Case Summary:
The U.S. Department of Agriculture sought stay relief to set off a debt the IRS owed to the Chapter 7 debtor for a tax refund against a debt the Debtor owed it on a home loan guaranty. Debtor argued that setoff should not be allowed because the USDA did not hold an enforceable claim against her. Debtor claimed that Chase Home Finance LLC waived any deficiency on the mortgage in a foreclosure proceeding in state court. Debtor also argued that because she was misled by the waiver of deficiency, she did not contest the entry of judgment, the sale process, the price obtained at the sale, or the costs assessed. The Court held that the claim was enforceable because it was based on an indemnity contract signed by the Debtor, and not on subrogation. The Court also found that the language in the complaint was not misleading on its face, and Debtor failed to demonstrate that unsophisticated consumers found the challenged statements to be misleading or deceptive.

Statute/Rule References:
11 U.S.C. § 553 -- Setoff
15 U.S.C. § 1692(e)

Key Terms:
Home Loan Guaranty
Setoff