Creditor Threatining to remove all our Windows

[bknconfused]

My wife and I filed bankruptcy in July. We have our 341 meeting next Monday. Everything has been going ok but now one of our creditors who we thought was an unsecured creditor has stated that the loan we received for new windows in our home over 3 years ago are secured by the windows. He is threatining to come and pull all the windows out if we don't reaffirm the loan. Has anyone had anything like this happen to them. These windows were all customed made for our openings so there is really little resale value if any to the creditor. Is he just bluffing?

[Calthius]

Does he have a relief from the automatic stay? If he is contacting you without a relief from the stay then he is in violation of the bankruptcy code.

[southernbelle]

Sounds like a bluff to me. If they are custom what are they going to do with them and is there some sort of city ordinance that would require them to spend money to replace those windows with something to cover the opening EVEN if they did want them. They can't just come and pull them out and leave a gaping hole there.

That sounds bogus to me. I've heard the same types of stories from folks on this forum in their dealings with Best Buy and furniture companies that threaten to reposses their stuff but try that as a scare tactic to get them to pay a loan that was discharged/included in BK when it was obvious they were under no obligation to pay and the company had no interest what so ever in the item. My thought is they will realize they don't have a sucker, get bored and go away.

[StartingOver08]

The contractor can NOT remove the windows. His remedy is to file a lien and he is long past the timeframe for filing a lien if he has not done so already.

If for some insane reason he attempts to remove the windows you have him breaking, at a miniumum, the automatic stay. He would have to replace the windows and pay huge sanctions to the court. Of course, you would need to bring this to the attention of your attorney and file a motion for santions.

Sounds like a frustrated contractor that is spouting off to scare you. You filed BK. Once you are discharged, so is this debt. Did he place a lien on your house when the windows were installed? That could be a complication for you if he did because liens survive bankruptcy. Check the liens on your home just to make sure his is not recorded. Even if he has a lien, it may not be valid. In our area there are specific rules regarding the filing of a NOC (Notice of Commencement) and timeframe in which to properly file the lien. If the rules are not followed, the lien can be vacated.

[OhioFiler]

Of course he's full of poop. His lien, if it exists at all, would be on the residence not the windows.

If he were to step on your property and touch one of the windows with a tool you would call 911 and let the police know someone was attempting to break into your home.

Call his bluff, what an assclown.

[bknconfused]

Thank you for your replys. The only issue here is that this loan was through the Window company who did the installation as well. The financing was thorugh AIG who the Window company used. AIG is the ones threating to remove the windows. They do not have a lien on the home. They claimed the debt was secured by the windows themselves. They have contacted my attorney, not me personally. My attorney says the court will view the loan as secured and that AIG would have a legal right to come and remove their property. I just can't imagine that they would do it.

[OhioFiler]

Nonsense. At best, they will be able to remove the windows so long as they replace them with the ones they removed and put them back in the exact condition they found them. Of course your old windows have been destroyed by now.

AIG will not be removing your windows. Without a lien there is nothing they can do.

[StartingOver08]

I can't imagine any judge giving a court order to remove your windows! Does your attorney understand that the windows are installed and are now a fixture? That makes a material difference in what the creditor is allowed to do for recovery.

What did your attorney say about solving this issue? He must have provided some sort of solution and a fee to go along with it. I would call the bluff of the window company - no judge is going to allow the windows to be taken and holes left in their place. Not happening.

[MSbklawyer]

This creditor will probably be treated as unsecured. In most states, when an item is attached to real property -- in your case, the windows being attached to your house -- the attached item is considered by the law to be a "fixture". In essence, it loses it's individual identity and becomes a part of the real property, i.e. your house. In order to have a perfected security interest on these windows, your creditor would have had to file what is commonly referred to as a "fixture filing" -- usually with the Secretary of State's office and/or the Clerk of Court in your county or Parish. It's rarely done, so most likely this creditor's lien, if he has one, can be avoided in bankruptcy.

And earlier posters are right -- he has violated the stay. Advise your lawyer of his collection efforts.

[aljohnson007]

A contractor performing work on your house/property can file a mechanics lien if not paid for the work but to collect, would need to go to court or wait until the property is sold. It seems to me the contractor has been paid and is out of the picture. AIG, in my opinion, has no case and there is just no way they can remove the windows.

[frogger]

That's what he needs to try and do. Start removing and/or breaking a window. Sounds like a great way to get shot! The above posters are right on track with their advice.

[pookieny]

That is the most ridiculous creditor threat I've ever heard, short of you go to jail if you don't pay your bill.

ignore!

AIG is a big company, who are they going to send to remove them, hit men?

[Mi Bankruptcy]

The OP said AIG contacted their attorney not them personally. How is that violating the automatic stay?

[phoenixrisin]

We had the same issue. We built an addition 2 years ago. The contractor filed a UCC-1 Financing Statement with our county. And- it's secured by the roof! He filed it and then passed on all rights to it when he turned over the contract to the financing company. He got paid, and the financing co has not been fully paid. We filed Ch7 calling them "unsecured" as that was what we were told when we got the loan.

This is a very gray area in BK law. My laywer was really stumped. I did alot of researching online. I don't know why contractors use these UCC-1's as they are not meant for home improvements. It can cover the materials- but once it's installed on your house it's either a fixture- or real property- which falls under real estate law.

What we figured out is that this UCC-1 is not a lien in and of itself. They are used to tell other creditors that they have a priority claim. A lien then HAS to be filed as the "vehicle" (way) to protect their security interest. Our financing company apparently never did this- leaving it in a no-mans-land, basically. Since they didn't file a lien prior to BK, they can never get one- and they have been discharged!

In fact, it probably IS a secured loan (even thought they failed to secure it), so the lawyer said the options were to reaffirm, return the property or do a immediate payoff. Our opinion is- they are discharged, and let them come and try and take the roof! Basically the only other option to them now might be to sue us- but I don't know for what at this point.

All this is just my personal experience and web research- and one BK lawyer who responded to a question I had online, so it's true only to the best of my knowledge

[LSUTiger32]

Once a contractor installs something or does work on your home it because part of your home as mentioned. Their relief is a lien which they didn't do. Tell him if they even so much as park in front of your house, you will have the police there so fast that their heads will spin.