What you don’t know can hurt you!
Published on April 1, 2014 by: Ian M. Falcone
A couple sits down in your office to discuss a potential
bankruptcy case. They have $40,000 in
credit card debt, own one car worth $4000 with no debt on it, another that is
leased, and a house that is under water.
Their combined income is $40,000.
They are current on the house and car payments. They can pay everything except the credit
card debts. They are being contacted by
debt collectors and have a lawsuit pending against them. They need help. You suggest a Chapter 7. Sounds like a simple case, right?
Most practitioners rely on their clients to provide the bulk
of the information needed to complete the voluminous bankruptcy paperwork. Credit reports help identify creditors. Websites such as Kelly Blue Book, NADA,
Zillow and local tax commissioner offices help establish values. But, is that enough?
In United States
Bank Nat’l Ass’n v. Gordon, 289 Ga. 12 (2011) the Trustee raised the bar.
In that case, the Trustee successfully argued that the security deed,
which failed to contain the signature of an official or unofficial witness, was
invalid. As a result, the bank’s lien
never attached to the real property and upon the debtor’s bankruptcy filing,
the Trustee effectively took the property free of that purported lien.
What lesson should the Debtor bar take away from this
situation? What you don’t know can
hurt you! Conducting an independent
analysis is good practice.
O.C.G.A. §44-14-33 states:
In order to admit a mortgage to record, it must be attested by
or acknowledged before an officer as prescribed for the attestation or
acknowledgment of deeds of
bargain and sale; and, in the case of real property, a mortgage must also be
attested or acknowledged by one additional witness. In the absence of fraud, if
a mortgage is duly filed, recorded, and indexed on the appropriate county land
records, such recordation shall be deemed constructive notice to subsequent
bona fide purchasers.
That means, a deed should contain:
1.
A notary signature and seal
2.
An unofficial witness signature
3.
A description of the property
A cursory examination of your client’s deed before
filing will save you a lot of headaches (including the possibility of a
malpractice claim) later. Deeds in
Georgia can be found at: https://www.gsccca.org.
