Question Personal Loans and BK

[mom2three]

Hi, newbie here. Been surfing through some pages not quite sure of the lay of the land yet.
I've hit the breaking point financially and have come to the conclusion I need to file BK.
I'll be filing Chapter 13 to protect some assests and am trying to locate a good attorney. Making the call has been the difficult part.
I am still paying on my unsecure cards/loans mainly out of obligation, I took their money I need to repay.
I haven't done much research yet on this part, but how are Unsecured Personal Loans handled.
I have 3, and they are the majority of my unsecured debt. Two are with American General and one Beneficial (HBSC). I am so far under with the Beneficial I will never get out. I just was charged a yearly fee of 50 dollars to have the account and in 1 year I paid down the principle to the tune of 50 dollars. How are these handled in a Bk, they are unsecure loans but they asked for collateral when I applied? The AG loans are over 4 years old, the beneficial is newer over a year, but newer and 10,000 dollars. Mind you I paid in over 3000 dollars already but the loan only reduced 50 dollars because the interest is so high and it is revolving.
Any one with experience with these guys? Will they sue if I stop paying. They both are direct pay from my checking account. I called AG to start paying by check rather then auto pay, but Beneficial gave me a hard time when I called and asked about it saying that it could take up to 2 months to stop the auto payment from being withdrawn. I want to get moving on filing, even it is just to retain a lawyer so I can get my finances in order to file.
Any experience any one has had with these creditors, or advice is more than greatly appreciated. I hope to one day be clear of this burden.

[AngelinaCat]

Hi mom2three:

Welcome to the forum. My DH, who posts under the handle 'AngelinaCatHub' have experience with American General. We don't with the other agency.

You need to stop the autodraft NOW. If you haven't started it up yet with the other one because of them giving you a hard time, forget about that and let it lie. Otherwise your account could be sucked dry.

Our experience with AG is this: We took out a small loan of around $5K trying to pay bills and pay catch-up. The collateral were two older cars, a 92 Oldmobile, and a 93 Cadillac DeVille. They would not give us the loan with just one of the cars. We began paying the loan back. Then about 6 months after that, they took out their own auto insurance on one of the cars--not both--just one, and added this new high charge onto what we owed them. Now, we carried our own auto insurance on those cars as we drove them. This extra insurance was an added expense and NOT part of the original agreement. We started falling behind in the payments. We tried working with them, but they would not work with us, nor kill this added insurance.

Then, while 'Hub was driving the Olds one day, it started running rough and back-fiing. He managed to coax it home whereupon it burst into flames in the driveway. 'Hub put the fire out with a garden hose. This was duly reported to AG so they could file a claim on their insurance. "So sorry", said they, "The insurance is on the OTHER car, you have to pay!" At that point, we were so disgusted we stopped paying altogether and by this time had retained an attorney to begin planning for a 13.

Then, several months after that, the Caddy broke down--it had had a history of break-downs anyway when we bought it, and according to the estimate it would cost at least 1K to fix the thing temporarily--and it would not hold, nor could the mechanic say how long the temp fix would hold. So 'Hub gave it to the mechanic for the price of the estimate. Again this was duly reported to AG. Nope, not interested again in trying to work anything out.

So, AG initiated a lawsuit against us, and we filed for C7--I had lost my FT job by then and we had no choice but to go 7. So AG's lawsuit was stopped in its tracks, but they weren't through yet.

They tried to trick us into signing re-affirmation papers by sending the already-filled-out-forms-sans signitures to our Trustee for our 341! The Trustee handed them to us and told us we needed to take them to our attorney--AG had by-passed her. We took them home and shredded them after telling the attorney about this little stunt.

So, just be aware. This is why I suggest stopping the autodrafts.

There is another thread on here about people using their laptops as collateral for loans with AG. I will try to locate it and post it in your thread so you can read it.

Good luck to you.

[justbroke]

I haven't done much research yet on this part, but how are Unsecured Personal Loans handled.
I have 3, and they are the majority of my unsecured debt. Two are with American General and one Beneficial (HBSC). I am so far under with the Beneficial I will never get out. [snip] How are these handled in a Bk, they are unsecure loans but they asked for collateral when I applied?

First, If you pledged collateral, then they are secured!!! This is a big misconception by folks. American General, Beneficial, and the likes of CitiFinancial, pray upon consumers by loaning them money against pledged household goods, computers, cars, etc.

If American General and Beneficial did it right in your area, they then filed a UCC-1 or other financing statement with your State and now have a lien against your property.

The AG loans are over 4 years old, the beneficial is newer over a year, but newer and 10,000 dollars. Mind you I paid in over 3000 dollars already but the loan only reduced 50 dollars because the interest is so high and it is revolving.

Revolving on a collateral based loan... wow... those guys are incredible! But, that's neither here nor there. The key is that they may have a security interest in your property! Do you have the original financing agreement? if so, see if it reads "Security Agreement" on the top. And if it does, look for the spot where it states something like "I give you a security interest in the property described below". If it does, that's a secured loan against your property.

But, don't fret! Any half-way decent bankruptcy lawyer can get those liens "avoided" (have them removed against your property).

Any one with experience with these guys? Will they sue if I stop paying.

Many of these will come after you as they are really "local" offices and are done that way so that they can easily harass you. Having wrote that, it takes times to get a lawsuit into court. They have to wait some period to deem it as noncollectable. They'll go to court to get a judgment so that they can come and repossess the property that you pledged. But still, don't worry. I haven't paid mine in over a year before I filed for my Bankruptcy.

They both are direct pay from my checking account. I called AG to start paying by check rather then auto pay, but Beneficial gave me a hard time when I called and asked about it saying that it could take up to 2 months to stop the auto payment from being withdrawn.

They shouldn't be doing that. They need to stop immediately. Have you told them to stop? You could always get a new bank or a new checking account at the current bank and move everything to the new account. Call them today/tomorrow and tell both to STOP. Make sure you get the name of the person and write all that down (date and time). Just for your records.

If you're going to be filing soon, then bankruptcy "planning" is what you should be doing now. Consult an attorney or two. Stop paying Beneficial and American General... it's wasted money at this point.

[AngelinaCatHub]

"Justbroke" 100%! American General is noted as 'shady'. Look into your County Public records for the UUC if you do not find it amoung your own paperwork. What would you have pledged?

I somehow feel a 7 would be better for you. What big asset do you wish to protect? The 13 or the 7 will do the same to your credit so why not go all the way and get a new start?

[BKParalegal]

In regards to any signature loan that was secured by personal property, your attorney should/would file a Motion to Void Lien under 11 USC 522(f)(1)(A), this voids liens that are secured using property that is exempt in bankruptcy. This will render your signature loans unsecured and therefore dischargeable in bankruptcy.

Good Luck

[AngelinaCat]

Here is the other American General thread:

http://www.bkforum.com/showthread.php?t=27766

[mom2three]

Not knwing much about the chapters, from what I read I would file 13 due to being over median and also protecting equity. I also recently bought a car, which from reading the board today seems like it may have been one of my smarter financial decisions. I have a reasonable car payment and I want to be able to keep the car.
I could not find anything on my Beneficial loan papers where it talks or lists collateral. For AG there is a section for personal property security, and there is where they listed things I have in the home, stereo, fish aquarium, TV, computer.
I remember Beneficial doing the approval over the phone asking the same sorts of questions, do you own a TV, Camera, etc., what do you value your personal property at...
I am worried because the Beneficial loan is 10,000 dollars and I have yet to pay down 100 dollars, but already sunk approx. 3000 in it. I am sure they will be objecting to my claim. I have nothing to show for the 10,000 dollars. It was going to be used to pay down the rest of the debt I had and all it got me was 10,000 in the hole deeper. Am I looking at them claiming fraud since it is only 1 year that I had the loan?
My local branch is less than 5 minutes from my house. If I were to retain a lawyer after consulting a couple this week, could that stop them from at least harrassing me for payment if I stop paying. My Beneficial is due next week and I pay close to 250 a month minimum.
I will call tomorrow and have the auto pay for both stopped. Just like other posters I have read their stories, I really thought I could get myself back in control and get out of debt on my own.