Legal Question in Credit and Debt Law in Michigan

My husband was held responsible for a 2nd mortgage during his divorce. The loan was reaffirmed during a bankruptcy in 2008. It later went to collections when he lost his job and a payment plan was set up. We recently found out that the case had and administrative closing due to bankruptcy in 2011. After 8 years he owed more than when he started as they added 13% interest to the agreement. We pulled the register of actions and found the wording exactly like the agreement he signed except for the interest. Why would a judge make a payment plan that could never be paid off? We did hire an attorney to go after them but all they accomplished was getting them to close the file. Should we not be able to get some of the money back that we paid? My husband was never notified of the discharge and the collection agency continued to tell him he owed the money and he would need to make larger payments to pay off the debt. At one point I called to get a payment history and was asked if I had the right account number as the one I was calling about had been written off due to bankruptcy in 2012. Wasn't it illegal for them to continue to collect. We've tried to hire a new attorney but all they see is the debt was reaffirmed and say we have no case. Is this true?


Asked on 11/03/16, 5:05 pm

1 Answer from Attorneys
Andrew Campbell Andrew L Attorney at Law

You skipped important facts. I assume a lawsuit was filed in state court. I am guessing he didn't fight it. If they got a judgment and then there was an administrative closing then really it doesn't matter. Did he file bk after the 2008 bk? If he reaffirmed the debt then he reaffirmed the debt. Never do that and never agree to these things in a divorce. There was probably no choice. The good news is that his judgment will only be on his report for 7 years (typically). The bad news is that judgments can be renewed after 10 years and possibly more than once.

As to the 13% if the agreement authorized that amount then that is what they charge. The payment plan you referenced in your third sentence must mean that he lost his job, it went to collections, then he got sued in state court, a payment plan through the court was set-up but he couldn't meet it. The judge doesn't have authority to lower interest unless the underlying documents didn't authorize it. The judge doesn't have the power to simply eliminate interest when it was part of the original contract. Based on what you told me I just don't see a case.

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Answered on 11/03/16, 5:19 pm


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