Tuesday, September 13, 2016

Do I Have To Reaffirm The Debt On My TV Or Other Appliances?

All it takes is the click of the TV remote, or a quick online session where ads fly like banners across the top of your PC screen to know that when it comes to financing, there are many options and just about any type of product can be paid for over time. We all know that most people buy their cars or homes by taking out a loan and making monthly payments, but there is a growing portion of the population that finances things like TV’s, furniture, and some major appliances. Most furniture stores today have a financing department, and there are even specialty stores where you can buy furniture, a washer and dryer set, or a patio table on credit. When agreeing to this type of financial arrangement, the lender usually retains an interest in the items purchased, until they are paid in full. This is referred to as a security interest, and more specifically a purchase money interest because the money loaned was used to make the purchase. If you file bankruptcy, you might wonder whether you have to keep making these payments or risk having your television or couch repossessed and this can get tricky because this type of lending activity is further broken down into possessory and non-possessory liens.

Most of the items mentioned above fall into the non-possessory category, because the lender does not keep actual possession of the item during the loan repayment period. In order to avoid a lien in these items, and maintain possession of the property you have to show certain things. It can be an uphill battle, and don’t be surprised if you are asked to reaffirm the debt for these things. If you reaffirm, you will be expected to:

         Keep making the payments.

         If the loan is not paid off during your case, you will be required to keep paying even after the case is over because the reaffirmation agreement is like a new contract for the debt.

The upside to all of this is that it is uncommon for a lender with this type of collateral as security to push hard for a reaffirmation agreement to be signed, and they are less likely than other lenders to try and take back the property. Simply put, the value of most of this type of property depreciates so quickly that it is more cost effective for the creditor to write off the debt as a bankrupt debt than to try and repossess your dishwasher. But, if you have concerns about how this will actually play out in your case, contact our office to learn more.
For more information about reaffirmation agreements and what type of property is best suited for a reaffirmation, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.

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