Bankruptcy and unresolved disputes…
April 17th, 2007 by Questions
If I file for bankruptcy and there is an unresolved dispute over one of the debts who prevails? the debtor or the creditor?
In my case there is a dispute over the amount of money that I owe to a particular lender. I had taken a loan of 10K in May 2006 at an agreed upon interest rate of 16% and another loan of 5K in December 2006 at an interest rate of 21.99%. In February 2007 I had paid the lender 5K , I have the cancelled check to prove it. I noted on the letter accompanying the check that the amount should be used to eliminate the higher interest debt , the lender used it instead to reduce the lower interest debt. The next month my check was sent a week before due date , the lender stated that the check arrived 5 days late and jacked up the interest rate on BOTH loans to 28.99% and assessed a late fee of 300 dollars. So according to that lender I owe him 14K but I have disputed that and state that I owe him only 11K.
Each of us has been threatening to take the other to court over this issue but nobody has. Who resolves that dispute if I declare bankruptcy?
I actually needn\’t care about whether this lender gets a higher proportion of my assets but then my sense of fair play prevents me from ignoring this. There are other creditors who have treated me better and I hate to see them getting shafted by this unethical lender.