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How long does the creditor have to pick up items from secured loan after discharge?

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  • How long does the creditor have to pick up items from secured loan after discharge?

    My Chapter 7 was filed July 28, 2017. The Meeting of Creditors was held Sept. 1 and the discharge was on November 1st. I had given my attorney all documents pertaining to any outstanding contracts so that they would know how to classify the debt. I had two loans to a finance company for furniture. It's been my understanding that these loans were secured, however, it appears after reviewing my bankruptcy documents, that my attorney listed them under unsecured debts.
    I spoke with the finance company back in September regarding wanting a copy of a receipt for payment that was made towards one of the two accounts. The regional manager started demanding payment for the other account and belittling me for not being able to make such a small payment. At the time I did not realize that he was in breach of the automatic stay, but I did let the company know that I would not be making any payments going forward towards either account and the items were theirs to pick up.
    On November 9th I received a call from the finance company at my place of employment. The local store manager was wanting me to come in and start making payments towards the accounts. I told him that I would not be doing any such thing and that I needed to go because I was at work. Leaving work, I noticed I had 2 voicemail from the finance company and then the manager called me again later that night again requesting that I come in and either get caught up on the accounts or work out an agreement to get current and start making regular monthly payments again. I had to tell him several times that I would not do this and he then asked what a good time to come pick the items up would be and we agreed on Today at 4. It is now 8:30 and no one has showed to pick up the items.
    I know that they are in violation of the bankruptcy laws as they were not allowed during the automatic stay to demand payment nor are they allowed to call after the discharge wanting payment, but I'm curious as to how long I have to worry about them hounding me for either payment or to pick up the items since they've already broken our agreement as to a date and time to pick them up. I don't want this looming over my head forever or worrying about the next time they're going to call and embarrass me at work wanting money they know they cannot collect.
    Should I be proactive and send them a letter telling them all further communications should be in writing only and that they are not to contact me by phone again or just wait and see if it continues. Should I also be as bold as to tell them they have abandoned their property by breaking our original agreement or do they have the right to make me available at their whim to set up dates and times to retrieve the items and then not do it?
    I have contacted my attorney, who's been no help throughout the entire process other than to take my money and file the paperwork, but not give advice or answer questions, and left them a message as to what was going on both last Thursday and today, but they've never even bothered to return my call.
    Thank you for your help with this as I'm not sure what to do or what I can do at this point to be done with this creditor.

  • #2
    As you have just found out, the finance company DOES NOT WANT your used furniture. It would cost them MUCH, MUCH more to collect it, clean it, and auction it off than they could possibly get for it. The so-called "security interest" really only exists to scare borrowers into paying. Even outside of bankruptcy, creditors are HIGHLY unlikely to follow through with repossessing used furniture or other household items.

    Since you have discharged the debt in bankruptcy, these attempts to collect money are a violation of the discharge injunction, but you already know that. My advice is to send the company a photocopy of the discharge order, and a letter telling them that you know your rights and for them to never contact you again.

    Something like this:

    "RE: Account numbers 0000000, 0000000

    Please be advised that on July 28, 2017 I have filed for Chapter 7 bankruptcy protection, and on November 1, the discharge was entered. As a result, any alleged debts, including your furniture loans should be deemed closed and uncollectible. As you are aware, contacting me by telephone in order to request monthly payments or settlement of these alleged debts is a clear-cut violation of the discharge injunction. Please cease and desist from any further contact regarding these alleged debts. If these illegal collection attempts continue, I will be forced to proceed with appropriate legal action.

    Sincerely,

    Me"

    Send this Certified Mail, Return Receipt Requested, and keep a copy for your records. If the creditor fails to abide by the discharge order, you can reopen your case and have them sanctioned.

    Comment


    • #3
      Also, you should be aware that even assuming a valid and enforceable "security interest" such as one would have with a car loan, you are not legally required to bring the creditor's collateral to their place of business, nor are you even obligated to set up a time for them to come pick it up. All you are required to do is to not make any attempt to hide or dispose of the collateral, and to cooperate with the court/sheriff, should they file for replevin/ judicial repossession. That being said, I highly doubt these people are going to come collect used furniture.

      Comment


      • #4
        They are wrong for hounding you for payments. What did you put on your Statement of Intentions? To tell you the truth, these loan sharks -- as I call them -- do not want the property; they want money.

        I would definitely write a formal letter to them and the top should be captioned "VIOLATION OF THE PERMANENT DISCHARGE INJUNCTION 11 USC 524" and start of with "As you are aware, Samel3671 is under protection from the U.S. Bankruptcy Court and the provisions under the permanent discharge injunction imposed by 11 USC 524 against collections. You are in violation of this stay by demanding payment. Any single further attempt to contact by mail, phone, or carrier pigeon regarding payment will result in your company being brought against your company seeking monetary sanctions and punitive damages. I suggest immediately seek the consultation of a lawyer. The bankruptcy court takes this this seriously and you will have no other warning."

        How long will it last? As long as you permit it to take place and especially if you keep "talking" to them and making arrangements to meet with them. I would call my attorney and make an appointment and see if they want to take a "stay" violation on contingency. It's usually "easy" money for them. Your attorney has no further obligation to you after the 341 Meeting and the fee agreement should have made that clear. If you want the attorney to take this on contingency then you'll likely need to make an appointment.

        I loathe this type of creditor and especially where they skirt the injunction. They should never demand payment or even "hound" you in any way. That can easily been seen as a discharge violation especially calling your job several times in a day.

        Adding that what bcohen wrote is essentially the same as mine.
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog


        I am not an attorney. Any advice provided is not legal advice.

        Comment


        • #5
          Thank you both so very much for your response and the sample letters. I will do that tomorrow and truly appreciate the help with this.
          The Statement of Intentions only addressed my car that I did not reaffirm on because I am the co borrower and all of my payments are current with no intentions of ever defaulting anyway (also, the other party was aware of my bankruptcy and was okay with me not reaffirming on it) and my house, which I did reaffirm on.
          I honestly couldn't imagine them wanting the items back as one is a mattress and the other is a recliner. Perhaps he thought after setting up the arrangements over the phone to have the items picked up that I'd miraculously have a change of heart over the next 4 days and pay on them, I'm not sure. I guess he thought I was bluffing and I wound up seeing his instead. I've had several loans with this company over the last 5 years with no issues. On the personal loans they've made tons off of me in the past, but the furniture items I always did with the promotions of no interest if paid in 1-2 years and always paid them off within that timeframe so that they got nothing off of those items. I agree though that overall, they are like loan sharks with their interest rates.
          Again, I will make sure to get this in the mail ASAP to prevent any further calls and thank you.
          Last edited by Salem3671; 11-13-2017, 10:27 PM.

          Comment


          • #6
            The debt is not on the statement of intentions because it was scheduled as unsecured debt. If they didn't object to that classification, I am not sure they even have a claim to the collateral [ETA: desprifreya, a BK attorney, says below that the creditor's failure to object to the listing of the debt as unsecured does not effect their right to the collateral]. But, I agree that they don't want it anyway.
            Last edited by LadyInTheRed; 11-14-2017, 04:06 PM.
            LadyInTheRed is in the black!
            Filed Chap 13 April 2010. Discharged May 2015.
            $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

            Comment


            • #7
              LadyInTheRed

              OP and I have discussed this matter on another forum. If the lender has a PMSI, which in this case it does, it is secured regardless of how it is listed on the schedules. No secured lender has to object to being placed on Schedule F when it should have been on D. Regardless, OP is aware that the lender has a right to take back its property but is unlikely to do so. In fact, I believe OP set a time for pick up but the lender never showed.

              OP, send the certified letter I mentioned. Give a date certain for pick up. Tell lender if it again fails to show up the item will be disposed of.

              Des.

              Comment


              • #8
                Thank you despritfreya. I did learn a lot on the other board with regard the actual security interest portion of it and I do have the letter typed up and ready to go out today, so hopefully I will be done with this company all together.
                I do have one last question though. Should it go to the company's corporate address or the local branch that had been making the calls?

                Comment


                • #9
                  Originally posted by Salem3671 View Post
                  I do have one last question though. Should it go to the company's corporate address or the local branch that had been making the calls?
                  Personally, although a pain, send letters to both and any other address you can think of.

                  Des.

                  Comment


                  • #10
                    Originally posted by despritfreya View Post
                    LadyInTheRed

                    OP and I have discussed this matter on another forum. If the lender has a PMSI, which in this case it does, it is secured regardless of how it is listed on the schedules. No secured lender has to object to being placed on Schedule F when it should have been on D. Regardless, OP is aware that the lender has a right to take back its property but is unlikely to do so. In fact, I believe OP set a time for pick up but the lender never showed.

                    OP, send the certified letter I mentioned. Give a date certain for pick up. Tell lender if it again fails to show up the item will be disposed of.

                    Des.
                    Thank you, Des!
                    LadyInTheRed is in the black!
                    Filed Chap 13 April 2010. Discharged May 2015.
                    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                    Comment

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