Can anyone tell me...

[tyson24]

What is the problem with having a loan on an exempt item in a Chapter 7? It's my wedding ring.

[tyson24]

Oh yeah, it is in jewelry pawn since April of this year.

[chrisdfw]

That isn't a problem, but will have to pay the loan to get the ring back. I don't think it will cause any problems, except you will need to
get the money to get it back which may or may not be easy.

I'm not an attorney. There is an article on bankruptcy law network that addresses pawn loans.

http://www.*************************...-7-bankruptcy/

I think for simplicity sake you may be easier on you to get the merchandise back, since they are a creditor and
you will have to list them. They may sell your item... even though they aren't allowed to, at that point you might
have trouble getting it back and will have little recourse, since you did have their money.

[tyson24]

The ring should be exempt but I got a loan on it to pay our taxes in April. i was making payments but my attorney told me to stop.

I just don't get why a loan on an exempt item is an issue? That ring is a family heirloom.

[platter]

Tyson, if you stopped making payments, you won't ever get the ring back from the pawn, will you?

[despritfreya]

What is the ring worth? What is the allowed exemption?

If your attny said to stop paying is he worried that if you do pay you will create equity in the ring over the allowed exemption? If you stop paying, yes the creditor can "foreclose" but not until the Stay is lifted.

Des.

[abkguy]

If it's a loan then I would say that the pawnshop is a creditor holding a secured claim.

[DaisysMom]

Have you talked to the pawn shop owner about what is going on and your situation? Maybe regardless of the outcome and trustees decision...he will hold on to the item until the smoke clears and you can work something out to get it back at a later date. If it's a family heirloom...it may be worth a try. DM