Announcement

Collapse

Forum Rules (Everyone Must Read!!!) (updated: 04/28/2015)

Welcome to the Bankruptcy Forum. Bankruptcy (BK) Forum is known as BKForum.com and will be referred to as BKF hereinafter. In order to ensure a long term success of our vibrant community, we have established certain rules and guidelines to which everyone must adhere to. Please take your time to carefully read our rules, before you start to participate in the community.

Things you agree to do:
BKFORUM.com (BKF) users agree to use the search function before starting a new thread. This prevents duplicate discussions and allows for better organized topics.

All BKF users agree to read the sticky posts which may be available at the top of a forum page. These Sticky posts often contain valuable information. They may also outline more rules and guidelines specific for that particular forum, stickies are put in place by that forums moderator(s) or admin(s).

Things you agree not to do:

All BKF users agree not to call people names or write a post simply to make a personal attack, or get a negative reaction; this behavior is not allowed on our forum. The use of derogatory language aimed at anyone will be severely dealt with. There is no need to agree with each other, or to even like each other. However, by signing onto BKForum.com you agree to treat each member and guest with the respect they deserve. No threats or personal attacks will be allowed.

All BKF users agree not to discuss, engage, or encourage any behavior or activity which violates the law. Discussion of drugs, violence, murder, theft, vandalism, fraud or any other issue which could be used to help individuals break the law is strictly forbidden.

All BKF users agree not to "bump" old threads, unless there is a specific benefit to the community by doing so. But in most cases, please don't post in very old threads, instead start new threads.

All BKF users agree not to attempt/use another members account. It is against BKF rules to use any account other than your own. Impersonating another member will result in an immediate ban. It is also against the rules to open more than one account in your own name without permission from a moderator or administrator. If you have been banned for any reason, it is against the rules to open another account. If you were banned temporarily and you are caught using another account you will be banned permanently. Choosing a moniker which is similar in either sound or spelling as a moderator or administrator is strictly forbidden.

All BKF users agree not to private message any moderator, admin, or other member with questions related to their personal circumstances (Questions about the forum or issues with the forum are ok). This forum only works when members share their experience and insights with everyone.

Things you agree not to post:
All BKF users agree not to post any derogatory/racist/or sexist remarks. This includes attachments, links and all information contained within posts, signatures, and avatars, failure to comply with this rule will result in a permanent ban.

All BKF users agree not to post any copyrighted or trademarked information without the express written permission of the owner(s) / proper citation of source.

All BKF users agree not to post any real names, addresses, telephone numbers, email addresses, social security numbers, or any other personal details (their own or other people's).

All BKF users agree not to post links, pictures, attachments, videos, or the like of pornographic content, objectionable material or extreme violence, whether cartoon or real.

All BKF users agree not to use BKF for advertising purposes without a written contract between yourself/company/agent and the administration of BKF. Blatant advertising will result in a ban.

All BKF users agree not to spam the forums. Spam includes but is not limited to posting erroneous, non-relevant-useless, off-topic, or meaningless posts. Spam may also include posts which contain no text, or large areas of blank space between lines. Simply posting emoticons without text is considered spam. BKF is the largest bankruptcy message board and all the content is intended to help other users. Please help us improve the quality of our forum by making sure that your posts are well-worded, spell checked, grammatically correct and syntaxed.

Regarding actions of moderators and administrators:

The forum is no place to air out your opinion or be judgmental of our staff and its capabilities.

All BKF users agree not to abuse or mistreat moderators or administrators. It is against BKF rules to post any information regarding bans or any other action taken by a member of the moderating or administrative team. If you wish to discuss bans or warnings please do so via PM. To place a complaint against a moderator, send a PM to a super moderator. All Moderators are equal, any decision made by a moderator must be adhered to. If a moderator tells you something you do not like, do not go to another moderator looking for a different answer. If you are caught doing this you will be banned. The moderators work as a team and respect the decisions made by their peers and will help enforce them unless an administrator tells them differently.
If you have an issue with how the forum is run, then notify one of our administrator and we will look into the situation. We have in the past and still do appreciate any input that you offer this forum. But critical input and/or judgmental postings towards the staff will result in you getting banned.


Should you find a thread offensive or out of line, then notify a Mod in a PM so they can evaluate the situation and do the action deemed necessary.

All moderators do have active "other" lives outside of the forum and help moderate this forum in their spare time throughout the days and weeks.

If you have a problem with a member or Mod follow the proper channels of reporting it.

BKF reserves the right to delete any posts which contain anti-BKF comments or discussion. Any bashing of moderators or administrators, or any of their discussion or actions will also be deleted, and the responsible posting party(s) will be banned. Any public anti-BKF advertising, communication, or posts on another forum will result in permanent bans as well.

All warnings and bans are decided by individual moderators and administrators. Warnings are preferable to bans however, for serious offenses and repeat abusers bans will go into effect. The length of the bans can vary from several hours to permanent.

All messages posted or sent including through PM are the property of BKforum.com.

All BKF users agree not to advertiser on the forum (Niether by posting, private messaging or using your signature). If you are a company/attorney/legal adviser wishing to advertise on the site or sell a product, you must contact the head administrator and inquire about our advertising packages.

All bankruptcy related opinions expressed on BKForum.com are those of their authors and not necessarily of BKF, its staff or representatives.

You agree not to copy any material/post/content from BKF without written permission from our head administrator .

By posting on this forum you agree to these terms and conditions, including any punishment deemed appropriate by moderators or administrators in the event of an offense.

Administrators/Moderators can change these rules at any time without prior notice.
See more
See less

Questions about the collateral (household goods) used for a personal loan

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Questions about the collateral (household goods) used for a personal loan

    Hello,

    I have some questions about the collateral that I had to use when I got two personal loans.

    The first is a personal loan I got nearly two years ago. They wanted household goods listed to "secure" the loan, so I put a television, computer, etc. Not long after, the television broke and would no longer turn on. I have another small personal loan that was secured by household items. I guess I will reaffirm both of these. On the first loan, I am about $500 behind. I went through a period of time in the past where I was unable to make any payments. I'm at least now making my monthly payment again, although they are mad because I'm unable to pay anything extra towards the past due balance. Right now, I owe about $1,000.

    I'm really confused about the following:

    1. Where do I list the television at on my bankruptcy paperwork (since I no longer have it)?
    2. How do I value it?
    3. For the other goods, like the computer, after two years I'm sure value has dropped. I don't know what amount they wrote down on their paperwork two years ago. I didn't know what value to place on it, so they pulled a number out of the air. Do I put that same value number they listed two years ago on the loan agreement on the bankruptcy paperwork?
    4. I really don't want to reaffirm with them, but I want to keep my computer. Is the reaffirmation agreement something they send me and I fill out and mail back to them? Do I file it to the court too, since I'm doing pro se?
    5. Can I reaffirm this since I'm behind?
    6. Can I keep making the $100 a month payment to them during the bankruptcy?

    From everything I read, I believe I will be a no asset case. Thanks for your help.

  • #2
    Well, if you have a non-PMSI loan and you pledged the items as collateral, then it is a "secure" loan. You would need to avoid the lien by using a formula (a well known formula) to determine if and by how much the lien impacts your bankruptcy exemptions.

    You can read more about non-PMSI (non-possessory purchase money security interest) loans here... http://www.bankruptcyinbrief.com/lien/
    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


    • #3
      Thanks for the information. If I reaffirm the debt, do I still need to strip a lien? Thanks.

      Comment


      • #4
        You do not need to reaffirm either of these loans, and if you've decided that bankruptcy is in your future, stop paying toward them now. That is just throwing money away. Do not worry about keeping your computer--your lender isn't going to want a used computer. If you look on Craigslist, you will see that even a high-end laptop which cost $500-$600 two years ago can be bought used for $150-160. A lender isn't going to spend the money to enforce its "lien", collect the used computer, refurbish it, and auction it off--which would cost way more than what it could sell for.

        Also, you mention a television which was disposed of. That is a risk the lender took by issuing loans secured by household furnishings. You are under no legal obligation to keep items around which no longer function, or are no longer wanted. Also, it is very common for people who are considering bankruptcy to sell household items--even electronics, appliances, or furniture--which are secured by a PMSI. Even in that case, the lender is simply out of luck.

        Comment


        • #5
          Originally posted by bankrupt3000 View Post
          Thanks for the information. If I reaffirm the debt, do I still need to strip a lien? Thanks.
          I would never ever reaffirm a loan funded by a lender-of-opportunity (predatory lender). That is exactly what they want you to do out of fear. I would heed both bcohen's and my practical advice. There is no mathematical formula that tells me that a loan of $4,000 on my $500 worth of furniture, is somehow better to reaffirm.

          In the end, I would hope that your judge would reject any reaffirmation that you would intend or plan to enter. It is simply not in your best interests especially for predatory lenders like AmOne, CitiFinancial and the like.
          Last edited by justbroke; 08-26-2017, 10:23 PM.
          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


          • #6
            I agree you should not reaffirm the loans. I would say that even if you weren't behind. But, being behind is even more reason to not reaffirm. In the extremely unlikely event that they would try to get a judgment allowing them to collect the collateral, reaffirming will not stop them if you don't bring all payments current.
            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
              Thanks for your advice. This is really all so scary, and I'm having problems finding information that just lays it all out for me. The what could happen and at what point during the bankruptcy process etc.

              Comment


              • #8
                If I surrender these two loans that are secured by household items, what can I expect at the creditors meeting if they show up?

                Comment


                • #9
                  Originally posted by bankrupt3000 View Post
                  Thanks for your advice. This is really all so scary, and I'm having problems finding information that just lays it all out for me. The what could happen and at what point during the bankruptcy process etc.
                  You will have some issues because some of it is question of law, some of it is caselaw, and some of it is general knowledge of the process. While this is what most people pay attorneys to worry about, some of us -- which includes myself -- proceed Pro Se. It's a lot to learn in what is usually a short period of time (a skill that can take attorneys years to develop).

                  Originally posted by bankrupt3000 View Post
                  If I surrender these two loans that are secured by household items, what can I expect at the creditors meeting if they show up?
                  Since you are Pro Se you absolutely need to read the article I posted above about consensual and non-consensual liens. You need to read about "impairment" of exemptions. You need to read about lien avoidance (not lien "stripping"). You need to learn motion practice in general (including the Federal Rules of Bankruptcy Procedure) and for your District. You will need to file a Motion to Avoid Lien (or use the captioning that your District requires). You need to complete any local forms required for lien avoidance (some have a specific form to attach or have "motion" templates to use). You will need to serve that Motion to Avoid properly. You may be able to use judicial or "negative" noticing (meaning if they don't respond you may not need a hearing). You may need to, after a negative noticing period elapsed, file a proposed order.

                  I would definitely file the Motion to Avoid Liens of XXXXXX because they are hardly ever contested (Nolo).


                  Nolo's Information on Avoidance of non-PMSI: http://www.nolo.com/legal-encycloped...ankruptcy.html

                  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


                  • #10
                    If I surrender the property, is there anything they can do to fight me surrendering? Also, how long would they have to come pick it up? I plan on moving once the bankruptcy is discharged. The manager of the local finance company is very, very aggressive. I'm about $700 behind. I have been making monthly payments again since the start of this year, but I'm not able to put anything towards the past due... and they just keep adding on every month. I also considered doing a redemption offer. I'm going to file next week, so I'm trying to get all my decisions made now.

                    Comment


                    • #11
                      Bankruptcy has protections that may annoy a creditor, but they can't harass you or even attempt to collect the old debt. That means that if you choose to surrender, they can't do anything but come and pickup the property (or what's left of it). In most cases, creditors know that bankruptcy's finality and penalties are nothing to sneeze about.

                      Aggressive is tamed with bankruptcy and this is precisely why we have the automatic stay and permanent discharge injunction.
                      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


                      • #12
                        STOP PISSING AWAY GOOD MONEY ON THESE BAD DEBTS! Once you have made the decision that bankruptcy is in your future, its is no longer necessary, or prudent, to keep paying toward debts which are going to be discharged. Of course, you must still pay your living expenses going forward (such as rent, utilities, insurance, etc.) and you must keep paying any secured debts for things which you plan to keep (car loan, mortgage).

                        You should stop paying toward these personal loans immediately, and really should have stopped long ago. Your creditors are not going to spend money to show up at your 341 meeting, nor are they going to want to collect your used household items.

                        Comment


                        • #13
                          Hi again,

                          After reviewing all my options and reading the Nolo book, I feel that redeeming the property would be the best option for me. I had some specific questions about this process that I can't seem to find the answers to online.

                          I also wanted to mention that I was reviewing my loan paperwork, and apparently there was some kind of insurance on there that I was paying for. If something broke (collateral), I was supposed to contact this insurance company to repair it. Clearly I didn't do that with the television. Could this cause a complication for me because I got rid of the television rather than getting it fixed through this insurance?

                          As for redemption:

                          My understanding that is if I redeem my property and they accept this redemption amount, I don't have to worry about avoiding a lien, etc. They will handle this.

                          For the television I no longer have, would I fill out a redemption agreement for this as well, just to include it in since it was listed as collateral on the paperwork? And would the value be zero since I don't have this anymore?

                          Should they refuse to allow me to redeem or want too much, can I change my intentions from redeeming to surrendering?

                          Do I need to contact them first to ask if they would allow me to redeem or should I just file the paperwork and wait for them to reach out to me?

                          I've thought about all of this and read your posts and I just really have no desire to try to reaffirm. I agree with what you are saying about it makes no sense to pay all that extra for property that is nowhere near (in value) what I owe. But I need the items I put up, and it would be easier for me (and more affordable) for me to simply redeem them, rather than trying to figure out how to avoid liens and paying for extra motions and the trying to rebuy these things.

                          Thanks for all of your help!

                          Comment


                          • #14
                            Originally posted by bankrupt3000 View Post
                            After reviewing all my options and reading the Nolo book, I feel that redeeming the property would be the best option for me. I had some specific questions about this process that I can't seem to find the answers to online.
                            You wouldn't redeem property which impair exemptions.

                            Originally posted by bankrupt3000 View Post
                            I also wanted to mention that I was reviewing my loan paperwork, and apparently there was some kind of insurance on there that I was paying for. If something broke (collateral), I was supposed to contact this insurance company to repair it. Clearly I didn't do that with the television. Could this cause a complication for me because I got rid of the television rather than getting it fixed through this insurance?
                            I would not worry about this.

                            Originally posted by bankrupt3000 View Post
                            My understanding that is if I redeem my property and they accept this redemption amount, I don't have to worry about avoiding a lien, etc. They will handle this.
                            They don't handle anything on a redemption. A redemption is done by motion under 11 USC 722. You would be the moving party and file a Motion to Redeem, You would attach evidence of value. This would go to a hearing where you would prove the value. I don't know why you would redeem when just about every State has exemptions for household goods (of which these are).

                            Originally posted by bankrupt3000 View Post
                            For the television I no longer have, would I fill out a redemption agreement for this as well, just to include it in since it was listed as collateral on the paperwork? And would the value be zero since I don't have this anymore?
                            You can't redeem something that doesn't exist.

                            Originally posted by bankrupt3000 View Post
                            Do I need to contact them first to ask if they would allow me to redeem or should I just file the paperwork and wait for them to reach out to me?
                            Do not contact them. They will strongarm you into redeeming something that should not be redeemed to start.

                            I really suggest that you seek some (free) consultations and determine the "best" path forward. You have $3,000 in available exemptions under 427.010 for clothing, jewelry, articles and furnishings under Kentucky law. You have an additional $1,000 of a wildcard for any property under 427.160.

                            I personally believe that you are not prepared to file on your own because you may not understand what lien avoidance was intended to do. Lien avoidance, for clothing, furniture and other household goods, was designed specifically so that a debtor wouldn't literally loose the shirt off their back when under bankruptcy protection. Please re-read http://www.thebankruptcysite.org/res...s-bankruptcy.h

                            Just for curiosity, how much was the original loan and how much is remaining on the principle?
                            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


                            • #15
                              As several posters have already alluded to, personal loan creditors only demand a "security interest" in your household items for the purpose of intimidating you into paying. They fully understand that the household items do not adequately secure the debt, and would cost way more to repossess and sell than they could ever sell for. This is very different from a loan taken out to buy new furniture, which might also claim a security interest in the items purchased.

                              You should simply file the appropriate motion to avoid the liens, and discharge the loans as an unsecured debt. It will not be contested, and the "security interest" will be eliminated. Believe me, a company in the business of making high-cost personal loans doesn't want your stuff--it wants to intimidate you into paying, which it has apparently succeeded in doing. You are way overthinking this.

                              Comment

                              Unconfigured Ad Widget

                              Collapse
                              Working...
                              X