Servicing agent

[cbaker049]

Today I received a letter from five lakes agency Inc saying they are acting as the servicing agency for sterling Jewelers for an acct I had. What the heck does this mean? Are they attempting to sue me via an adversary proceeding in my bankruptcy? It says in the letter they would like to know my intentions on what I want to do with the merchandise from sterling jewelers. I have no idea where it is. The total for debt is $1600. Also like always it says we will assume the debt to be valid unless we hear from you in 30 days. All I can find online is servicing agencies and mortgages.

[justbroke]

When you open an account with Sterling (Jareds, Kays, etc), and purchase any of their products, you grant something known as a purchase money security interest (PMSI) in each item that you bought from them until it's paid. In other words, you give them a "security" interest no different than a mortgage.

In your case, as in most others, Sterling sold this "bad debt" (bad because you filed bankruptcy) to what's known as a junk debt buyer (JDB). The JDB then seeks to enforce the security interest by asking you what you are going to do with the jewelry because they own that security interest. Since you pledged, involuntarily or voluntarily, the jewelry in exchange for paying for it under Sterling's credit terms, they can ask that you Redeem, Reaffirm or Surrender the collateral (the jewelry).

If you filed Pro Se, you probably didn't know anything about PMSI, collateral and that you needed to show, on your Statement of Intentions (SOFI) what you want to do with the collateral (redeem, reaffirm, surrender). They are not suing you. They are demanding that you choose one of the only things that you can do with property (other than real property); redeem, reaffirm or surrender. If you don't, then they can demand turnover by asking the court to force you to turn over the property if you're not going to redeem or reaffirm. If you filed with an attorney then you may want to ask what you should do. There are some strategies, right or wrong, that suggest that you ignore them and see what they do after discharge (refer to how some people deal with Bass and Associates who collect for Best Buy).

I can't suggest a course of action for you but you will need to decide whether you want to redeem, reaffirm or surrender the collateral.

(Note: if you already knew most of this please don't take it as if I'm trying to tell you thinks you already know. I answer for the sake of those who linger and read these postings so that they understand the detail of your question and why the creditor has chose to do this.)

[bcohen]

From the original posting:

It says in the letter they would like to know my intentions on what I want to do with the merchandise from sterling jewelers. I have no idea where it is.

It sounds like the jewelry has already been lost, stolen, sold, or given away, and therefore there is no "collateral" to surrender or redeem. Under these circumstances, the only options are to ignore the collection agency, or to send them a letter stating that you do not have the jewelry anymore, that you don't know what happened to it, and that they are to cease and desist from any further communication with you. You are probably better off to ignore them, as they paid pennies on the dollar for the debt, and aren't going to invest thousands in filing an AP which would be unwinnable by them. The bankruptcy discharge extinguishes any personal liability for the debt.

[justbroke]

I didn't even catch that bcohen (the "I have no idea where it is").

With that cbaker049 you will just need to ignore them or tell them that you are no longer in possession of the collateral.