top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

Floor plan items sold out of trust

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Floor plan items sold out of trust

    Has anyone gone thru this where they had a floor plan program for financing inventory? I have $4000 aprox. due to the floor plan company on items that were sold out of trust. I am wondering how this will go thru a chapter 7 or 13. The company owing is a DBA proprietorship which will be bankrupt when i am. Any thoughts, ideas? A quick google of this subject comes up bare bones.

    #2
    So, let's make sure we understand. You used standard inventory (floor plan) financing, you sold the items, but didn't pay back the finance company, is that what you are saying?

    Comment


      #3
      I guess you're saying that you utilized floor plan financing to purchase inventory, sold the inventory, but never paid the lender?

      With floor plan financing, I believe that underlying State non-bankruptcy law grants them a statutory lien on all inventory purchased by that particular financing package and/or all your inventory. I don't know if this extends to inventory where you sold it but never paid the lender.

      I'm not sure of you question though. So, are you asking if the debt would be dischargeable because of the lien on the inventory? (I can't really see that it is non-dischargeable.) The lender may be out of luck. Hopefully, you have a good attorney who understand business that operate like car dealerships (where inventory is purchased under a floor plan).
      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
      Status: (Auto) Discharged and Closed! 5/10
      Visit My BKForum Blog: justbroke's Blog

      I am not an attorney. Any advice provided is not legal advice.

      Comment


        #4
        I'm not sure of you question though. So, are you asking if the debt would be dischargeable because of the lien on the inventory? (I can't really see that it is non-dischargeable.) The lender may be out of luck. Hopefully, you have a good attorney who understand business that operate like car dealerships (where inventory is purchased under a floor plan)
        The issue is one of fraud. You are correct, non BK state law would control. If the lender has a security interest (which they always do) and you sell the items and don't pay, that is pretty much fraud. So, if the amount was worth the time and effort of the lender, they would file an AP and probably win.

        Comment

        bottom Ad Widget

        Collapse
        Working...
        X