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When a loan is secured by real property, the current value of the property will be a determining factor in how the lender is treated in bankruptcy and will drive the lender’s bidding strategy in foreclosure. Valuing real property has never been an exact science. Volatility in the residential and commercial real estate markets over the last two years has made it even harder for lenders to rely with confidence on the appraisals they obtain to plan and predict how they will fare in bankruptcy or in foreclosure.

In difficult economic times, debtors’ attorneys closely review credit reports looking for potential legal claims against creditors. Long after a debtor has been discharged from bankruptcy, creditors can find themselves defending claims of improper credit reporting. A recent case from the Eastern District of North Carolina illustrates the trouble facing creditors who furnish incorrect reports of discharged debt. See In re Adams (Bankr. E.D.N.C. 2010).