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Bankruptcy Court Denies Bank's Motion For Entry Of A Final Judgment

Posted By admin || 15-Sep-2009

In the bankruptcy case of de la Fuente, Antoinette and Lenord; In re (De la Fuente v. Wells Fargo Bank), the bankruptcy court denied the lender's motion for entry of a final judgment. The details of the bankruptcy case: When Wells Fargo Bank imposed fees on the Chapter 13 debtors' account, the debtors accused the bank of violating the automatic stay and bankruptcy confirmation order. The attorneys for the debtors and the bank announced that they had reached a settlement on the matter. The bankruptcy court requested that the settlement be submitted in writing; but the parties failed to do so because they were unable to reach an agreement on the escrow amount. Eventually, the bank filed a Motion for Entry of Final Judgment which was denied by the bankruptcy court because approving it would violate the statue of frauds. The bankruptcy court said: "In the suit at bar, the parties have failed to provide a signed written agreement to the Court. Even though the parties recited the terms of their settlement on the record, Texas law mandates that real estate loan agreements be: (a) in writing; and (b) signed by the party who has been charged with the promise. Here, the parties have failed to satisfy either of these two requirements; the parties have never submitted an agreed judgment which either they or their respective counsel have signed." As an added note, to protect yourself as a debtor make sure that any settlements you come to with any creditors are in writing. It is also advisable that debtors have an attorney review any settlement agreements before signing and handing over money to creditors.

(Source: Consumer Bankruptcy News, Volume 19, Issue 18, page 18)

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