Can a bank come after collateral after taking payments from a Chapter 13 that has been disbursed?
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Can a bank come after collateral after taking payments from a Chapter 13 that has been disbursed?
My mom has a CD for $10,000 that was used as collateral for a personal loan for my brother. He filed and the bank never challenged, nor did they call in the CD to satisfy the debt. The debt was also $10,000. The bank accepted $1100 in payments through the trustee, the 5 years of payments ended Sept. 2011. My mom recently tried to move the CD but was told there was a hold on it and she had to roll it over. Are they still able to take funds out of it to satisfy the debt after everything is over and disbursed?
Asked on June 27, 2012 under Bankruptcy Law, Ohio
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
If your brother filed a bankruptcy petition where it was approved under certain terms by the court and all creditors and the terms of the bankruptcy were adhered to, then the $10,000 collateral loan that your mother placed for a loan with respect to one of the creditors of your brother should be able to be moved by her if in fact your brother has satisfied his contractual obligations to that particular creditor in full.
I suggest that your mother consult further with an attorney about her situation experienced in contract law.
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