I receive many calls from people facing the foreclosure of their home. They want to know whether they will remain liable after the foreclosure to their mortgage lender for any part of the mortgage debt. For a period of 90 days after the sheriffs sale, the mortgage lender has the option of filing a lawsuit against the borrower, if the amount received at the sale is insufficient to pay the mortgage in full. Generally, the smaller the amount owed, the less likely it is that the lender will sue.
Along with a college education often comes the debt that paid for it. It is not uncommon for graduates to find themselves in six figure debt, and sometimes with no employment opportunities, or in low paying jobs. It would then be logical that bankruptcy could be used to discharge student loans.
In a prior blog post, we discussed the Conley v. Guerrero decision, in which Judge Coleman held that an attorney review letter was validly and effectively sent, by fax and email, although the contract in the transaction and the New Jersey Supreme Court decision in New Jersey State Bar Association v. New Jersey Association of Realtor Boards required the letter to be sent by certified mail, telegram or personal delivery.
The New Jersey Supreme Court in its 2015 decision in Kaye v. Rosefielde confirmed that an employer suing a disloyal employee could recover the compensation paid to the employee during the period of disloyalty, even if the disloyal conduct did not actually damage the employer. The court found that “disgorgement” is an equitable remedy derived from a principle of contract law, that where the employee breaches the duty of loyalty, which is “at the heart of the employment relationship”, the employee may not be entitled to keep the compensation paid by the employer during such breaches. It noted that disgorgement serves a deterrent purpose, letting a disloyal employee know that there is a serious financial consequence.
An adversary proceeding in bankruptcy is a lawsuit filed within the debtor’s bankruptcy case. Any party can file an adversary proceeding in a bankruptcy — the trustee, a creditor, or the debtor. The purpose of an adversary proceeding is to obtain some form of relief that requires a judge’s attention and cannot be accomplished through the routine bankruptcy case itself.
An adversary proceeding starts when the person who is suing (the plaintiff) files a complaint with the bankruptcy court. Once the defendant is served with the complaint, s/he has a certain number of days to respond,. To respond, the defendant must file a written answer. If the defendant does not file an answer on or before the deadline, the court will enter a default, and the plaintiff can obtain a default judgment. Otherwise the adversary case will be decided on the merits by trial or dispositive motion.
Today, many bankruptcy websites offer a free review by having you fill out an online form. In many cases, this is then forwarded to a law firm in your area who you may or may not know. Then at some point after that, you will get a call from some staff employee of that law firm to discuss this further. Note that in this process, you are not at any time speaking to a bankruptcy attorney.