A March 2014 ruling by the Appellate Court of Illinois, First Judicial District, has reversed the prior decision of the Circuit Court of Cook County and subsequently the forbearance/credit agreement between mortgagee BMO Harris Bank, N.A. (Harris) and mortgagor BWA, Inc. (BWA).

After the Appellate Court reviewed extensive evidentiary email communication between the two parties and all involved individuals, it found that the forbearance/credit agreement previously upheld by the Circuit Court of Cook County was not in compliance with the Credit Act, and therefore unenforceable.

This ruling allows Harris to now pursue judgment in court against the constituents of BWA and negates the prior forbearance terms that included a monetary settlement of $350,000 and deed in lieu of foreclosure. This ruling places BWA in a precarious financial situation, as the original judgment requested by Harris totals $1,880,939.61.

What does this ruling mean?

The main takeaway from this case is that email and verbal communication between legal representation and involved parties is not upheld in court without proper documentation that satisfies the stipulations set forth by the Credit Act.

Ensure that you enlist the help of an attorney to provide you with guidance in securing a compliant, enforceable agreement.

If you find yourself negotiating credit agreement or forbearance terms with a creditor, it is essential that you know the following three things:

• Email correspondence and verbal exchanges do not necessarily hold up as evidentiary support in court. While the Circuit Court did validate the terms of BWA’s agreement with Harris based on documented email communications presented as evidence, the Appellate Court reversed that decision, stating that the information included in the various emails “does not evince the relevant terms of that agreement.”

Therefore, it is important to understand that formal documentation listing the specific points of any credit or forbearance agreement must be put in writing outside of informal email communications to be considered supporting documentation.

• All relevant terms and involved parties must be listed on your documentation. If the documentation for your agreement with a creditor does not fully list the relevant terms of the forbearance or credit agreement along with a full disclosure of the names of all involved parties, it is not in compliance with the Credit Act, and could be ruled out as supporting evidence.

The Appellate Court ruled out BWA’s evidence because the relevant terms and parties involved were not listed in the email correspondence they presented as evidence.

• Without signatures, your documentation is not enforceable. Section 2 of the Credit Act requires that signatures be present for all parties involved in the credit or forbearance agreement.

Even if your email correspondence or other documentation properly lists all relevant terms of the agreement, it is useless without all signatures. Because the documentation presented by BWA did not include signatures, it was not accepted as supporting evidence by the court.

What if I need help?

If you are unsure about your rights under the Credit Act and are facing foreclosure or other legal sanctions, contact an attorney. EV Has Law helps Chicago property owners navigate this complex process. Call us today at (312) 775-0980 to set up a consultation to discuss your case with an attorney.