reaffirm patio doors financing ???

[porkchopcash]

3 years ago had high end patio doors put in and signed finance papers through American General Finance for about $7000.
Made minimum payments and about $5000 of this debt was included in BK.

Lawyer office just got demand from American General for me to reaffirm or surrender secured property. They also sent a reaffirmation agreement with reduced interest rate. I obviously won't sign it.

These are custom made doors and I do not believe they would want to come take them out of my house.
Is this just a bluff or will they come get doors?? I assume others have had similar experience with financing for custom windows or doors.

Should I worry about this and how should I respond?

[BKAttyMI]

I would tell any of my clients to call their bluff, the doors probably have little value outside of your house. Be ready to turn them over though if need be.

[porkchopcash]

BKattymi,
I think I will call their bluff, however I do not want them to come get the doors. If it got to that point I would probably make some lowball offer ($900??) to pay off doors and keep them from proceeding.
My question would be how long they have to come get them. If I refuse to reaffirm can they "repossess" the doors a year from now??

[AngelinaCatHub]

BKattymi,
I think I will call their bluff, however I do not want them to come get the doors. If it got to that point I would probably make some lowball offer ($900??) to pay off doors and keep them from proceeding.
My question would be how long they have to come get them. If I refuse to reaffirm can they "repossess" the doors a year from now??

American General is known for tricks. We had two car titles securing a 5K loan. Both cars went under and where trashed. They attempted to slip in a reaffirmation agreement at my 341 with the Trustee, would you believe? He simply handed it to me and said I don't know why this is here but here is your mail. LOL.

Take advice from your poster in MI. Don't let them in to repo anything. Make them get a warrant to surrender the item. I would not give them one penny for recompense. They are a known shill company. Tell them if they remove the doors, they must "make it as it was, before the doors where installed".

Trust me, they will not go further. 'Hub

[AngelinaCatHub]

I borrowed money from American General for my business. After my business closed, it was difficult to make the full payment amount. I tried to send partial payments, which they assured me there would be no problems. After I would make a payment, they would begin calling me five days later, asking when I was going to make another payment.

The manager sent employees to my house for collection and also contacted my elderly parents, who are not parties in this loan. The harassing phone calls would total four or five in one day.
After making a payment that was agreed upon, within ten days, I was served with papers to appear in court.

Upon reviewing my payments for 2010, I have discovered that I have paid over $15000 this year in payments. My second mortgage has decreased only $1100. Even with the high (9.9%) interest rate, the interest being charged is far more than required. I also pay $200 over the minimum every month - which means that my principle should have dropped AT LEAST $2400. I am only going on payments I have made for 2010 -

I have had this loan for 4 years and it is only $2000 less than the original balance of $98,000. At $800 a month, this loan balance should be much lower. Either the interest is being miscalculated or the payments are being misapplied.

http://www.consumeraffairs.com/finance/american_general_finance.html

[porkchopcash]

I would tell any of my clients to call their bluff, the doors probably have little value outside of your house. Be ready to turn them over though if need be.

Amer Gen sent my attorney a copy of the contract signed for financing. It does have small print giving them a security interest in the product purchased (doors)

What now? What is the time frame and procedure for them if they want to get the doors? What process do they have to go through and what happens if we just ignore them. Will they randomly try to repossess them or do they have to petition the court for that order?

I would like to just run out the clock on them but don't know what that clock is.

[debee]

It may have cost you 7K to put the doors in, but once they get to the architectural salvage shop they're worth a few hundred bucks. It would cost the creditor too much to come get them.

The court action costs money, the wages for the carpenters to come and uninstall them, the truck they would need to load them onto, the gas for the truck, the maintenance for the truck, the mandatory mid-morning break for coffee, the insurance for the truck, the warehouse to store all the repo'd doors and sinks and ceramic tiles, the security for the warehouse, the personnel to coordinate the sale of the salvaged bits and so on.

It would cost them more than the doors are worth to come and get them.

[porkchopcash]

debee,
I agree with everything you are saying. However, is there a next move for them and when is their time up?

[debee]

Whether or not they have to file a lawsuit to recover the doors will depend on your state law. It would be a repossession and would have to be voluntary and could not breach the peace. They would not be able to leave gaping holes in your house or to cause any damage.

The lien passes through the bankruptcy unaffected. However you have the protection of the permanent injunction and they could not pursue/harass you for payment.

If they filed a "fixture" lien with the county recorder, I think those last for 5 years. They can be renewed. You should be able to check that through your county recorder. It would be filed where mortgages are filed.

If they did not file the financial statement which creates the fixture lien before installing the doors, or within 20 days of installing the doors (depending on to what extent your state has adopted article 9 of the UCC) the mortgage lien might take priority over the fixture lien and prevent them from ever taking the doors.

Also, if the lien was not recorded as a "fixture lien" at the time of your filing, depending on your state law, the trustee may use the strong arm clause 544 (a)(1) to avoid the lien during your bankruptcy. In this case, the lien would not pass through.

There are other ways they may be prevented from taking the doors which depend on the documents and loan terms that they would have to produce in court. There are specific criteria that the documents have to meet in order to establish a PMSI in the first place.

It's sketchy info, but might help get you closer to the answers you need before deciding how to proceed.

ETA: If they filed a fixture lien within 90 days of your filing, those can be avoided too.

[mysticspirit25]

I think the major fact that everybody is forgetting here is regardless of the PMSI or whatever, the doors cannot be taken. Once installed, they became a permanent part of the residence. They simply cannot be removed. In the unlikely event that they can (which is 99% doubtful), they cannot simply leave a hole where the doors are, they have to put the old ones they removed back (they simply cannot leave a hole or put up boards). Regardless of liens, or PMSI's, they can't do anything. They subbed this out to a contractor who does not have the old doors, and AGF (now springleaf financial) can't do ANYTHING.

[debee]

A fixture lien will cloud title. At some point, if OP ever wants to sell, he will need to deal with it.

If it were me, I would be discussing these issues with my attorney to determine the best strategy. I don't think that would involve giving them any money now, but wait-see how the bk plays out and look into the lien issue & an offer after the bk, especially if the house is surrendered in bk, is underwater, etc., those are all factors that need to be considered.

I don't think they will take the doors either. Not a smart business move. But whether or not they can will depend on how they're attached and how Indiana defines a fixture. If they can be easily removed - on hinges or lifted out of a track - they may be able to remove them and replace them with plywood. I don't think they will.

[porkchopcash]

No these are not the kind of doors that can be easily removed. They are custom and installed in the frame. Talked to lawyer. He promptly returns calls but has no time for chat. His style is very businesslike and he is sharp.

He asked me if I would pay $200 to make this go away. I said yes. He said he would file a motion to redeem the doors for $200 with the court. Apparently if the court approves it then the vender will accept it.

Sounds good to me. I don't want it hanging over my head.

[debee]

Sounds like a great plan, porkchop. I forgot about redeeming. $200 would be a nice end to it!

[porkchopcash]

yes, I am good with it. We are keeping the house and just want everything to end cleanly.

I will update after we know something.

[helpmeout]

Amer Gen sent my attorney a copy of the contract signed for financing. It does have small print giving them a security interest in the product purchased (doors)

Now the question is, did they properly record this security interest? If not, then they are out of luck.