A recent bankruptcy court case has proven costly for Green Tree Servicing, LLC. In re Loe, Bankr. ND Texas, 2013

In 2002, a lady divorced her husband, and agreed in the divorce decree to surrender her interest in a mobile home to her husband. He also agreed to pay the balance due on the mobile home.

In 2003, the lady filed chapter 7 bankruptcy and in her bankruptcy schedules, said that she intended "to Surrender (the mobile home) to Ex-Husband." Her personal liability for the debt was therefore extinguished.

In 2011, she filed chapter 13 for different reasons, but Green Tree filed a proof of claim in her case,  a formal request to the bankruptcy court for payment. In a modified plan, she provided in her chapter 13 plan that she surrendered her interest in the mobile home to Green Tree.

Nevertheless, Green Tree started calling her and demanding payment, attempting to collect the debt. The debtor notified her bankruptcy attorney, who brought an adversary proceeding or lawsuit against Green Tree in bankruptcy court for violating the chapter 7 discharge injunction, and for Green Tree's violation of the automatic stay in the chapter 13 case per 11 USC Sec. 362(a), the federal law that protects people in bankruptcy from their creditors.

After a trial, the Bankruptcy Court determined that Green Tree's filing of a proof of claim in the chapter 13 case was not a stay violation, because the debtor had not properly surrendered her interest in the mobile home to Green Tree. Instead she surrendered it to her ex-husband, so Green Tree could reasonably argue she still had an "in-rem" or "property only" interest in it.

However, the court said that the lady did properly surrender the mobile home in the chapter 13 case. Therefore the Court found that Green Tree had violated the chapter 7 discharge injunction, and also the chapter 13 automatic stay, by calling the debtor and trying to collect the unpaid debt.

The court then gave the debtor an award of $1000 in actual damages, and also ordered Green Tree to pay her attorney fees of $20,212.70.

The court additionally found that Green Tree "willfully and intentionally violated orders of this court" and assessed punitive damages against them of $25,000 "which the court considers sufficient to deter similar conduct in the future."

Do you think the court made the correct decision? Should Green Tree have been punished like this? Or if so, was it too much? Was it not enough? Please tell us what you think by posting a comment below.

J Thomas Black
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Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization
A joke considering all the money they are harassing honest bill paying money out of. What is the compensation to the man who DIED of a heart attack after being non stop harrassed by Greentree or the homes valued in the billions they have pushed paying their bills Americans out of? If you or I were doing business wit these Mafia tactics we would be jailed...not able to return to business as usual. Glad to see at least 1 person out of 100's of thousand harrassed and double paying SCARED & honest "victims" of Greentrees illegal tactics got something out of these murderous crooks. This company should be out of business. I am not will I ever be behind....what they do is illegal and they do it to everyone regardless of "good standing" or any other non existant issues Greentree creates for their customers. Horribly abusive, unprofessional and down rightvnasty 3rd world usis like tactics on honest paying Americans.
by mitzt March 8, 2015 at 01:50 AM
I think the court did the right thing. I cannot begin to scratch the surface of the consumer complaints against Green Tree Servicing, LLC that I have read. This is not a bank, it is a debt collection outfit trusted with thousands of peoples information. I do not understand how they can not be stopped from doing the things to consumers I have been reading about. I can only pray that Bud Hibbs can smote them from beyond.
by Diana Welling January 7, 2014 at 06:17 PM
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