Creditor is demanding a ring back after discharge

[daiseylady]

We were discharged 3/17 and case was closed. Jareds Jewelry never sent us anything to reaffirm and never showed to the 341 meeting. Today, they sent me a notice demanding that I return the ring I bought on a Jareds cc. The ring is worth 1000.00. Can they do this after the discharge? I thought they had a time limit on when they could protest????

[mercedesc350]

I had a similar situation with a different jewelry chain. I had bought several items on their credit plan over a 4 year period; the initial purchase was my wife's wedding ring for about $1300. At the time I filed in Oct '08 there was a balance of about $700 on the account, after a wristwatch purchase about a year prior. They would call me hourly if my $70/month payment was 1 day late. Though they were not my only credit, they did add to my frustration over the whole debtload I had when they started calling family and work if they didn't hear from me within 1 day. Anyway...when I filed the lady that did their "collections" was seemingly not even aware of what bankruptcy filing entailed. She kept calling me every day after I gave her the case number. They didn't stop until my atty called them and explained "how this works." Then AFTER the 341, they called my atty's office and insisted that they had a secured claim. The paralegal tried to establish a value of the watch I'd last bought on the account. The creditor insisted that the whole $700 amount was secured by all the previous items I had purchased on the account over 4 years. To shorten this up a bit: my atty told them to "file the appropriate paperwork." They didn't seem to know what to do, so they did nothing. Then after my discharge in Jan '09, they sent me a letter asking for ALL the jewelry items back or a payment of my balance! I took the letter to my atty's office...that was over a year ago now and I've never heard anything else...so I assume they were told to take a leap. Now I guess your case could be different if Jared's had in fact ever actually filed something; but I would think that you would have been aware of that during the case proceedings.

[SMinGA]

The discharge means you do not owe the debt, but it does not void a security interest. I think the question is if there was indeed a valid security interest. If so, they can ask for the ring back. But you can also require they take legal steps to take it back. I don't recall the exact term, but something about replevin or something similar.

[wanabath]

Correct me if I am wrong but credit cards are unsecured debt therefore there they have no security interest. They have no claim.

[mama2three]

Correct me if I am wrong but credit cards are unsecured debt therefore there they have no security interest. They have no claim.

Some credit cards such as Best Buy, Dell, some jewelry stores, etc put in a clause making the items you purchase secured. Therefore after a BK you don't owe them money but they can come after the items

[BCA2009]

While it may be secured debt. I would ignore them and force them to go thru the court system to get the ring back. They can't come get it and they can't physically force to you to give it back to them.

They will either have to spend more than the ring is worth to sue you, or they can forget about it. Either way I wouldn't make it easy on them.

[montana59451]

Just tell them you don't have it anymore. Waht can they do?

[catleg]

There is a fairly famous bankruptcy law case involving a rent-to-own furniture store's practice of claiming a security interest on every piece of furniture bought on the credit account, each new piece being added regardless of prior pieces being paid off, I can't remember the details, but the court ruled against this practice, you'd have a pretty strong defense and your lawyer would get his fees paid if they were to push it.

As I understand it, "purchase money security interest" only applies to merchandise where the loan is extended by the merchant themselves. When the situation is like most stores nowadays, like Sears (Citibank), Kohls (Chase), Home Depot (Citibank), Dell (CIT), and the credit takes the form of third party financing, then no purchase money security interest is created.

In my CH13 case all of the above creditors filed claims as unsecured creditors.