Legal Question in Credit and Debt Law in New Jersey

i have several different loans with one financial institution one home equity loan one car loan and one personal unsecured loan.i have fallen behind on all of the payments on all of these loans due to a loss of income.my daughter wanted to try to help me out by making a payment on the home equity loan which is the largest loan of the three.she wrote a check amounting to one month payment toward the home equity loan and noted the check to be applied to home equity loan only along with the payment coupon for the home equity loan.my daughter wrote the check from her personal checking account which is not affiliated with the financial institution that i have these loans with.upon reviewing my accounts i noticed that her check was not applied to the home equity loan but instead was applied to the personal unsecured loan.the representative said that any money recieved has to go to the unsecured loan first.my question is is this legal or would this be considered misappropriation of funds.


Asked on 2/14/10, 6:07 am

1 Answer from Attorneys
John Corbett Corbett Law Firm LLC

The financial institution has no inherent right to apply third-party funds in a way different than that specified by the payor even if the agreement with you gives them a right to setoff a /surplus/. There are various civil and criminal remedies that may apply. I suggest that you have your lawyer write and demand that the funds be applied as intended.

See also: http://info.corbettlaw.net/lawguru.htm

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Answered on 2/22/10, 11:35 am


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