Tidrick v. General Bank (In Re Tidrick)

MEMORANDUM OF DECISION

JAMES N. BARR, Bankruptcy Judge.

STATEMENT OF FACTS

The parties have stipulated to the following facts:

The Debtors, Lee and Theresa Tidriek, were limited partners in a business venture known as Alba Cross, Ltd. In December, 1980, Alba Cross borrowed $150,000 from General Bank (“Defendant” or “Bank”). The Debtors personally guaranteed the loan to the extent of $80,000, and the guarantee was secured by a deed of trust on the Debtors’ residence. The deed of trust was recorded shortly thereafter.

In 1982, during a period when Alba Cross was unable to make payments on the loan,…