Secured debts from Electronic Store

[myheadache]

I just realized that my camera that was bought last year on a Best Buy credit card is considered a secured debt. It wasn't very much- about $400. That's the only purchase made on the store credit card. Now I'm confused on what I need to do and what to check off in the paperwork. Anyone had a similar issue???

[b_girl]

We had a Best Buy card which we used to purchase several electronic items (none within the past 3 years). Our lawyer informed us that BB wanted us to re-affirm this debt because it was considered 'secured collateral'. We just laughed...the computer is so old it's obsolete, as are most of the items we purchased, so no, we didn't re-affirm. They did not show up at the meeting and we haven't heard a word from them yet. Course, the automatic stay is still in effect, but I doubt they'll really try to come and take their old junk, but our attorney warned that they could. Ask your attorney what this might mean for you, since your item is newer...but for $400, I just don't see it happening.

[Stilltheone]

We had a similar situation with our electronics and furniture. My husband purchased a stereo surround sound system about 6 months prior to filing and they never said boo to us. Their credit card was banked by GE Money Bank, but I think it was still secured.

Same with furniture....furniture was taken out in an actual loan from American General in December and they never came after us.

Good luck!

[magyar123]

They have 60 days to object to the dischargeability of that debt.

[jktrading]

I don't understand how it could be "secured." It's not a car or a house that you need to have ownership papers to sell. What if you sold the items and no longer have them? How is that secured?

[jktrading]

Nothing in the Best Buy credit application says anything about it being secured in any way. Just go to their website and choose "print application" to see all the fine print. You don't actually have to print it out. Where are people getting that it's "secured?"

[BassBoy]

You need go further than step #1

Under the "IMPORTANT TERMS OF YOUR CREDIT CARD ACCOUNT AND DISCLOSURE STATEMENT" which is after you've gone through the first step of the application process, it states under "Important Terms, Conditions, and Disclosure"

#5. SECURITY: Except as indicated below, you grant us a purchase money security interest in the goods purchased with your Card and in all insurance contracts and all proceeds, returned premiums, mechanical failure and extended service contracts, and refunds of charges for mechanical failure and extended service contracts financed therewith. Each good purchased on your Account will secure the entire Account balance until such good is paid in full. For purposes of determining which items are subject to a security interest, payments received will be deemed to be applied first to any unpaid insurance premiums (if applicable), Finance Charges, and fees and then to pay for purchases on the Account in the order in which they were made. When sufficient payments are made to repay the portion of the Account balance attributable to the purchase of a particular good, we will release our purchase money security interest in that good. Goods covered by a security interest may be taken from you if you do not pay on time. We may require you to make them available at a convenient place of our choice. We waive any security interest in your home if the goods are installed and in any goods purchased with credit card checks. We take no security interest in goods where the original purchase price is less than $200 if you live in New York and in goods where the original purchase price is less than $700 if you live in Maryland. If we repossess any goods purchased with your Card, we may charge you our repossession costs including, but not limited to, necessary repairs, storage fees and costs of sale when and as permitted by law.

The exceptions mentioned in the opening statement of #5 is Arbitrations.

[Stilltheone]

I've always stated that if any of our creditors wanted our "secured" things back, they can have 'em...but they need to go through the proper channels to get them. They need to sue me and file paperwork and get a warrant. Those things cost money. Those things cost time. My property does not have that much value for a company to go after their product.

[jktrading]

#5. SECURITY: Except as indicated below, you grant us a purchase money security interest in the goods purchased with your Card and in all insurance contracts and all proceeds, returned premiums, mechanical failure and extended service contracts, and refunds of charges for mechanical failure and extended service contracts financed therewith. Each good purchased on your Account will secure the entire Account balance until such good is paid in full. For purposes of determining which items are subject to a security interest, payments received will be deemed to be applied first to any unpaid insurance premiums (if applicable), Finance Charges, and fees and then to pay for purchases on the Account in the order in which they were made. When sufficient payments are made to repay the portion of the Account balance attributable to the purchase of a particular good, we will release our purchase money security interest in that good. Goods covered by a security interest may be taken from you if you do not pay on time. We may require you to make them available at a convenient place of our choice. We waive any security interest in your home if the goods are installed and in any goods purchased with credit card checks. We take no security interest in goods where the original purchase price is less than $200 if you live in New York and in goods where the original purchase price is less than $700 if you live in Maryland. If we repossess any goods purchased with your Card, we may charge you our repossession costs including, but not limited to, necessary repairs, storage fees and costs of sale when and as permitted by law.

The exceptions mentioned in the opening statement of #5 is Arbitrations.

Thought I checked it all. Thanks.

[BassBoy]

I just realized that my camera that was bought last year on a Best Buy credit card is considered a secured debt. It wasn't very much- about $400. That's the only purchase made on the store credit card. Now I'm confused on what I need to do and what to check off in the paperwork. Anyone had a similar issue???

Now, trying to keep the thread on track........what would like to do? Do you want to keep the camera? I'm going to take a guess here and say that because you probably owe so little, you may not have to do anything. HSBC, which is the lender for Best Buy, may never say anything and you'll get to keep the camera. It would cost them way more than what the camera is worth to recover it. If they do decide they want the camera back, they'll add in the fees they incurr to repossess it and the amount you owe them will be more, but that doesn't affect you much.

Being an old law filer, I do not know if debtors have the option to retain without reaffirming, so others who filed under the new laws, that are/were in a similar postion may be able to offer some additional advice.

[jktrading]

BassBoy: What if you no longer have the item?

[BassBoy]

I suppose if it was a high priced item, the creditor may want to see a Bill of Sale if you sold it, but in my opinion, I would say (but never tell anyone to say) "The item was damaged beyond repair." Be careful if you use this though because most people who have high priced electronics and such would have those item insured in case of an Act of God.

In any case, the property still has that security interest and would not automatically clear you of you liability to the debt. If your home or car caught fire and was completely destroyed, but wasn't insured/or insurance didn't cover the amount owed, you would still owe the balance.

I'm going to guess and say that it depends on what the item(s) were and how long ago they had been purchased. You never know sometimes what these creditors may ask for, so I would always advise anyone to make sure they think of every possible scinerio. I think of it this way..........they'll do whatever they can to get us to pay the debt, so I'm going to assume that they will try and means necessary to sneak in their dirty, little tricks.

[b_girl]

Thanks for the info, BassBoy. We also have furniture financed from HSBC that is about 4-5 years old and were told the same thing (it's secured collatoral so re-affirm). We didn't, so it's wait and see I guess. I really can't see them coming after old furniture--if it were newer, though, I would be more apprehensive.

[myheadache]

thanks everyone. So on the statement on intention, what do I check off for this? (I'm filing on my own)... surrendered? exempt? redeemed? reaffirmed? I also doubt that they'd actually try to get it back. If I choose "reaffirm" doesn't that mean that I have to pay it back? I think I'm confusing myself. thanks..

[jktrading]

In any case, the property still has that security interest and would not automatically clear you of you liability to the debt. If your home or car caught fire and was completely destroyed, but wasn't insured/or insurance didn't cover the amount owed, you would still owe the balance.

Not to be difficult, but wouldn't BK cover that? I mean, you no longer have the item(s), so they would have to go after cash like everyone else, right? Are you saying that because of the security clause in the contract, BK wouldn't cover that in case you sold the item(s)? They obviously can't get the item(s) back if you honestly don't have them.