Loan in a Chapter 13

[Mom2one]

We took out a loan to get our heater and airconditioner replaced in 2006. We will most likely be filing BK13 in September/October. We pay a certain amount every month for 10 years, just like a car loan. We have continued to pay on it as it is important as we paid for a 10 year warranty. I am wondering if this will be considered a unsecured loan? I am prepared to fight to pay it out of the 13. This is a company in the state of PA where we live that gives out loans for house stuff, heaters air conditioners roofs etc.

Any opinions?
Thanks
Christine

[breathe]

Give your attorney a list of all the debts that you are liable for - let the trustee sort out what will be paid and what will not be.

[lrprn]

First, find the original signed loan papers. Then take them to your lawyer. He/she can help you sort out whether the loan is secured or not.

[southernbelle]

The loan documents will help determine the status. I replaced my ac/heat in Oct 07, but the loan was cross collaterilazed by my 2nd mortgage which made it secured by the 2nd mortgage, but otherwise it would have been a general unsecured debt. The loan documents will tell you.

[Mom2one]

I am really hoping they find it to be secured. I am still paying on it, I had stopped (at the advice of the 1st attorney ) and we got a letter in the mail that if we default we will be sued for the full amount not yet paid. I am all caught up on payments now. I did not attach this loan to our house in anyway. I am willing to fight to pay it outside of the BK. I amthinking if I tell them it is attached (as in installed) and we may need to use that company again in 10 years or so when we need a roof! Just one more thing to worry about.

Thanks
Christine

[Mom2one]

I can't find my paperwork for the loan. Which sucks. But on the website it said that they are unsecured energy loans. I wonder if there is a way I can pay it outside of the BK since we are most likely filing a 13. I don't want to lose the warranty or be sued.

Christine

[AngelinaCat]

You really need to talk to your attorney about that. Our attorney--as incompetent as she was--stressed to us the importance of not trying to do anything outside of the BK. That was if a creditor should come offerring a deal of $.10 on the dollar, that sort of thing. But this could also be considered a 'ride-through' where I've read on other threads that people want to keep a car or house, but don't sign reaffirmation papers, and just keep making the payments as normal.

Could you get copies of the paperwork from the company from which you got the loan?

[Mom2one]

Hey Angelina Cat

I am hopingthey will let us pay it outside of the BK. The company did not make us any kind of offer as I was only 2 payments behind. I am now caught up. I am going to email them to see if they can send me the paperwork about my loan.

Christine

[jgarton244]

You cannot give a creditor preferential treatment while in BK 13, or it could be grounds for dismissal. Your attorney can maybe shed some light on whether your warranty would still be valid if your debt was discharged legally through bankruptcy, as by law, your debt would be considered legally completed. Paying additional funds towards a specific debt outside the plan would be considered preferential treatment. You must also list all of your sebt when filing, so it is not an option to leave this creditor out of your BK filing.

[Mom2one]

I would never hide this debt, or pay additional to it once we file BK. I am just hoping there is a way to do this . Maybe because it is installed and can't be removed?? I am afraid as we got a letter from the company when we were 2 months behind that we would be sued if we do not get caught up. I am wondering that since this loan is only for residents of PA and it is through the Dept of Treasury through the state of PA that maybe this would be considered different.

Christine

[safrina]

Ok, I submitted the final documentation yesterday and the finance company was quite unclear about how long it will take for them to find a lender and approve the loan. They have told me 'up to ten days' which sounds fairly long. Does anyone have previous experience with obtaining a personal loan and can shed some light on how long I can expect to wait. Thank you.

[MajorMike]

Its not different. You will list them as a creditor and they will get a percentage just like anyone else in your 13.