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Ellen , Attorney
Category: Business Law
Satisfied Customers: 36714
Experience:  25 years of experience helping people like you.
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FOR FIVE STAR LAW... Hopeless again... You wont believe

Customer Question


Hopeless again... You won't believe what happened with Issue #2—my mother died three days before the final hearing and my brother just PROCLAIMED himself sole-successor trustee...and on and on... I believe it is finally getting resolved, but the stress literally almost killed me.

But ISSUE #1: The Stockbroker and Banker case...

Since the stockbroker lost all of my stock, including my collateral to back a $100k+ bank loan by double pledging it to margin, I must now file Chapter 7. All debt (credit cards and this bank loan are or SHOULD BE) only in my name.

That bank loan somehow now reflects BOTH of our names, but my husband was NEVER even told he was on that loan and I can't recall when (since the mid-90s) this occurred—or why!

Here is my question:

Since the bank WASTED my collateral (130% of loan amount in stock) by allowing it to be doubled pledged by my broker (who as you may remember is a board member and founder of that SAME BANK) through margin, there is NO collateral left and I cannot replace it as I have NO assets left after exemptions—and no personal income except $550 a month Social Security, which is exempt.

I totally qualify for Individual Chapter 7, but I need to include that bank loan. Since the loan was in MY name since 1996 and since the collateral STOCK was always and only in MY NAME, I am positive the bank just slid my husband's name on the loan by saying "just need both your accounting..." or something as inane and discriminatory—and without our awareness since during those years we also had five or six different mortgages and second mortgages in both names—and were constantly being called in to sign documents. By the way not one of those loans was EVER late and all were paid and closed, as agreed.

I need to know if you believe I have grounds for having my husband’s name removed from this loan before filing Chapter 7 individually since the UCC, Article 9, section 203, I believe, states that:

"...a security interest is not enforceable against the debtor or third parties with respect to the collateral and does not attach unless:

(a) the collateral is in the possession of the secured party pursuant to agreement, or the debtor has signed a security agreement…
(b) value has been given; AND
(c) the debtor has rights in the collateral."

My husband's name was NEVER on that stock as collateral and therefore he had no rights in it. And I’m sure the bank committed fraud or discrimination (they ABHOR doing business with women) by somehow adding my husband to the note (around here everyone is so TRUSTED that this is never questioned...or wasn't). My attorney has ordered a securitization audit of the note to make the bank produce all documents, signatures, etc.

I just value your opinion so much and wanted to see if you felt I have legal claim to have this loan revert to my name only, so I could have the loan discharged in an individual Chapter 7; or do you think I have sufficient grounds to file my Chapter 7 as the loan is now (still having both names—fraudulently, I believe) and list these stated reasons for the bankruptcy court as explanation?

Thank you so much... I have wanted to ask you a hundred questions in the last few months, but my funds are SO LIMITED...

Submitted: 3 years ago.
Category: Business Law
Expert:  Ellen replied 3 years ago.
*Nothing herein is intended as legal advice, only intended as general information to better help yourself.*

Hi Laura,

My condolences on the loss of your mother.

Please give me about one hour to carefully read your question and think about it.
Customer: replied 3 years ago.
Yes, thank you. And a big bonus, as usual. And I appreciate the kind remarks about my mother. It was a HELL of a year, to be sure...
Expert:  Ellen replied 3 years ago.
Hi Laura,

Here are my thoughts on this matter:

1. UCC, Article 9, section 203 does not appear to offer assistance in removing your husband's name from the loan. The security interest in the stock is the collateralization of the debt. If the security interest fails, the debt remains as unsecured as to your husband.

2. Your husband appears to have an action against the bank if he was defrauded into signing the loan

3. It may be best to complete securitization audit prior to filing the chapter 7 bankruptcy. Your attorney may uncover evidence to challenge the validity of the securitization itself

Please let me know your thoughts
Customer: replied 3 years ago.
Thank you; I was afraid of that. I can always add my husband and file jointly since we still pass the means test; it is just so horrendous for him to even consider. I will wait then until the results are in. In your opinion if I tried to file now on my own and include this loan, I could risk not having it discharged, right?
Expert:  Ellen replied 3 years ago.

If you file a chapter 7 bankruptcy now, you would be required to include the loan. Your liability under the loan would likely be discharged but not your husbands liability under the loan. Additionally once you file a bankruptcy, your claim against the bank for its misdealings becomes an asset of the bankruptcy estate.
Ellen, Attorney
Category: Business Law
Satisfied Customers: 36714
Experience: 25 years of experience helping people like you.
Ellen and 4 other Business Law Specialists are ready to help you
Customer: replied 3 years ago.
Thank you very much. I don't intend to get anything out of hte bank any longer--I have to choose my battles. Just getting the loan discharged is sufficient pay back for them, But i will wait for more information.

Thank you so much. I left you a $50 tip. If it doesn't show up, please let me know.

You are the best as usual!

Expert:  Ellen replied 3 years ago.
Thank you so much for your repeat business and generous bonus. Please let me know if I can assist you in the future. If you have a follow-up question please come back to this page and ask without charge. I wish you the best
Customer: replied 3 years ago.
Thank you again. I sure wish I had you as my personal lawyer. Anyone out there reading this, please know that this attorney is unrivaled in knowledge...and compassion! THE BEST!

I will make it; don't worry. If nothing else this has taught me two things: one, this can happen to anyone; and 2, it's NOT life or death...or sufficient to steal my spirit or humanity. THEY will NOT get me!

Thanks again, sincerely,
Expert:  Ellen replied 3 years ago.
Thank you Laura for sharing your HOPE. Best regards
Expert:  Ellen replied 3 years ago.

Hi Laura,


"I left you a $50 tip. If it doesn't show up, please let me know."


I just wanted to let you know that the $50 bonus did not register.


Customer: replied 3 years ago.
Well, let me try to fix that right now!

Thanks again for are wonderful!

Expert:  Ellen replied 3 years ago.
You are the best - it went through this time – thank you again

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