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     | Sunday, February 13, 2000 - 03:33 pm  My husband and I were told that when we filed our bankruptcy (June 1999), that one of our creditors was aggressive about re-affirming debt and/or reclaiming their property. The bankruptcy was discharged September 1999, and this creditor had not contested the bankruptcy, but still sends us bills. Are we still liable for this debt if we still have the property, and can they still adversly affect our credit even though no arrangement was ever made to pay for or return the property?
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| | Sunday, February 13, 2000 - 04:07 pm Is it Sears, by any chance? They have a reputation for that sort of thing. Regardless of who it is... Reaffirmations are *agreements* between the debtor and creditor, and notice of them must be filed with the court. Check your original account terms (e.g. Cardholder Agreement) to see if the creditor specifies that they claim a security interest in the merchandise. This would make them a secured creditor, potentially entitled to return of merchandise during the bankruptcy process. But if they wanted to file a secured creditor's claim, they may have lost their chance. A security interest in household goods (e.g. purchases from a department store) isn't really worth much, if anything, because resale is impractical. But they may be using this contractual clause as an excuse for keeping up with the collection efforts. Get copies of your credit bureau reports (available from the link below), and see if the creditor is still reporting the account as open (and delinquint.) If the creditor in question is Sears, do some reseach (try a search engine) for the details of their previous problems, which included heavy fines for improper bankruptcy reaffirmations. Talk to your attorney (the one who did the BK, if s/he seems competant.) If the debt is properl;y listed on the discharge, then you shouldn't be liable. Please note that I am *not* an attorney, and this should *not* be relied upon or contrued as legal advice. http://www.cardreport.com
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| | Sunday, February 13, 2000 - 05:42 pm I had this situation with Sears and Robinsons. I was told by my attorney that they were very agressive and would make me re-affirm everything. Robinsons did but Sears never contacted me. Well after it had been discharged they started to send me bills. I tried to contact them because I had never signed a reaffirmation agreement with them. I was always told that somebody would contact me and they never did. They stopped sending me bills and I just kind of let it go. I did pay off Robinsons however. Last year I received a notice that I was part of a class action lawsuit with Robinsons because of their reaffirmation tactics. I ended up receiving everything I paid them plus interest. I still haven't heard from Sears. I checked my credit report and it says it is "hidden" from creditors checking my credit report while it is being checked. This has been for a few years now. Let us know what company you are dealing with
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| | Sunday, February 13, 2000 - 06:58 pm To understand this, I need to make an analogy. The example I use is from Florida law and may not apply to you exactly. But follow the principles. Suppose you have a home that you have not yet paid off. You owe the bank because of a promissory note or a mortgage note. You also agreed at the time of purchase that if you failed to pay on the note, then the bank can take the home as collateral. There might be a security agreement and a mortgage deed. So if you default on the note, the bank forecloses on the home and sells it, usually for less than what it is worth. The bank applies the sale proceeds to the amount that you owe. But if you owed $100,000 and the house sold for $80,000 then you still owe $20,000 on the note. In this example there are two kinds of liability: in personam liability and in rem liability. Bankruptcy will only discharge the in personam liability. What is in personam? That is the liability that you personally have. In rem is the liability that the property has. Think of liens. If a person with a mortgage defaults a year after bankruptcy, and never signed a re-affirmation that allowed his/her in personam liability to survive discharge, then the only liability left is the in rem. So the bank cannot pursue the person for his/her liability on the note. But the bank can foreclose on the home. In some states, there is the equivalent of a mortgage on consumer goods. And the same principles apply.
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| | Sunday, February 13, 2000 - 07:29 pm AOL kicked me off after I finished a lengthy second post which continued the above analogy. I'll try again after I get over the frustration.
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| | Monday, February 14, 2000 - 05:23 am Whether or not this mortgage equivalent exists on your property is the first issue. I'll oversimplify for time's sake. Every security interest must be perfected to be enforceable. There are different procedures for perfecting liens on each kind of property. For example, in Florida to perfect a mortgage lien one needs a mortgage deed. And in Florida a lien on consumer goods (a purchase money security interest) is automatically perfected. I THINK that comes from the UCC so it may be the same in your state. If so, there is still a lien on those consumer goods, whether or not you reaffirmed. Even if a secured proof of claim is not filed, a perfected lien survives bnk. Now the issue is whether the creditor will come after the property. They usually threaten to. But it is often a bluff. Whether they come after it a matter of both economics and human nature. Let's address economics. That deals with the type of property, age and fair market value (FMV). Sears is more likely to come after a 50" TV (even if it is 1 year old) than they are to come after a T-shirt (even if it's only 1 month old). Some types of property depreciate more quickly and are not amenable for resale. But consider human nature. I imagine (THEORY) that some creditors might be irrational and pursue the property in spite, even though they know that they cannot resell or even store it. To apply this to your situation would require some knowledge of how this particular creditor conducts itself in your region. Do they bluff? If not, then how much will they settle for if you offer to keep this type of property, with this age, for a percentage of the total debt? I doubt that you will get the answer here. Sounds like a localized issue.
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| | Monday, February 14, 2000 - 06:28 am I had a 2 year old regrigerator from Sears. I did not want to reaffirm it so they said they would be out to pick it up, even made an appointment. I waited all day, no show. That was 3 years ago. I've never heard from them since.
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| | Monday, February 14, 2000 - 07:20 am Even though I know that they bluff, that surpises me that they would go that far and not follow through. But what would Sears do with a 2 year old fridge anyway? Sears would have to pay a mover and then occupy valuable space by storing it. If it were ever moved to the sales floor it would just take up space that could be occupied by a new, higher priced fridge.
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| | Monday, February 14, 2000 - 07:30 pm Sears is quite comical. When I was doing small claims judgments and was handeling the BK's for our credit union, I would see Sears on a daily basis at the BK court. They were so obnoxious that the trustee would not even let them speak. Additionally I contracted with Sears for about a year. I never saw such disgusting tactics used by their collection staff. I had quite a few scraps with Sears. When they would harass a debtor for merchandise after a BK I basically told them: You could have rose the issue at the debtors 341 meeting, you did not. You received a notice of filing and were discharged successfully. It's your problem if you did not request the merchandise back at the 341 hearing. Their reply? O.k.---end of story. Never bothered the debtor again. Their collection staff consisted of students and people with little skill or knowledge of the law. That is why they suffered such a huge lawsuit. No one ever new what to do within the company. Kristi Feathers
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