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I know someone who is in the process of declaring bankruptcy. The
question I have, is that the individual, a professional musician now
teaching in the local school district, ran up a credit card, with the
purchase of a rather expensive keyboard, a Kurzweil costting about
$5K.
They closed their checking account to avoid "garnishment" -
essentially skipping out on the debt. They have remained in the same
place of employment, so they can't claim they couldn't be found or
that they are not working. So, I am I correct in presuming, that one
of two things may happen to them in court:
1. They will have to sell/give up the keyboard
or
2. Have the bankruptcy thrown out.
My experience as a skip trcer tells me they are hosed.
Thanks.
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evaeldeva@yahoo.com (evaeldeva) wrote:
I know someone who is in the process of declaring bankruptcy.
The question I have, is that the individual, a professional
musician now teaching in the local school district, ran up a
credit card, with the purchase of a rather expensive keyboard, a
Kurzweil costting about $5K.
They closed their checking account to avoid "garnishment" -
essentially skipping out on the debt. They have remained in the
same place of employment, so they can't claim they couldn't be
found or that they are not working. So, I am I correct in
presuming, that one of two things may happen to them in court:
1. They will have to sell/give up the keyboard
or
2. Have the bankruptcy thrown out.
Not quite.
They can certainly file bankruptcy. The vendor can't get the
keyboard back unless he's got a security interest in it. Sears is
the only retailer that I know of that includes a security agreement
in its charge receipts.
The bankruptcy itself may not be thrown out, but the specific charge
might be declared undischargeable if the seller shows that the buyer
did not intend to pay for it when he bought it. But he will have to
file a petition for non-dischargeability within a fairly short time
after bankruptcy is filed, or he will lose the ability to do so.
Stu
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The
question I have, is that the individual, a professional musician now
teaching in the local school district, ran up a credit card, with the
purchase of a rather expensive keyboard, a Kurzweil costting about
$5K.
Well, sometimes a credit card issuer will claim that the credit card debt is
secured by the item purchased with it--- in this case, the synthesizer. But
such claims usually don't fly.
The synth is part of the bankruptcy estate. Different states have different
rules for how much property can be exempted (kept by the debtor.) In this
case, the keyboard could be considered a tool of the musician's trade. Usually
there are specific exemptions for tools of your trade, in addition to the
general exemption.
The most likely scenario is that "They will have to sell/give up the keyboard".
And the keyboard is valuable enough, the musician might even get to keep the
proceeds from selling it :-)
*****
Tim Horrigan <horrigan@aol.com>
*****
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On 2/1/04 14:10, in article hruavvc3bgd8tgh3ddv0k61cidlsggn9s1@4ax.com,
"evaeldeva" <evaeldeva@yahoo.com> wrote:
....
So, I am I correct in presuming, that one
of two things may happen to them in court:
1. They will have to sell/give up the keyboard
or
2. Have the bankruptcy thrown out.
No you are not correct in making presumptions. The answer depends on your
jurisdiction and on the circumstances, including the dates of everything,
and on the security, if any, held by the lender. Only a local bankruptcy
lawyer can properly advise your friend, although the Nolo Press book on
bankruptcy (nolo.com) may provide general guidance and the NCLC "Consumer
Bankruptcy Law and Practice" guide (intended for practicing lawyers) has
more extensive info on the law.
It's generally dumb to file bankruptcy to escape from only $5k in debts. I
assume the total owed is much more.
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In article <k33evvk1heb3on2imbpmv3jnm7cv6nup99@4ax.com> in
misc.legal.moderated, Stuart O. Bronstein wrote:
Sears is
the only retailer that I know of that includes a security agreement
in its charge receipts.
Does that have any legal force if you Visa or MasterCard something
at Sears?
--
If you e-mail me from a fake address, your fingers will drop off.
I am not a lawyer; this is not legal advice. When you read anything
legal on the net, always verify it on your own, in light of your
particular circumstances. You may also need to consult a lawyer.
Stan Brown, Oak Road Systems, Cortland County, New York, USA
http://OakRoadSystems.com
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Sears is
the only retailer that I know of that includes a security agreement
in its charge receipts.
Does that have any legal force if you Visa or MasterCard something
at Sears?
No. Only if you use your Sears card.
--
Brett
*****************************************************************
* Personal Injury/Malpractice Bankruptcy *
* *
* BRETT WEISS, P.C. *
* Attorneys at Law *
* Maryland, D.C. and Federal Bars *
* lawyer@erols.com *
* http://www.erols.com/lawyer *
* *
* Small Business Estates & Estate Planning *
*****************************************************************
The Small Print: This response is for discussion purposes only. It isn't
meant to be legal advice and you shouldn't treat it as such. If you want
legal advice, speak with a local lawyer familiar with your state's laws who
can review *all* of the facts and the law applicable to your situation.
*****************************************************************
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