Respossession after discharge?

[royaloak]

We received our discharge papers in the mail last week, followed by a letter from our attorney saying that he is getting calls from Dell asking what we intend to do about money owed for computers we bought from them. He says they either want the computers or cash. The money owed was around $4000, but the computers (4 of them) are all 3-4 years old.

Dell did not send a representative to our creditor's meeting, and we did not reaffirm our debt with them. As I said, we have gotten our discharge, and Dell is listed on our schedule.

When questioned, our attorney says that Dell can indeed come back after the discharge and ask for their property or payment for it, because they objected to our petition in writing and therefore did not have to appear at the creditor's meeting.

I am posting about this here because I have not been entirely impressed with this man, and have been given conflicting information by him on different occasions. He also lost papers that we had to resupply him with, and caused our first creditor's meeting to be rescheduled because he screwed up some paperwork.

Can Dell repossess our computers, or demand payment in leiu? We live in Missouri, if that makes a difference.

[SamanthaJones]

Was the Dell debt secured, for some reason?

If so, maybe that laywer indicated in your schedules that you planned on reaffirming or returning that property?

[royaloak]

If so, maybe that laywer indicated in your schedules that you planned on reaffirming or returning that property?

According to our copies, there is no indication of this.

The only thing I see that could give them a possible out is this, taken from the back of our discharge paper:

"However, a creditor may have the right to enforce a valid lein, such as a mortgage or security interest, against the debtor's property after the bankruptcy, if that lein was not avoided or eliminated in the bankruptcy case. Also, a debtor may voluntarily pay any debt that has been discharged."

But the way I see it, this debt was eliminated in the bankruptcy or Dell wouldn't be listed as discharged. And we're certainly not going to volunteer to pay them anything!

[lrprn]

What matters in this situation is the original purchase agreement that you signed with Dell. The agreement *may* say that the computers you purchased are the security for the loan, making it possible for Dell to claim the loan was secured with the computers themselves.

If that's the case (and that's a big if), then Dell could ask for their merchandise - the computers - back since you didn't pay the 'secured' loan. However, Dell really doesn't want your computers, especially ones that are 3 to 4 years old - they are next to worthless in today's market. Dell just wants your money and are trying to scare you into paying them to keep your computers even though the debt has been discharged.

One enterprising debtor in a similar situation told Dell to come on by and pick up their merchandise....and by the way, since his computers were long out of warranty, he had been trying to repair them. Dell could find all the pieces out in his garage in paper sacks

Some folks would say that you should just ignore Dell - they will likely go away when they realize they can't threaten you into paying a discharged debt. Another option is to ask your inept lawyer to ask Dell for a copy of your original purchase agreement proving that the computers really are security for the loan and they have a right to seize them after discharge. Let us know what happens, ok?

[calif]

You may be able to petition the court to expunge the lien.
Of course your lawyer would have suggested that, or would he?
Best of luck to you.

[HHM]

You may be able to petition the court to expunge the lien.
Of course your lawyer would have suggested that, or would he?
Best of luck to you.

Actually, you cannot expunge a lien on secured debt. Expunging liens applies to non-purchase money security interests. That means, if money was loaned specifically to purchase an item, that type of lien cannot be expunged in BK, but if you took out a title loan, i.e. offered an asset as security for a loan, or that someone has a judgement against you that has attached to an asset as a lien, those types of liens (non-purchase money liens) can be avoided in BK.

[jal1129]

I also have a loan with Dell for a computer and when I first went in for my free consultation the lawyer went over my list dividing secured and unsecured and told me right up front Dell was secured. Actually I went to a couple different consults and was always told that Dell is secured. I also did a search on this site and it looked like everyone who has ever dealt with Dell found out their loans are secured. Sorry, I wish I had better news. Keep us posted on what happens.

[petrified]

>>He also lost papers that we had to resupply him with, and caused our first creditor's meeting to be rescheduled because he screwed up some paperwork.<<

I wonder if we have the same lawyer!!! My 341 was adjourned for much the same reason (plus US Trustee got involved the week prior to original 341).

I am waiting to see what happens with Dell also - only difference with me is that I was the personal guarantor on leased computers for a business. Not much I can do since I do not have the computers in my possession.

In your case, I am wondering if Dell would accept Fair Market Value for your 3-4 year old computers?? If not, just backup all your data and tell them to come and get them! You can get all kinds of computers on eBay for much less than you'd pay for a new one. (If they do come and get them that is).

P

[rrockinggramma]

What about a replevin? Doesn't Dell have to get that before any computers can be reposessed especially since the discharge has been granted? Perhaps you could settle with them for FMV of the computers now?

[SamanthaJones]

Articles re: collecting debts that were discharged:

(Do not know how to add hyperlinks)
www.************************
On left go to 'categories'
Scroll down to 'discharge violations'
There are two recent articles discussing this same situation.

[CindyLou]

dell is full of %$^&. Ask them for their shipping address and I bet you never hear from them again!

[hansky]

dell is full of %$^&.

Please explain the basis for this comment. Do you have facts not stated in the original post, such as the basis for Dell's claim and whether or not they have a security interest in the property?

[gacreditguy]

A security interest clause is likely part of your credit agreement with Dell. MANY MANY business that finance do the exact same thing. I know that HSBC does as they are the finance company for BestBuy and a now defunt furniture store chain, among others..

The answer to your question is 99.9% YES!! The computers, even though discharged in BK, are secured as part of that agreement. And YES, they can come back to get them should they desire to do so. However, they cannot just show up and ask where they are! There is a lot fo red tape they are going to have to go throgh to get there. It is going to cost them money to get the computers back and we both know they do not want to spend money for a 3-4 year old computer. However, this would be their call!! Never doubt what a creditor will do.

When I was discharged I had two loans with BestBuy and Rhodes Furniture that were secured and starting receiving the nasty grams almost immediately after BK Discharge and finally wrote a letter advising I was not able to pay them anything and if they wanted the furniture and small stuff from BestBuy, then come and get it BUT go through every legal step you must go through before you show up at my door. After sending that letter I never heard another word from them again.

However, just because they backed down does not mean that they are gone forever. They still have rights to the property and that could change any day. I am not worried though..