A debtor has a promissory note with a creditor to repay $25k. In compliance with the payment terms, the debtor sends the creditor valid monthly payments that the creditor either refused tender or failed to apply to the outstanding loan balance, but instead assessed and capitalized interest on the balance and amounts that the debtor attempted to pay. The debtor tendered a substantial payment to the creditor for half of the entire remaining balance owed on the loan, i.e., $12k; however, the creditor cashed the check but did not apply the payment against the loan balance. Instead, the creditor declared the debtor as delinquent and default when it knew the loan was neither delinquent nor in default, and has attempted to collect the entire loan balance from the debtor in an amount that it knows is not owed. Can a claim for conversion be made out of any of these facts since the creditor took the $12k payment and has kept it without applying it to the debtor's loan? What claims does these facts present?
Is this a bank or other commercial lender? If so, you can file a complaint with the agency that oversees the bank. If it is a private individual, you will need to file a Declaratory Judgment lawsuit in the Circuit Court of the County where you live, and get a Court order about how much you have paid and how much you owe. This is a matter best considered under the applicable State law. I would strongly suggest that you consult with a local attorney (perhaps selected from the AVVO website resources) with experience in this area of law, to offer a free initial consultation and perhaps assist with the process. Once you are comfortable with he or she, hire them to represent you. If this information was helpful to you, even if you do not like or agree with the advice, please let me know by clicking on the “Helpful” or “Best Answer” button. Or, if I really hit a home run, write a positive Review. That is the only payment we receive for these answers. Good luck!
This information is provided as general guidance only, not actual legal advice. I have not reviewed your paperwork, and unless this is a Maryland case, I am not licensed to practice law in your State. The fine points of your question are often found in the laws of your State. So, this response is not intended to be legal advice and you should not rely on this information to make decisions. I urge you instead to consult with a local attorney.
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