Filing Chapter 7 and John Deere

[Chowder]

This is about as good as the advice saying the guy that he sold it to has the problem.

LOL!!
You can't see the purchaser might have the larger problem here?
He stands to loose the money and the mower!

His only recourse is to sue the seller, with a good possibility of having his judgment included in the sellers BK!!

To the OP.
Here's a thread with the same circumstances. The Attorney listed the assets as secured to be surrendered despite them having been sold.

[debtprison]

I have a John Deere tractor that I bought through their finance arm. They are very strange birds, at least with my experience has been. First off, I paid my loan off prior to BK (about 6 months ago) so I don't have direct experience with this situation... However, about 1 year ago, they stopped reporting to the big three credit bureaus. I called them about it back in December. The fella I talked to said they essential have "stopped playing the game" with them by and large, don't report and don't use them as their "primary" risk indicator, he said it was too dicey and they depend on the checks they perform internally (whatever that means.) Anyway, ff to the past month. I still have an open 21,000 limit with them. I called them, asked if they were going to close it due to bk. They said they have no reason to, I have never defaulted or been late with them. I asked him if I went into a dealership, would they loan me the money for a new tractor? (I wouldn't do this, but I was curious...) The guy told me that if my income was still on par with what it was when I opened my credit line, sure, no problem...

The bottom line here, in my experience, Deere is their own finance arm. They are very aware of the current economic scene and are not your typical finance group. I don't know if that would be good or bad in the OP's situation but I would talk to the lawyer and talk to Deere IF the lawyer points you in that direction. I've found them to be very honest and open, never seen a bank like that before.

By the way, they also run under the name of FPC Financial if that is of any help...

Both of my parents worked for John Deere prior to retiring. They are more ethical than many for sure and have many things in house where others outsource. It's not exactly related to the BK forum but for a long time they had their own in house health insurance program which was considered one of the best int he country long ago. Of course that went by the wayside and things are outsourced now.

[brokeasajoke]

I have a John Deere tractor that I bought through their finance arm. They are very strange birds, at least with my experience has been. First off, I paid my loan off prior to BK (about 6 months ago) so I don't have direct experience with this situation... However, about 1 year ago, they stopped reporting to the big three credit bureaus. I called them about it back in December. The fella I talked to said they essential have "stopped playing the game" with them by and large, don't report and don't use them as their "primary" risk indicator, he said it was too dicey and they depend on the checks they perform internally (whatever that means.) Anyway, ff to the past month. I still have an open 21,000 limit with them. I called them, asked if they were going to close it due to bk. They said they have no reason to, I have never defaulted or been late with them. I asked him if I went into a dealership, would they loan me the money for a new tractor? (I wouldn't do this, but I was curious...) The guy told me that if my income was still on par with what it was when I opened my credit line, sure, no problem...

The bottom line here, in my experience, Deere is their own finance arm. They are very aware of the current economic scene and are not your typical finance group. I don't know if that would be good or bad in the OP's situation but I would talk to the lawyer and talk to Deere IF the lawyer points you in that direction. I've found them to be very honest and open, never seen a bank like that before.

By the way, they also run under the name of FPC Financial if that is of any help...

[Never_Again]

Some are. Some aren't. Cars, boats, anything with a title, are generally perfected liens.

Purchase money security interests, are not. And again, are rarely, acted upon.

While I'm certain the good folks over at John Deere may like to believe their products maintain a higher level of resale, and it's true brand-name sometimes does.
We are talking about a used lawn mower here.

This is about as good as the advice saying the guy that he sold it to has the problem.

We are talking about a used piece of equipment. I am offering advice based on first hand dealings with the creditor. They are used to commercial financing as well. And guess what... they WILL ask for the ZT mower back. I know. When I got behind on my payments with them, they did ask. They didn't send the repo guy out, because I caught the loan up rather quickly. Usually, the repo guy is the dealer who sells it, so it is pretty easy for them to do.

Your lawyer also can not advise you to do anything illegal or fraudulent, so he will guide you in the right direction here. You probably will be paying them back. Or, you can risk charges for fraud. This could be a real problem, so seek competent advice.

[Chowder]

However, many purchase money security interests are acted on. How about cars? They are generally repossessed

Some are. Some aren't. Cars, boats, anything with a title, are generally perfected liens.

Purchase money security interests, are not. And again, are rarely, acted upon.

While I'm certain the good folks over at John Deere may like to believe their products maintain a higher level of resale, and it's true brand-name sometimes does.
We are talking about a used lawn mower here.

[Never_Again]

I think that your attorney will suggest that as well.

However, many purchase money security interests are acted on. How about cars? They are generally repossessed

The quads and jet-skis that you read about on here never being picked up are generally ones that are bought through the manufacturers credit cards (these are really credit cards, with the extremely high interest rates to go with them.) Many times, they consider this high interest rate compensation for the losses.

Plus, quads and jet skis may really be worth very little by the time that they have depreciated.

Still, purchase one with a loan from a bank or credit union, and they WILL repossess it, to recover some of their money.

Having some experience with John Deere credit, and how they operate, they are more like a bank. They loan money at lower (more market) interest rates. The assets that they are financing also tend to hold their value very well. It isn't like buying a Sears or a Wal Mart lawn mower... most of the John Deere equipment like a zero turn radius mower, has commercial value, and a pretty good secondary market value. Get behind with them, and they WILL come get the collateral.

Still, all is not lost, and you should be able to get out of this situation, with some effort. It may cost you some, but they would have gotten their money had you paid them off when it was sold, and the unsecured creditors you paid would have gotten nothing in a bankruptcy.

[Chowder]

Ok, I am filing chapter 7 and have a John Deere account that I bought a zturn tractor with for about $6500. I had it for 2 yrs and sold it recently for cash to a random person after I put it up for sale. I used the cash to pay bills and kept paying my John Deere debt. Like I said I am filing chapter 7 soon and I have heard John Deere can put a lean on the tractor even though I don't own it and the poor guy who bought it can lose it if he takes it in for service. Is this true and if so what should I do? I don't even know the guys name or contact info to tell him there could be an issue.

Bottom line.

Purchase money security interests, like this, are almost never acted upon. They do not want the items back, they want your money.

I've read dozens of posts here about debtors surrendering quads and jet skis, that are NEVER picked up.

Of course your hitch is that you don't actually have the item.

You could play hard ball, act as if you still have it, and see what happens.
Chances are, nothing will.

But I'll bet your Attorney will suggest you settle with them.

[debtmonster]

Take internet advise with a grain of salt.

Agreed... except for my Internet advice. Add pepper to mine along with the salt.

[catleg]

Three possibilities come to mind.
1. Just list as a secured debt on your bankruptcy, reaffirm and continue paying.
2. List as a transfer (sold to unknown party for cash), list debt as unsecured, hope Deere walks away.
3. Talk to Deere, ask them how they want to handle it (honesty is the best policy).

In the 2nd case your exposure is if they repo it from guy you sold it to, then he sues you for what he paid you for it. In 3rd case, Deere still has security interest in mower but if the guy services it himself they may never find him. So again maybe they object to being listed as unscheduled and you reaffirm the debt. Need to ask a lawyer what to do really. Probably a negotiated settlement with Deere is the easiest way out. (They probably don't really want a 2 year old used mower back).

[Never_Again]

I had a John Deere account. I sold the tractor, but I paid John Deere off, and used the extra equity to pay off another bill (I was trying to clean up my own mess.)

You will find, if you look at your note, that the serial number of the tractor and any implements that you purchased will be listed on the note as collateral. The note also strictly says that you may not sell or give away the collateral. That is just the way that it works. You are not talking a computer that you buy with a best buy card (they will say that is collateral, but not really.) John Deere credit offers purchase money loans, generally at very good interest rates. Plus, their equipment holds its value very well, so they probably take their security lien seriously.

That said, it is now done, and you need to deal with it. I doubt that they will take the tractor from the person who purchased it from you. Theoretically, they probably could, but think about it... they will want to sell him a new tractor someday, and that move certainly would not make him consider a John Deere very highly now, would it?

What about you? Yes, you committed an act of fraud at best, and theft at worst. This debt will probably become non-dischargable, given this. They will probably threaten you with legal (criminal) action, so you will end up paying. It still might be better in the long run, if you are discharging significant other debt.

Yes, this is a relatively small amount, but to report the act of fraud to the trustee and to a district attorney will really not cost John Deere much money (none), and could cause you a great deal of headache. Therefore, they have nothing to lose.

This is still a legal matter for your lawyer to handle. I am not sure, but if you warranted a clear title, and you misrepresented this to the purchaser, who is liable in this circumstance.

Not a smart move, but we all have done stupid (myself probably more than anyone!) You will probably have to now make this right.

[joh]

Take internet advise with a grain of salt.

[drowningNdebt]

or theft by deception and criminal simulation. both felony offenses. i would figure this one out ASAP!

[frogger]

No you would have the issue. You would have sold something that wasn't yours to sell. So it wouldn't legally belong to the other person even though he paid for it.

It could also be called theft by conversion...

[hereforinfo]

If they want the thing back, I'd say the person he sold it to has the problem.

No, it wouldn't work that way. They wouldn't likely even know how to find that guy. The debtor would be responsible for producing the collateral, or they could potentially make it non-dischargeable.

[Calthius]

No you would have the issue. You would have sold something that wasn't yours to sell. So it wouldn't legally belong to the other person even though he paid for it.