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

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  • #16
    The original loan was about 2000. The pay off now is around $1000 and growing with late fees. The collateral of the items I still have left (a laptop, desktop, charcoal grill, etc) is probably less than $300. I'm just really not interested in surrendering, as I'd have to do the lien avoidance ( I might not be calling this the right thing) and all that. Plus, I really want to keep my computers and grill etc. I would rather just redeem the collateral on the loan and be done with it. I'll be a no asset case.

    In addition, I noticed on the collateral list, they also listed my 19 inch television but beside it they put N/A. They didn't list a value on the sheet for this particular television but if it's not included as collateral why didn't they just remove it off the sheet? So I'm not sure if this is an item that would need to be redeemed too.

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    • #17
      Originally posted by bankrupt3000 View Post
      The original loan was about 2000. The pay off now is around $1000 and growing with late fees. The collateral of the items I still have left (a laptop, desktop, charcoal grill, etc) is probably less than $300. I'm just really not interested in surrendering, as I'd have to do the lien avoidance ( I might not be calling this the right thing) and all that. Plus, I really want to keep my computers and grill etc. I would rather just redeem the collateral on the loan and be done with it. I'll be a no asset case.
      I too am concerned that you don't know the differences between lien avoidance, surrender and redemption. Lien avoidance removes their "grip" on your personal items. A Motion to Avoid NON-PMSI Lien is that gold standard in your case.

      Originally posted by bankrupt3000 View Post
      In addition, I noticed on the collateral list, they also listed my 19 inch television but beside it they put N/A. They didn't list a value on the sheet for this particular television but if it's not included as collateral why didn't they just remove it off the sheet? So I'm not sure if this is an item that would need to be redeemed too.
      I would be very cautious of the wording in those types of agreements. They sometimes attempt to attach "all" property but using that term usually renders the security of the loan indefensible.


      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


      • #18
        I simply wouldn't have the intelligence to do the Motion to Avoid Non-PMSI and everything it entails. I understand that when you surrender your collateral that most often they won't take it and you will need to file that motion and do all the steps, but for someone like me that would just be too difficult.

        So by filling out the form to redeem:
        I do a separate one for everything listed as collateral, except for the items that I no longer have. (By the way what happens to the liens or security interests on the items I no longer have? I know in my state they file paperwork with the state on items that are used as collateral and when the loan is paid in full these are released and a copy is mailed to you.)
        I guess I don't fill out a form for the one that they put N/A as the value? Best I can remember, I think they said they couldn't use two televisions to secure the loan.
        By the time the Meeting of Creditors happens, I should know if they are open to redeeming or not?
        If they want too much, I guess I will have to figure out how to change to surrendering the property. If they don't pick it up, I'll have to file the Motion to Avoid Non-PMSI before the bankruptcy is discharged, from my understanding. Or after changing to surrendering, would I go ahead and file this motion regardless? But this option is really something I want to avoid as I'm serious.... it's way too complicated for me.

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        • #19
          Oh ugh. I just found out that apparently I would have to pay to file motions for the three debts I planned on doing something with (reaffirming, redeeming, etc). From my understanding, each motion would be $350 each, so this changes everything.

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          • #20
            A redemption is the same "technical" process as the Motion to Avoid Lien. They are both done by motion (Motion to Redeem) and follow the process for contested matters. They both get served on the parties. They'll both require a hearing. The Motion to Avoid Lien does not require as much evidence of value as a Motion to Redeem although you could technically end up with arguments as to value.

            I would not worry too much about valuation because this creditor is not going to object or even show at any hearing because they'd spend $1,000s trying to get $100s and still lose.

            I don't understand how you have surmised that one method is more complex than the other. I think you have the complexity reversed. In a redemption the creditor will "know" they are getting something and will fight for higher value. In a lien avoidance, their burden would be to prove the stuff is worth more than your exemption (as much as $4,000).

            A debtor is not required to pay any fees to file motions or even start an Adversary Proceeding in an open case. In fact, the fee you listed, $360, is not for a contested matter filed by motion; that fee is for an adversary proceeding. Neither of the motions requires a formal complaint (adversary proceeding).

            In fact, for a motion to avoid lien, you would use the "standard form" for Kentucky... http://www.kywb.uscourts.gov/fpweb/p...i_fillable.pdf which is for the Western but could be modified for Eastern by just changing the captioning. A sample "proposed" order is also included as your District may require you to submit a proposed order "after" you have been granted any motion.

            In the end, motion practice is the same whether it's a Motion to Redeem or a Motion to Avoid Lien. A Motion to Redeem doesn't make the adversary any more "nice" because you're going to give them money. A Motion to Redeem makes them more adversarial in that the more they can drive up the prices, the more you'll have to give.

            Last edited by justbroke; 09-03-2017, 08:48 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


            • #21
              JB you have mad skills I simply don't have! Thanks for clearing all this stuff up for me.

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              • #22
                Hi again,

                I spoke with the creditor today and they are not agreeing to redeem the property. I was told my options are to either reaffirm or surrender and they said if I surrender I will have to bring the property to them.

                I'm past the 341 meeting. Is it too late to modify my intentions to surrendering the property on the bankruptcy paperwork?

                Also, if I surrender, that's pretty much the end of it, right? Any liens will be released, they will have the property. Will I need to worry about the items I no longer have, like the television that broke a long time ago? Or will a lien remain on that forever? If so, does that lien affect me at all?

                Thanks for all of your help. I'm trying to get all of this wrapped up.

                Comment


                • #23
                  In addition to the post above, I'm a little confused about whether this needs to be included in my property surrendered. They listed a second tv above the one I no longer have. It says TV (exempt), not eligible for credit property, and secured value is N/A. However, when I called them, the way they were acting this one needs to be surrendered as well. Has anyone heard of anything like this?

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                  • #24
                    Sorry for the three posts. I did a UCC filing search, and I'm not finding myself on there for this, so it looks like they didn't do one of these filings. Does this mean there is not a lien on the household goods/items?
                    I'm going to surrender the items I have, which is all of them but a television. When I told them today I don't have the tv in my possession anymore (it broke and was disposed of), they acted like this was a really big deal. There is a ton of information online about avoiding liens, surrendering, etc, but I can't find one thing: If I no longer have an item but surrender everything else, will a lien follow me around for the rest of my life for the one item I wasn't able to surrender? I couldn't find anything on Google as to whether I would need to file a motion avoid a lien on an item that I no longer have, but I wasn't able to find anything that addresses whether I would have to worry about a lien following me around the rest of my life. I guess I'm just worried about future issues if they try to collect on it five years down the road. For example: surrender or we want the value of it in cash.
                    And now I'm not even sure there is a lien on it since I couldn't find myself by doing the UCC filing search. Would this mean there is not a lien? If not, what does this mean for me?
                    Thanks for all your input everyone. All of this has been really hard.

                    Comment


                    • #25
                      Redemption doesn't require the creditor to agree. Redemption required a court to approve the redemption for a certain value. The argument is usually over what is the fair market value (as of the hearing date). The only problem debtors usually have with redemption, is finding redemption funding. I would have not got into a discussion with the creditor about the law itself. I would have filed a motion to redeem and not talked to the creditor until they objected to the redemption "value" and then, and only then, negotiate on the value.

                      I'm confused, now, about what you're trying to do. Are you redeeming of avoiding a 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


                      • #26
                        I'm just going to surrender the household goods and take a receipt with me to be signed. I have all of them but a television that broke and was disposed of way back. None of these are high value items, and they wouldn't be worth fighting over if the creditor disputes the value (which I highly suspect they would after talking to them yesterday). After reading about the replevin and all that stuff, I'm just confused or concerned about what will happen in regards to the missing tv in the future, as I can't surrender something I no longer have. They put a very high value on it for a television that was only an old box tv... not a flat screen or newer television. I believe that by surrendering everything else, I no longer have to worry about a lien etc, but what about the missing item? Apparently there was not a UCC filing for these items as I searched the database so I don't believe the lien was perfected. I don't know if this makes a difference.

                        Also, I'm a little confused about the second television I mentioned above and how they listed it as collateral. Does that need to be returned as well? Thanks so much for your input.
                        Last edited by bankrupt3000; 11-10-2017, 02:08 PM.

                        Comment


                        • #27
                          Originally posted by bankrupt3000 View Post
                          I'm just going to surrender the household goods and take a receipt with me to be signed.
                          Why in the world would you do that? They are not even entitled to them because the lien impacts an exemption.

                          Originally posted by bankrupt3000 View Post
                          Also, I'm a little confused about the second television I mentioned above and how they listed it as collateral. Does that need to be returned as well? Thanks so much for your input.
                          These loan sharks are notorious for listing things that don't exist. I still don't understand about surrendering anything and I'll have to leave it at that.

                          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


                          • #28
                            Stop worrying about the TV you don't have. The debt will be discharged. You have no TV to give them. The lien on the TV is worthless. They cannot demand cash from you because your personal obligation for the debt will be discharged. If they do try to pursue you for anything other than return of the property, they will be in violation of the automatic stay before discharge and the permanent injunction against collection after discharge.

                            Stop talking to the creditor! As previously pointed out, they want to scare you. Don't let them. If they want your old stuff, let them come and get it. You do not have to deliver it to them. If you want to keep them from having any right to take the property and you exempted the property, file a motion to avoid lien using the forms that justbroke linked to. If you did not exempt the property, but have exemptions available to cover its value, you probably need to file an amended Schedule C before filing your motion to void lien. Keep in mind that the current value of the property is not determined by what is stated in the loan agreement.


                            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!

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                            • #29
                              Thank you everyone for your kindness and patience with me while explaining this in layman terms!

                              Comment

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