If I loaned money to a friend who committed bank fraud (I had to wire the money within minutes of having received the call from the friend directly to the Bank’s fraud recovery department) and that friend subsequently files Chapter 13, is it safe to assume that I have no recourse but to wait in line with other unsecured creditors?
Of course, I did not want the person to go to jail and did not obtain any promissory note or security agreement at the time the funds were wired to the bank’s fraud recovery department.
I have not yet obtained a promissory note and mortgage as I assume it could now be disallowed by the trustee because the money was disbursed in mid-February and I’ll bet there’s a "consideration" issue now.
What do you recommend? Is it too late to get a note and/or secure the debt. The friend has yet to file Chapter XIII yet.
Would there be any priority in my payment becuase I kept the person out of jail?
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I recently worked on a case that demonstrated the need for Chapter 13 attorneys to remain alert when dealing with county property taxes and Chapter 13 debtors.
In this case, my client was both delinquent in his payment of county property taxes and his taxes were not being escrowed by the mortgage company. Because of the delinquency, I included the county tax commissioner as a creditor in the case. Because my client's county property taxes were not being escrowed, I allocated approximately $300 per month as a monthly tax escrow so that he would be able to pay the tax bill later this year.
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