Posted in News & Articles on October 17, 2013
Attorney James M. Nugent recently prevailed in an important bankruptcy decision on behalf of consumers in Connecticut. A challenge was raised to the prevalent practice of lenders to add late charges to their claims against debtors. However, controlling state law prohibits doing so after the loan has been accelerated. The bankruptcy courts had not yet ruled.
Attorney Nugent’s objection to these charges was upheld by Judge Weil of the New Haven Bankruptcy Court. The lender appealed. The U.S. District Court (Kravitz, J.) then upheld the bankruptcy court on appeal. This issue frequently arises in bankruptcy court and, for now, the issue has been resolved in favor of consumers.
The case is styled Wells Fargo Bank Minnesota, N.A. As Trustee v. Patricia Ann Guarnieri, U.S. Bankruptcy Court, District of Connecticut, (Civil No. 3:03CV1591(MRK). Click case for a full text of the opinion in Adobe Acrobat .pdf format. (332k).