Do I have to pay????

[xworried]

my husband and I filed chpater 7 back in Agust. Our lawyer listed besides our mortgage, Sears and Zales accounts as secured accounts (stove and dimond ring) and added that we would reafirm the debts. We had our 341 meeting in Sep. and our discharge date is 12/5 . The trustee didn't mention anything about reafirming. We are still receiving bills from both this creditors and the balances inclued all the late charges and finance charges which are making the balances out of control. Do I have to reafirm? and do I have to pay all the finance charges?

[StaciMM]

You don't have to reaffirm-you could choose to give the items back, or offer to redeem them (before discharge) at fair market value. How long have you had the items?

Unfortunately, you do not get to keep them without paying them. The BK wil discharge your obligation to pay but it does not take away the creditor's security interest.

[xworried]

Thanks for the answer, I have one more question how do I redeem them?

[xworried]

oh, I had the items for about a year now.

[Teri]

I would just wait and see if they even want them. Have they contacted you to return them? If not, just play the wait and see game. I was under the impression the at creditors didn't send bills between filing and discharge.

[xworried]

That's what I thought too, is it maybe because we listed them as secured accoutns that they have the right to keep sending bills?

[StaciMM]

They don't have the right to bill you during the automatic stay, even though they're secured. IRS & student loans can't even bill you right now, and those debts don't get discharged.

To redeem, you offer the creditor 'fair market value' for the items, and pay it in a lump sum. To get an idea of fair market value, look thru your local 'for sale' ads and see if anyone is selling something similar. Teri is right though-that when they update your accounts to show 'BK' they may not bother w/ more than a half hearted attempt to get you to pay. For them to repossess the items, they would be procedural requirements involved & that would cost them money. Most of the time, used items aren't worth much.

[LostinMi]

Secured or unsecured creditors are prohibited from billing during the automatic stay. I am not sure about accuring interest/late fees during this period though.

I would just wait and see if they contact you about collecting the items. I am in the same boat with a Dell computer. I don't plan to pay for it, as it is not worth what is owed on it. If they want to come get it, they can..... but my lawyer said she has never seen that actually happen because it is not financially in their best interest to do so. I would guess the same true about your year-old washer, but the diamond ring may be a different story!
Good luck!!

[StressedNTX]

XWorried or anyone else who have had secured debt included in bankruptcy such as Sears or Zales. After your discharge, did they ask for the sutff back?

[JimH]

Do not reaffirm on these unless you only have a couple payments left on an item. Offer them a low number or if they don't like it,they can come get them. They'll take the money. It's too expensive to repo items.

[Kam]

I would inform the creditors (Sears especially!) that they are violating the bankruptcy stay by continuing to send you invoices. They can be spanked by the trustee for violating this stay and you could receive monies for their violation. Regarding interest/penalties during the bk: yes, they can charge late fees, etc.. I know for a mortgage/car payment, if you intend to keep, you need to stay current on the payments during BK so the creditor does not file for a lift of stay motion. I would presume that this applies to other secured debt, or is that viewed as preferential payments?