QUESTION
Will you please explain the benefit of going through bankruptcy?
Asked on Jun 05th, 2013 on Bankruptcy - Idaho
More details to this question:
My mother went through bankruptcy on April 24, 2012. She was entitled to a discharge. It was ordered July 11, 2012. She had a creditor take her to court on May 29, 2013. She was in NH with her mother. Her attorney had me go to court in her place. I don't understand why she filed bankruptcy if she still had to go to court. The rep from a furniture company then appeared at her house today (June 5, 2013). He threatened her and said that he would be back this afternoon to pick up everything. She owed approximately $3,300. Initially and paid approximately $2,300. The bankruptcy was approved. So, can the furniture company do this? Thank you in advance for your assistance.
13 ANSWERS
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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The filing of the bankruptcy was a legal "red light" to her creditors to stop collecting the debt. That is what she paid for when she filed bankruptcy. If I look at a traffic light all day I will see drivers run the red light although most obey the "red light" signal and stop. Creditors are the same. Most, if not all, stop. If they do not stop then you must hire a lawyer to be the policeman and punish them when they do not stop. The police services are in addition to what you paid for if you hired an attorney to do the bankruptcy. However, it sounds like the debt may have been collateralized by the furniture purchase in which case the creditor cannot collect the debt but can pursue the furniture as collateral.
Answered on Jun 10th, 2013 at 12:19 AM
Bankruptcy does not discharge most liens, in your case, a collateral agreement that may or may not be a perfected security interest in furniture.
Answered on Jun 06th, 2013 at 9:28 PM
William A. Siebert
Liens on property such as the one the finance company had on the furniture survive bankruptcy. The finance company cannot get anything other than the furniture (they can't sue for any balance after selling the furniture to third parties).
Answered on Jun 06th, 2013 at 1:04 PM
Personal Injury Attorney serving Glendale, CA
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JT Legal Group
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No one can give you a good answer without paying them. My guess is that your mother went to a cheap attorney that didn't know what they were doing and that didn't do the things necessary to protect her. It's also possible that your mother didn't tell her attorney the full story and so this debt was not discharged by the bankruptcy.
Answered on Jun 06th, 2013 at 1:03 PM
If the furniture company had a security interest in the furniture, the bankruptcy does not remove that security interest. The bankruptcy discharge prevents them from collecting money from her, but does not prevent them from repossessing their collateral.
Answered on Jun 06th, 2013 at 1:02 PM
Bankruptcy Attorney serving Florissant, MO
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Law Offices of Thomas Corcoran Phipps
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If your mother listed that creditor on her bankruptcy schedules, she does not have to pay. You need to check her bankruptcy schedules and send a copy of the page listing that creditor, along with the discharge order to the creditor.
Answered on Jun 06th, 2013 at 11:39 AM
Deborah F. Bowinski
She needs to speak with her attorney. If she financed the furniture purchase through the store they would have had a security interest in the merchandise. That means that they are entitled either to be paid the value of the furniture or, they can choose to obtain an order from the state court allowing them to repossess the furniture. Without seeing the court papers or knowing more about specifics I can't be certain what sort of court proceeding you attended it what the judge's ruling was. She needs to have her lawyer look at the documents and advise her.
Answered on Jun 06th, 2013 at 11:37 AM
A bankruptcy will discharge an individual's personal obligation to pay their debts. It is not a license to steal. When furniture is purchased on a store account, the store continues to own the furniture unless and until the account is paid in full. If you file bankruptcy & don't want to pay, that's fine, but you can't keep the furniture unless you pay for it because it isn't yours. Your mom could have applied for a court order to redeem the furniture for a lump sum of cash based on its value, but it sounds like this never happened.
Answered on Jun 06th, 2013 at 11:35 AM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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Your mother needs to talk to her bankruptcy attorney. It is that attorney's job to guide your mother through these questions.
Answered on Jun 06th, 2013 at 11:34 AM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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In NJ, it would depend on whether she reaffirmed the debt and made payments or crammed same down.
Answered on Jun 06th, 2013 at 11:32 AM
Bankruptcy Attorney serving Walnut Creek, CA
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Alan E. Ramos Law Offices
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When a discharge is entered, it eliminates an individual's personal liability for the discharged debts. There are circumstances under which creditors can obtain judgments of non-dischargeability, the effect of which is that the individual is still personally liable for the debt. With regard to secured debt (in which collateral is pledged for the debt - houses, cars, furniture, etc.), the personal liability for the debt is discharged; however, the creditor still has a lien on the property (the collateral pledged) and if payment is not made has a right to foreclose (on homes) or repossess (cars, furniture) the property. There was not enough information in your question; however, it most likely was an secured debt.
Answered on Jun 06th, 2013 at 11:29 AM
Sanford M. Martin
Her legal situation depends on the handling of the bankruptcy and the nature of the debt to the furniture company. Was the debt discharged in the Chapter 7 case? No information is provided. Was the furniture debt from a secured creditor or an unsecured creditor? No information is provided. If the furniture debt was secured, i.e., the lender retain a security interest in the furniture, the creditor can insist on payment or "repossess" the furniture, as in the case with an auto loan. So important is the proper and detailed handling of a bankruptcy case to avoid such situations.
Answered on Jun 06th, 2013 at 11:20 AM
General Practice Attorney serving Coeur d'Alene, ID
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Michael B. McFarland, PA
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Assuming your mother went through a Chapter 7, she would have to fill out a Statement of Intention, indicating whether she was going to surrender secured items or keep them, pay for them, and reaffirm the debt. If she did not reaffirm the contract for the furniture, the company is entitled to pick its collateral up after the automatic bankruptcy stay has expired. Any balance she owed them would then be discharged.
Answered on Jun 06th, 2013 at 11:18 AM