Can a creditor double their money after a default by joint debtors? Can a creditor double their money after a default by joint debtors? In other words, lets say that two people jointly owe a bank $100,000 and both are fully responsible for the loan. The loan goes into default. Now, obviously the bank (or other creditor) can sue both of the debtors separately if the bank wishes. This could potentially result in two judgements, each for $100,000 against both of the debtors. Thus, it would appear that the bank has doubled its money. Is there anything that can stop this from happening?
This is called double recovery, double compensation or over-recovery, and it is usually prohibited. The rule against double recovery is also known as the one-satisfaction rule. Courts may give effect to the rule by: refusing to enforce a judgment under the relevant civil procedure rules to the extent that it has already been recovered from a co-defendant, deducting damages already recovered from the amount awarded in any subsequent lawsuit, or ordering the restitution of doubly-recovered payments under the doctrine of unjust enrichment. The rule is an ancient principle of equity which developed over many centuries. The precise way in which the rule will be applied today depends on the jurisdiction and the nature of the claim. I'll outline two 18th century cases which establish the basic principle. For further information, consult a civil procedure textbook in your jurisdiction. Two early cases establishing the unjustness of double recovery In Moses v Macferlan (1760) 2 Burrow 1005, Moses and Macferlan settled a debt of £26 by agreeing that Moses would pay Macferlan £20 and indorse over four promissory notes to the value of 30s each (£6 total). Macferlan agreed to release Moses from liability as an indorser, but when Macferlan failed to recover the value of the notes from the issuer, he sued Moses in the Court of Conscience. Because that court's jurisdiction was limited to debts of up to 40s, it could not consider the terms of the £26 settlement and held Moses liable. Moses paid the £6, but successfully recovered it in the Court of King's Bench. Lord Mansfield said (at 1009): Money may be recovered by a right and legal judgment; and yet the iniquity of keeping that money may be manifest, upon grounds which could not be used by way of defence against the judgment. In Bird v Randall (1762) 3 Burrow 1345, a journeyman (Burford) contracted to work for a silk dresser (Bird) for five years. After just over a year, Burford left. Bird sued and obtained a judgment against Burford. Bird then sued Randall for 'enticing and seducing' Burford out of his service. After the case against Randall was commenced, but before it went to trial, Burford paid the first judgment. Randall then argued that Bird's action could not be maintained. Lord Mansfield said (at 1353): [T]he plaintiff must recover upon the justice and conscience of his case, and upon that only ... the penalty recovered by him from the servant was actually received by him before the present action came on to be tried; without any sort of difficulty ... [this] is against conscience ... If he had actually recovered it, through the defendant's not knowing "that the penalty had been paid," an action would lie against him, for money had and received: like the case out of the court of conscience, not long since determined in this court [Moses v Macferlan]. The double recovery rule in the modern United States In the scenario posed in the question, any attempt at double recovery is likely to be rejected without the need for detailed legal argument. Such a straightforward case would probably be settled without litigation, on terms providing for the debt to be apportioned between the joint debtors. But assuming that this doesn't happen, in a federal case, rule 60(b)(5) of the Federal Rules of Civil Procedure would apply: On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons ... the judgment has been satisfied, released, or discharged[.] Different rules and procedures apply in the various State jurisdictions, but the underlying principles are generally similar. The theoretical and historical basis of the rule against double recovery, as an aspect of the law of restitution and unjust enrichment, continues to attract a great deal of academic and judicial attention in Commonwealth countries, although it seems to be of less interest to American lawyers: Saiman, 'Restitution in America: Why the US Refuses to Join the Global Restitution Party' (2008) 28(1) Oxford Journal of Legal Studies 99–126.
Generally (at least in the US), you cannot file criminal charges unless you are a prosecutor. Criminal charges are brought by the state on behalf of society as a whole; the goal of criminal charges is not to help or compensate the victim, it's to punish the offender and benefit society. The victim will often obtain restitution payments, but they are pretty much bolted on to a procedure not focused on compensating the victim. For instance, if the AG decides to drop charges (which they can do at any point), the charges are dropped. Instead of picking one or the other, you can do both. After the criminal case, if you want, you can file in small claims. You can't collect double, but since they have totally different purposes you don't have to do one or the other.
If by invalidated you mean you do not have to pay it back, no it is not invalidated. The way a loan is supposed to work is that you are given the money and then you could spend it or use the unused portion of the money to pay back the loan. The $400 that you did not use would technically be considered payment on the loan and you would owe $300.
The issue is not enforceability per se, it is the problem of proving what you agreed to. If the landlord adds conditions that are against your interest, he would need to show that you agreed to those conditions: if you add conditions against his interest, you'd have to likewise prove agreement. Since you both have copies of the agreement, it's a matter of comparison to see if the documents are the same. Rather than voiding the earlier agreement and rewriting everything, the change can be initialed. If you were to cross out the rent and insert a lower figure, you would need proof that he agreed to this (hence, his initials on your copy). In your case, the change is apparently in your interest rather than his, so there's no realistic way that this could become an issue (that I can think of: maybe there's a clause that has to do with the move-in date and moving in early actually works against your interest, in which case he would need to prove that you agreed. The fact of moving in early is sufficient proof of agreement).
Does the original 'No Problem' good will waiver from Party B holds in court? Generally speaking, yes. Party B cannot undo his waiver unless (1) it was induced fraudulently, or (2) the contract supports striking that kind of waivers. There might be other scenarios entitling B to undo his waiver, but all of them are exceptional and don't differ that much from these two alternative conditions. That being said, the evidence (such as the recording) should make it clear that party B waived enforcement of the timeliness of payments, not his entitlement to payments themselves. In the event that party A has already made the payments he missed and scenario (1) or (2) applies, party B's remedies are limited to the concrete losses he incurred as a result of party A's belatedness. The principle is that remedies be available to the extent necessary to avoid injustice, as is frequently contemplated in the Restatement (Second) of Contracts.
It doesn't matter if a debt arises as a result of normal commercial transactions or because of liability for a legal wrong - if you owe money you owe money. While you are alive you are responsible for settling your debts out of your assets as and when they fall due. When you die, your executor has the same responsibility. The executor's first responsibility is to settle the debts of the deceased - only after they have done this can they make distributions to the beneficiaries. One of their duties is to advertise the death of the person and invite anyone who has a claim against the estate (as a creditor or beneficiary) to come forward - the law puts time limits on how long they have to do so. If some of these liabilities are disputed then the executor must hold back enough funds to cover the disputed amount (and the costs of defending against it). Intangible assets (copyright, patents etc.) are no different from tangible assets - they can be offered to the creditor to (part) settle the debt or the can be liquidated (sold) to get cash to settle the debt if there is insufficient cash in the estate. Once all known debts have been settled or successfully denied the executor can distribute whatever assets are left in accordance with the will (or the law if there is no will). If they do all this in accordance with the law then they have no liability. The beneficiaries never have any liability. Sometimes the estate will be insolvent - its liabilities are greater than its assets. The executor's duty in that case is to follow the applicable bankruptcy law.
Short Answer Does a secured loan create obligations beyond the collateral assets? The vast majority of the time it does. Long Answer The default rule is that security interests in assets other than real property is a recourse debt under the Uniform Commercial Code (UCC) (a model statute that individual states can enact voluntarily) and the applicable common law (which is uniform almost everyplace except Louisiana and Puerto Rico). This means that deficiency judgments are allowed if the seized collateral is insufficient to pay the loan in full. It also means that the lender can sue on the debt without foreclosing the collateral at all if the lender wishes to do so. A note and security agreement can be made expressly &quot;non-recourse&quot; which limits recovery to seizure of the collateral and precludes a suit on the debt itself. A secured loan can also become non-recourse if the unsecured debt is discharged in bankruptcy, or if the deadline for filing a claim expires in a probate case. Neither bankruptcy nor the probate claims process extinguish the rights of a secured creditor in the collateral, even if the right to bring a suit on the debt itself is terminated. Special tax rules (that, in substance, disallow tax losses with no economic effect) apply to non-recourse debts (especially the special case of limited liability companies which are taxed as general partnerships but subject to special non-recourse debt rules). When filing a claim in bankruptcy, if the collateral is worth less than the debt, two claims must be filed. One secured claim in an amount equal to the value of the collateral and a second unsecured claim in the amount by which the debt exceeds the value of the collateral. In the case of secured debts in real property, most states mirror the personal property rule (which is very close to Uniform since every state, territory and district in the U.S. had adopted Article 9 of the Uniform Commercial Code governing security interests in property other than real estate). But in a few states (including California), security interests in owner occupied residential real estate (a.k.a. mortgages, liens, encumbrances, or deeds of trust) are truly, or in practice are, effectively non-recourse. Be aware also that there are a handful of isolated, mostly state specific but some federal exceptions. The most pertinent federal exception is for swap agreements and certain other kinds of derivatives (exceptions which are found primarily in the bankruptcy code) involving setoffs. There is a section of the Uniform Commercial Code Article 9 involving &quot;strict settlements&quot; that rarely applies except in pawn arrangements. There are also a number of statutory liens (mostly perfected by possession of the collateral rather than by a UCC-1 financing statement) that create a security interest in collateral by operation of law without a signed security agreement that are sometimes non-recourse (e.g. auto mechanic's liens in selected states).
Yes, the second home will be part of the New York bankruptcy estate. Congress broadly defined property within the bankruptcy estate as all property, "wherever located and by whomever held," subject to limited exemptions. Florida's homestead exemption is among the broadest in the Unite dStates; the value of the property that can be protected is unlimited. See Florida Constitution, Article X, Section 5. As such, I have broken down your question into two parts: May the debtors use the Florida homestead exemption for their Florida home even if they are domiciled in New York? If not, may the debtors use either the Federal or New York state homestead exemptions to protect their Florida home? Exemption Eligibility The debtors can choose between either the federal exemptions of section 522(d) or the exemptions available under New York state and nonbankruptcy federal law; the debtors may not choose the exemptions available under Florida state law. Section 552 of the Bankruptcy Code is the operative statute. To take advantage of a state's exemption scheme, the debtor must either: Be domiciled in the state for the 730 days immediately prior to filing its petition; or If the debtor has not been domiciled in a single state for such period, the state in which the debtor was domiciled for the 180 days immediately preceding the 730-day period (or for the longer portion of that 180 day period). 11 U.S.C. § 522(b)(1)(A): . . . any property that is exempt under Federal law . . . or State or local law that is applicable on the date of the filing of the petition to the place in which the debtor’s domicile has been located for the 730 days immediately preceding the date of the filing of the petition or if the debtor’s domicile has not been located in a single State for such 730-day period, the place in which the debtor’s domicile was located for 180 days immediately preceding the 730-day period or for a longer portion of such 180-day period than in any other place; As a result, the debtor may only utilize either the Federal or New York homestead exemptions. Federal Homestead Exemption Section 522(d)(1) provides a homestead exemption in the amount of $22,975 in value for the debtor's residence. (1) The debtor's aggregate interest, not to exceed $ 22,975 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor. (The linked statute says that the federal homestead exemption is capped at $15,000. But pursuant to 11 U.S.C. § 104, the amount is adjusted every three years to account for changes in the cost of living. Effective April 1, 2013, the cap is $22,975). Essential to the right to a homestead exemption is designation and occupancy of the property as a residence. Residence and domicile are not necessarily the same thing. Courts seem to be split as to whether a debtor may hold multiple "residences" at the same time. For example, the court in In re Lawrence, 469 B.R. 140 (Bankr. D. Mass. 2012) held: By choosing not to limit the residence qualified for exemption under § 522(d) to a principal or primary residence, Congress presumably intended to encompass a broader category than principal residences, namely any residence . . . . To sum up, on the date of their bankruptcy petition the [debtors] owned two residences, one in Massachusetts and one in Maine. They used them both. They were entitled to exempt either one, but only one, under § 522(d)(1). See also In re Demeter, 478 B.R. 281 (Bankr. E.D. Mich. 2012); In re Gandy, 327 B.R. 807 (Bankr. S.D.Tex. 2005). But the New Jersey Bankruptcy Court in In re Stoner, 487 B.R. 410 (Bankr. D.N.J. 2013) read the term "residence" in a manner "requiring some measure of permanence." I couldn't find any cases from New York discussing this issue, making it difficult to determine whether a New York bankruptcy court would allow the debtors to apply the federal homestead exemption to their Florida home. But given that the exemption is capped at only $22,975, it is unlikely to have a significant impact on the bankruptcy. New York Homestead Exemption The New York homestead exemption is more generous than the federal exemption. It provides exemptions capped between $75,000 to $150,000. However, it is limited to property located within New York and used as a primary residence. As such, the Florida property is not subject to the exemption. New York Civil Practice Law and Rules § 5206: Property of one of the following types, not exceeding one hundred fifty thousand dollars for the counties of Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and Putnam; one hundred twenty-five thousand dollars for the counties of Dutchess, Albany, Columbia, Orange, Saratoga and Ulster; and seventy-five thousand dollars for the remaining counties of the state in value above liens and encumbrances, owned and occupied as a principal residence, is exempt from application to the satisfaction of a money judgment, unless the judgment was recovered wholly for the purchase price thereof: a lot of land with a dwelling thereon, shares of stock in a cooperative apartment corporation, units of a condominium apartment, or a mobile home.