Is a Best Buy Credit account Secured?

[optimistic1]

I had a attorney claim that the Best Buy Account, through HSBC, is a secured account. He went into some legal mumbo about how it really is secured.

Also, the balance is only $1500, and I bought a TV two years ago with it, and a laptop over a year ago.

So what would they get if anything?

The crammed down value of the items, or all of it, if in fact it is secured?

[ansky0007]

Any of these stores... Best Buy, Dell, Etc. are all secured cards. They have the right to the merchandise and they can come after it if they feel there is enough value. Most will take a settlement for lower amount if you are concerned about giving something up.

[HHM]

Yes, Best Buy is secured...do you need to worry about it, Absolutely not.

For all intents and purposes, these types of store cards are "treated" as unsecured.

Just ingore them, they will go away. Do a forum search for Best Buy, you will see all kinds of experience with them. You don't need to do anything.

[optimistic1]

How will my Ch. 13 attorney treat this debt? And would Bass & Associates somehow put this on my credit three to five years from now when I plan on having a Ch.13 discharge?

Also, If I did not choose to simply ignore it, what If I simply include them into the 13, the TV was bought 2.5 years ago and needs to be serviced, I bought it for $700, its maybe worth $350 and the laptop is now worth about $200, I dont mind adding them into the plan for a whopping $550.

[lrprn]

How will my Ch. 13 attorney treat this debt?

Because it's a secured debt, he will add it as a secured debt on your forms when you file. DO NOT reaffirm this debt!!

The reason HHM said not to worry about this is that Best Buy does not want your old stuff back. They want you to pay them and may threaten they will repossess your items if you don't fork over what you owe. Tell them go ahead - come on over.

I'm 99.9999% sure (I never say never ) that you won't hear from them again and also you'll get to keep your stuff. That's what has happened with every member here that's faced your exact same situation with Best Buy and other "secured" lenders like Dell and Home Depot.

And would Bass & Associates somehow put this on my credit three to five years from now when I plan on having a Ch.13 discharge?

Why would they do that? It's a debt that's been included in bk. They can only make the designation IIB and show a balance owed. That's it. And two years after your five-year Ch 13 is over, it all drops off anyway. This is the least of your worries right now.

[Flamingo]

To understand about a "secured" account, everyone should educate themselves before applying for credit and read the information that is provided along with the credit application. Some of the stuff can give you the willies if you take the time to read it. You probably signed all that paperwork and had no idea they would have a secured interest in an item you purchased. Most people never read the fine print/terms and wonder why when they also miss a payment the interest skyrockets. It's all right there in the terms agreed upon at signing.

[optimistic1]

When we treat it as a secured debt, what will be the amount we are paying them back for the items?

The market value? Or the full balance on the credit statement?

[optimistic1]

Because it's a secured debt, he will add it as a secured debt on your forms when you file. DO NOT reaffirm this debt!!

But how much of the amount owed will I be paying back, the freakin TV is 3 years old, and the only other items I got from them was a 1 year old laptop and a dvd recorder, the rest was a bunch of small items that I dont even own anymore!

I owe them $1500, is this full amount included, or is it a lesser amount?

[AngelinaCatHub]

All of your secured debt will be paid first and expenses. Don't worry about 1500 as that is little in this day. As the others stated, Best is treated like as, they are unsecured. 'Hub

With permission from your lawyer, you could make them an offer if you are bothered. 400 and zero the debt. Beware, do not do a preferential payment.

[optimistic1]

Could you define what a preferential payment is?

Why cant my lawyer just add it in as a secured debt, but at market value of $400 and be done with it, I dont mind.

[Michmom321]

We have a computer from them that we wanted to keep. I planned to pay it outside of the plan, but they filed a claim and are on as secured. This is fine with me, it is only around 1500 so in the grand scheme it is not enough to worry about.

[lrprn]

But how much of the amount owed will I be paying back, the freakin TV is 3 years old, and the only other items I got from them was a 1 year old laptop and a dvd recorder, the rest was a bunch of small items that I dont even own anymore!

I owe them $1500, is this full amount included, or is it a lesser amount?

Optim, please talk to your lawyer about this. He/she will help you understand how this is going to work in your specific case.

In most states when you file Ch 13 with a "secured" debt like this one that can't be covered by exemptions, you indicate that you do not intend to reaffirm the debt. The lender (in your case, Best Buy) decides to either file a claim or not, move it to a company that will collect the creditor's % of your payment from the trustee once payments start going out to the secured claimants monthly for them, or immediately sells your debt to a collector who may or may not file a claim to be paid if the original lender does tell them you filed Ch 13.

No matter what happens, the bottom line is that when your Ch 13 is over, you will own the items and owe nothing.

[optimistic1]

We have a computer from them that we wanted to keep. I planned to pay it outside of the plan, but they filed a claim and are on as secured. This is fine with me, it is only around 1500 so in the grand scheme it is not enough to worry about.

Thats ridiculous, they cant put a secured claim for the full balance of what is owed, the tv i bought is three years old, and the computer is over a year old, the rest of the stuff purchased I dont even own anymore, so what is it secured by, nothing.

I will ask my attorney about this topic next week and see what they say.

[justbroke]

Thats ridiculous, they cant put a secured claim for the full balance of what is owed, the tv i bought is three years old, and the computer is over a year old, the rest of the stuff purchased I dont even own anymore, so what is it secured by, nothing.

Actually, they can and they do.

So, what HHM and Flamingo and others have written is absolutely true. While the debt is in fact secured, the creditors usually file as unsecured. In fact, I have Lowe's, Home Depot, and other store credit cards (electronics) which are secured. However, the creditors all filed unsecured claims. Perfect.

If a creditor did file as secured, you can value their claim! For example, optimistic, if they filed for the full value, you and your lawyer would file a motion to value. This would split the claim into a secured and unsecured claim. It basically sets the price of the secured portion of the claim to what the current value of the item is. The rest of it would be treated as unsecured and paid at whatever percentage your plan pays.

Don't be confused about this. Secured claims in a Chapter 13 are treated different than in a Chapter 7. Most secured claims in a Chapter 13 have to be paid at 100% over the plan's duration. You want to minimize secured claims a much as possible in a Chapter 13.

[optimistic1]

Ok, then, either way if the file as unsecured they wont get anything, my plan is 0$ to unsecured, but Im not gonna tell them that. If they do file as secured, we will file motion to value as you stated. I will gladly pay them what the tv and laptop is worth, but i am not paying them the full balance. Thanks justbroke.