Union. Here, Clark Crapps was a member of First Railroad Community Credit Union and also held accounts at Columbia County Bank [Columbia] and First Community Federal Credit Union [Credit Union]. Crapps was engaged in an elaborate check-kiting scheme for which neither Columbia nor the Credit Union was aware. Columbia […]

Debtor’s attempt to re-open his bankruptcy case was denied by the Court when debtor asked to reopen his bankruptcy case fourteen months after the case was closed.   The debtor sought to reopen the case and add an additional creditor which had not been listed in the initial case. The bankruptcy court applied the “doctrine of laches”, which prohibits an […]

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 […]

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 […]

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 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 […]

Excessive gambling debts result in nondischargeable debt. Here, FCC National Bank, and several other creditors, objected to the debtor’s bankruptcy on the basis that the debtor borrowed money without any ability or intention to repay the debts. Prior to the filing of bankruptcy, the debtor withdrew $40,000.00 from a trust account. She gave away $20,000.00 […]

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. In this case, an obligation to the creditor was guaranteed by a third-party. The principal debtor filed bankruptcy and proposed to “cram down” the obligation to the creditor. Creditor filed an action […]