Right to cure

[cmb2001]

I am filing pro se and my 341 meeting is April 3. My question is one of my creditors "Nebraska Furniture Mart" just sent me a letter wanting to reaffirm my account with them, they are stating that they have a purchase money security interest in the mechandise that I bought from them in 2007. If I am filing chap 7 doesnt that resolve me of owing them anything including giving them back the property that is 2 years old? If I dont reaffirm with them or give them back the property they will send a right to cure letter post discharge. Help please!

[HHM]

Technically, they have the right to repossess the property. The BK discharges your "personal obligation" to pay the debt, but the furniture store maintains their lien.

HOWEVER, as a practical matter, furniture lenders and the like, almost never retake the furniture; the steps they would have to go through to do so are usually too expensive. Thus, just ignore them. They are bluffing hoping you wont call them on it.

[justbroke]

As HHM already pointed out, they still hold the lien and a right to repossess the property. I like to just keep repeating, my new mantra, that liens survive bankruptcy (with few exceptions).

As already pointed out, a lot of what these "secured" creditors do, is all posturing. This is because the value of the furniture is surely less than what you paid for it. I would also guess that the cost of recovering the furniture approaches or exceeds the cost to write it off.

However, in the end, they do have a right to repossess the furniture. While I'm in a Chapter 13, I haven't had one of my creditors that had security interest in furniture (Rooms To Go), household goods (Lowe's, Home Depot), electronics (GE Money Bank), even file a secured claim. It's just not woth the effort unless the purchase was recent and the value is still there.

Still, you are taking a chance by calling their bluff. Be prepared to actually need to surrender the furniture should they call your bluff.

[cmb2001]

NFM is the only creditor that is coming after me like I owed them 20,000. I only owe them 800 but nevertheless they will probably be at my 342 meeting. If they are there will I need to surrender the property that day or will they give me a 30 day window?

[HHM]

They will need a court order to repossess the property so, no, you will not need to surrender it. Also, I am willing to bet they will NOT be at your 341 meeting.

[justbroke]

Yeah, for $800, it is not even worth their pursuing it. A motion for relief from the automatic stay, alone, would cost them no less than $350 just to prepare. This is one case where calling their bluff, will probably work.

You need do nothing at this point, and as already posted, they probably won't even show at the 341 Meeting of Creditors. It's just not a lot of money and they'd literally burn more money than it's worth in attempting to collect it.

Strange how the smallest dog (creditor) has the loudest bark. However, they have no bite.

[UhhhOhhh]

Yeah, for $800, it is not even worth their pursuing it. A motion for relief from the automatic stay, alone, would cost them no less than $350 just to prepare. This is one case where calling their bluff, will probably work.

You need do nothing at this point, and as already posted, they probably won't even show at the 341 Meeting of Creditors. It's just not a lot of money and they'd literally burn more money than it's worth in attempting to collect it.

Strange how the smallest dog (creditor) has the loudest bark. However, they have no bite.

Ok but keep in mind, the Trustee could make you pay for that secured interest in the furniture. Thats what mine has done - Dell filed something saying they had a $200 secured interest in my 4 year old computer so the Trustee said I had to send him $200 for that.

[HHM]

Ok but keep in mind, the Trustee could make you pay for that secured interest in the furniture. Thats what mine has done - Dell filed something saying they had a $200 secured interest in my 4 year old computer so the Trustee said I had to send him $200 for that.

What?? The trustee does not have authority to do so.

[cmb2001]

I had my 341 yesterday and Nfm didnt show up, nor did the trustee say anything about it. She just said that she was going to complete the report on my case and that I could leave. She did mention that she was a trustee but another trustee might contact me for more info, what is that about? Is that normal? That another trustee will contact me after the 341? Is it because I filed pro se is why another trustee will call. Also my creditor for my car loan, did show up which surprised me because I wasnt thinking about them and I am current on that bill.

The wanted to know if I had received reaffirmation paperwork from them and did I want to reaffirm. I told her that since my car isnt worth as much as the loan is for, that I would want to make a deal either lowering the amount I owe or something, she is going to talk to the bank about it and see what they can come up with. Right before you go on the record with the trustee there is a paper you have to read about bankruptcy, and right in that paper it states that you dont have to pay back a loan that has been discharged but you can if you want to and you dont have to sign a reaffirmation to do it, so if they dont want to make it worth my while to sign with a better deal then I will just keep paying to loan as is with no reaff paper. I think they are just counting on a pro se person to be so unknowledgable to read and understand the papers and forms. They just want you to sign the papers to keep you locked into the deal.

[cmb2001]

I have decided to surrender my house, it is about to go into foreclosure anyway. On my statement of intent, I said that I wanted to keep it but now I dont. The trustee told me that I would need to amend the state of intent form, what happens if I dont amend the form? Will that hold up getting my discharge? I am thinking that if I change my intention the trustee will see that as more income to pay the other creditors, any advice?

[justbroke]

I have decided to surrender my house, it is about to go into foreclosure anyway. On my statement of intent, I said that I wanted to keep it but now I dont. The trustee told me that I would need to amend the state of intent form, what happens if I dont amend the form? Will that hold up getting my discharge? I am thinking that if I change my intention the trustee will see that as more income to pay the other creditors, any advice?

Just amend the form. I don't think it technically matters, because you technically need to re-affirm the debt to keep it, it could cause some administrative headaches for you.

Pay the $26 and file the amended Statement of Intentions.

[justbroke]

Ok but keep in mind, the Trustee could make you pay for that secured interest in the furniture. Thats what mine has done - Dell filed something saying they had a $200 secured interest in my 4 year old computer so the Trustee said I had to send him $200 for that.

I never heard of such a thing. The Trustee may state that you owe the money, but the Trustee can't make you pay it. The way the creditor exercises his/her rights is to accelerate the loan terms and then to repossess the property.

Are you sure the Trustee said something similar to "you need to write a $200 check to Dell." Or, was it more like, "you owe Dell $200 and you would need to pay that in order to keep the property." Very different statements.

You could actually Redeem the Dell, and I would bet my socks that the Dell computer is worth $50.

[UhhhOhhh]

I never heard of such a thing. The Trustee may state that you owe the money, but the Trustee can't make you pay it. The way the creditor exercises his/her rights is to accelerate the loan terms and then to repossess the property.

Are you sure the Trustee said something similar to "you need to write a $200 check to Dell." Or, was it more like, "you owe Dell $200 and you would need to pay that in order to keep the property." Very different statements.

You could actually Redeem the Dell, and I would bet my socks that the Dell computer is worth $50.

well... maybe I got it confused? What the Trustee sent me was a demand for $200 for 'non allowable computer and media". I wondered about that as whatever I put on my exemptions page with my attorney, should have been allowed as everything was under the exemptions amount - but when I looked on pacer I noticed Dell had made a $200 secured claim - so thought THAT is what the demanded $200 was for.

[justbroke]

well... maybe I got it confused? What the Trustee sent me was a demand for $200 for 'non allowable computer and media". I wondered about that as whatever I put on my exemptions page with my attorney, should have been allowed as everything was under the exemptions amount - but when I looked on pacer I noticed Dell had made a $200 secured claim - so thought THAT is what the demanded $200 was for.

Strange indeed. Even more strange as you now word it.

If it was secured property that you were keeping and it wasn't exempt, then I can see the Trustee asking for $200 of value. However, it is still really strange, to say the least.

Would be nice to know exactly where the Trustee thinks the $200 is coming from.

[HHM]

well... maybe I got it confused? What the Trustee sent me was a demand for $200 for 'non allowable computer and media". I wondered about that as whatever I put on my exemptions page with my attorney, should have been allowed as everything was under the exemptions amount - but when I looked on pacer I noticed Dell had made a $200 secured claim - so thought THAT is what the demanded $200 was for.

I concur, something is not adding up. You said you had a lawyer, what was his/her take (hopefully you didn't use some cut rate lawyer).

First, it would be odd for the trustee to even demand an amount so small $200. I don't even really have a guess as to what it might be.