Legal Question in Credit and Debt Law in Wisconsin

I think the bank is pulling a fast one.

In 1996 I filed and went through with a Chapter 7 bankruptcy. I renegotiated with the bank to reassume. The mortgage was split in half. From than until the present I have been paying on the first half. The second half was placed in a "charge down account" and accrued no interest whatsoever, but instead, lay dormant. The then vice-president of the bank informed me at a later date, after the signing of all paperwork pertaining to the mortgage, that if the livestock facility on the premises were to become active in the future he would expect payments to begin on the "charge down account". There was then nor has there been between now and then anything in writing signed by me accepting this condition. Today I received a notice that the "charge down account" will be due on 5/21 along with over $14,000.00 in interest and a $35.00 late penalty.

Can they do this?


Asked on 5/18/99, 9:08 pm

1 Answer from Attorneys
Stephen Silverberg Silverberg Law Office

Re: I think the bank is pulling a fast one.

Did you have a lawyer when you went thru your Ch. 7? If so, what advice did he give regarding your reaffirmation agreement? Was this possibility explained to you?

I think you should immediately consult a bankruptcy attorney DIFFERENT from the one (if any) who handled your Ch. 7. One way to find a good one is to check the list of Chapter 7 Trustees used by your local bankruptcy court -- many bankruptcy courts allow their trustees to also represent debtors where there is no conflict of interest between specific parties.

The attorney you contact will need to look at ALL the documents relating to this transaction, and will definitely want to know whether this particular arrangment was FILED with the bankruptcy court and APPROVED by the bankruptcy judge. It is possible that the entire arrangement will be shown to be unenforceable, and that, to avoid further problems with the court, your lender will write off the rest of the loan.

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Answered on 5/25/99, 9:58 am


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