Legal Question in Bankruptcy in California

Best guess is they should have filed a claim for the goods while your BK case was open, and they are now violating the discharge injunction, and you have a free lawsuit against them in BK court for punitive damages.

Unless you bought jewelery etc and there is a UCC 1 recorded against the jewelery or were in a rent to own agreement were the goods are secured. The household goods were part of your bankruptcy and should be protected. It seems like a specious claim from your creditors. You bk atty should write them a letter to back off immediately. Moreover, I agree with Mr. Stone, this is a claim which is usually asserted as soon as the creditor gets notice of the bk and should have been resolved through the bk court of there was any merit to the claims.

I respectfully disagree with the opinions of the other two attorneys. Secured debts ride through Chapter 7 bankruptcy which means that secured debts are not discharged in Chapter 7. Also, you cannot exempt property subject to a lien. You can only exempt what you own and not the portion still owed.

Best Buy has a clause in their purchase invoice that says that they have a security interest (a lien) in the merchandise. That is why they claim that they have a purchase money security interest in the merchandise that you bought from them. If the lien is valid then technically Best Buy has the right to get it back (assuming they really want it back!) They did not have to file a claim in the Chapter 7 case to protect their rights.

One argument is that the lien is not valid because it was not clearly set forth in the purchase invoice, etc. However, what can Best Buy do to get the merchandise back?. They need to go to a Calif. Court to come inside your house and remove it or get an order forcing you to deliver the merchandise. That takes time and is expensive and there are legal arguments that could preclude them from being successful so it is extremely unlikely that they take that route.

What they really want is money from you. So, you can contact them and agree to pay them something (its present value or even less) or just ignore them and take the risk that they will not take any action. The value of the merchandise should determine the best course of action. If you had a Chapter 7 bankruptcy attorney then he or she should have explained all this to you. There is no violation of the discharge since the discharge in Chapter 7 does not discharge secured debts (unless you can successfully argue that the lien was not valid and the debt actually was unsecured in which case you will still not be awarded anything by the Court for the technical violation).

I would just call Bass and Associates and ask them to take half of what you can sell the property at the flea market and they will probably grab the money and run. Alternatively, you can ignore them and see what will happen. Consult with your bankruptcy attorney on the best thing to do in this case. That was one of the reasons he was paid by you to handle the case. Good luck.....

Actually, secured debts ARE discharged in your bankruptcy; but the lien held by the lender remains. Yes, they would have a right to repossess the collateral ... but they will not. I think you'll find that if you just put that letter in your circular file, that will be the end of it.