What happens to secured debt during bankruptcy if you don't own the items?

by **kendon19** » Sat Dec 17, 2011 3:24 am

My mother-in-law bought my wife and I a new washer and dryer on a store credit card as a wedding present. Unfortunately, she has had nothing but bad luck for the last couple years and she is now at the point that the only option she has left is to file for bankruptcy. As far as mother-in-laws go, I couldn't have asked for a better one! She is a great woman who was left to pay all of the bills when her husband passed away. As much as I would love to just give her the money to pay for these, my wife and I are both recently discharged Army Vets with three young children and do not have that type of money. What is going to happen when she files for bankruptcy? Are we going to lose these them? Any help information would be great so my wife and I can try to prepare for the future. If it helps at all, we live in Wisconsin.

Thank you

by **wahchintonka48** » Sat Dec 17, 2011 3:28 am

Clear all your doubts about bankruptcy here at http://bankruptcy-info.we.bs/

by **delron** » Sat Dec 17, 2011 3:31 am

Clear all your doubts about bankruptcy here at http://bankruptcy-info.we.bs/

A store credit card is not secured debt. Secured debt is like your car...the lien holder has ownership of the car until you pay it off. Credit card debt is unsecured debt. Your washer and dryer should be just fine.

by **gilleabart** » Sat Dec 17, 2011 3:39 am

They are not going to come take the washer/dryer away.

by **voliny13** » Sat Dec 17, 2011 3:40 am

They are not going to come take the washer/dryer away.

Actually it depends on the cardholder agreement. These could be secured. For instance sears is renowned for securing small things bought in their department store.

Good new is that if they are secured she may be able to reaffirm them for very little.

Just check the cardholder agrements.

And for clarification. There does not have to be a lien on a piece of property for it to be secured and the person who borrowed you money does not "own" the property. You own the property contingent on your repayment of debt.

All there has to be is a security agreement and a loan of money.

by **cadby** » Sat Dec 17, 2011 3:56 am

How long ago did she buy them for you. If it wasn't in the last 6 months then they won't touch anything. If she had spent more than $500 on one card within the last 3 months the credit card company can dispute it and she would owe whatever she charged that was $500. If she hasn't then she has no worrries about it. Me and my husband bought an expensive TV last year when we were doing really well. He lost his job and we filed for bankruptcy this month. They aren't going to take our TV, It is considered exempt property.

by **flannagain** » Sat Dec 17, 2011 3:58 am

If she purchased the washer and dryer in the last 90 days AND they cost more than $550 total, it is a possibility that the credit card company could object to the discharge of that debt only. If the purchase occured more than 90 days ago, chances are you have nothing to worry about. Creditors rarely repossess used items unless they are of considerable value, such as a vehicle or another type of luxury item. If she purchased the w&d less than 90 days ago, she will need to alert her bankruptcy attorney to that fact.

by **marlan43** » Sat Dec 17, 2011 4:13 am

The short answer is that you will not lose the washer and dryer. Some stores will take a security interest in goods that are purchased with a store credit card (Best Buy, furniture stores, and some appliance stores come to mind). So, you may be right that the washer and dryer secure the debt. However, in most cases, those stores will not repossess the items. They use the security agreement to try to force the debtor into signing a reaffirmation agreement (agreeing to pay the debt despite the debtor's bankruptcy). But, they really have no interest in taking possession of used goods. Also, if the debtor no longer has the goods, there is not much they can do.

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