Reaffirming lost collateral-

[ndbigler]

We have a wedding ring set for me and a band for my husband. I don't wear mine b/c I don't like it and also b/c it doesn't fit. Anyway, we were going to reaffirm that debt that we owe on the rings, but we lost a ring. One of three. I called my lawyer today and his secretary said that if we lost the collateral, there's no point in reaffirming and to just wait until the jewlery store wants money or their rings back. So, I'm supposed to wait until they make the first move. Does that sound right to anyone?

(We filed CH 7 on 5/31, had our 341 on 7/5, car repoed 8/5)

[spooby72]

I am in a similar situation....

We have a furniture account that we used to get a new bedroom set...we are filing chapter 7 and have been given advice to list in the bankruptcy that we will be surrendering the furniture and then wait for the company to contact us....most likely they will bluff and want the furniture and we can go from there. The used property to these stores aren't worth much to them so they really don't want it back....you at this point may have a good opportunity to negotiate with them to keep the jewelry but pay 50% less for it or so. You could also reaffirm it and pay what you owe but if you are trying to save as much money as possible...maybe waiting until you hear from them is a good idea. I highly doubt they would come pick up the rings....

Hope this helps a little....just my thoughts.

[ndbigler]

Thanks, it does. The rings total are valued at 3600.00. But that's obviously not the value anymore. We were going to reaffirm for 1000. But then, we found out the above. So, I guess we'll just wait and see what happens.

[spooby72]

Oh...I remember something else!

I believe I read that if you are contacted by the lender for the rings, you shouldn't tell them that you know longer have the collateral. I believe I read that they can automatically win a court decision based on the fact that they can not recover their damages.....you may want to check with someone more experienced but telling them you know longer have it may create a huge problem for you.....but check with someone more experienced on this one.

[ndbigler]

Thanks, I guess I'll contact my lawyer about that. IF they contact me, I mean, obviously they'd say either pay us 'X' amount of money, or give us the jewlery back, right? And so, since we lost part of the collateral, and you're advising us not to say anything, we'd have to go ahead and pay for it then, right? Do you think we could ask for a settlement then? Would that be appropriate? Or do they only do the offerings?

[HHM]

This situation is actually somewhat common, and the result depends on how aggressive the creditor is. Most are aggressive initially but don't end up filing any objections.

I have seen this with a debtor who gave an engagement ring and then the engagement was broken off, and he is stuck with bill. But most of the time, the creditors is aggressive at first, but they usually slink away without doing anything.

[ndbigler]

So HHM you're saying, that I COULD get away with not paying anything else to them, AND keep the rings?

[HHM]

So HHM you're saying, that I COULD get away with not paying anything else to them, AND keep the rings?

It's possible. I wouldn't "plan" on it, as it will depend on the creditor.

[ndbigler]

If the creditor wants the rings back, what should I say, as I've lost part of the collateral?

[HHM]

You tell them the truth.