Legal Question in Credit and Debt Law in California

i have owned a cabinet shop for the last 10 yrs, and because of the economy, my partner and i were forced to file personal bk. we had a $150k line of credit that we got a few yrs before we filed ( when the economy was booming ) and part of the collateral for that line of credit was our machinery in our shop.. well that bank that we got the line of credit from, is now trying to repo all of our machinery. if they take our machinery, they will be taking away our lively hood. We are still in business (although downsized considerably) however i realize that i owe them money but i simply cannot afford to pay back that amount...is there some sort of law that says that they cannot repo something if it directly affects my lively hood? this will literally force me to close down my business because i cannot afford to go out and buy all new machinery again. this is a "community bank" that is going to put one of the local businesses in the community , out of business , any advise is much appreciated


Asked on 1/10/10, 1:24 am

1 Answer from Attorneys
Carl Starrett Law Offices of Carl H. Starrett II

Once the bankruptcy is over, the lender has the legal right to enforce its lien. You are off the hook for any deficiency, but you may have to return the equipment.

You should consult a local attorney about this. It is not unusual for creditors to have defective liens and a local business attorney might be able to better advise you.

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Answered on 1/17/10, 6:02 pm


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