HELP!! What is a SECURITY INTEREST Credit Card ???

[Bit_Image]

Hi all,

I'm thinking of filling ch7 soon, and I was going through my credit cards and found that one of them, Wells Fargo says the following "SECURITY INTEREST, PLEDGE, ASSIGNMENT OF COLLATERAL". Does this mean that they will take my furnature if I stop making payments to them? I was under the impression that all credit card debit was dischargeable, or am I wrong here?

[SinkingFast]

Generally, store CC's for places like Sears, Best Buy, Circuit City, etc, have a collateral or security interest statement in their contracts. Things you purchase at their stores can be considered "secured".

As an example, you have a Sears MasterCard which you can use for purchases anywhere. You purchase things at Wal-Mart, the drug store, the gas station,......... Those purchases are not secured. You buy a washing machine and dryer at Sears on that card, and that purchase could be considered "secured".

[FilingOnMyOwn]

The debt IS dischargeable, however they may want to take their crap furniture back for whatever reason.

[HHM]

Ok, strictly speaking, what happens with secured debt in bK is this, (1) your personal obligation to pay the debt is discharged; however, (2) the property upon which the debt is secured is still liable for the debt (this is a technical splitting of hairs). So, if you file BK on a credit card charge that is secured by some item of property (i.e. furniture, big screen TV etc), the creditor has a legal right, despite your BK, to repossess that item of property that secures the debt.

In the real world, however, repossession of items of personal property (furniture, computers, electronics) rarely happens because there is no resale market for used items of that nature (unlike for cars and houses). Thus, the net effect in BK is that the debt is discharge and you keep the property.

[Bit_Image]

Thanks, you people are great!