Security interests in Credit Cards from Dept. Stores

As a Palm Springs and Riverside County Bankruptcy attorney I have been getting more and more calls from Weltman, Weinberg & Reis and other firms which claim they have a purchase money security interest in my clients items that we have listed to discharge on schedule F. Typically they are Best buy cards, K jewelers or other Dept. store cards where when you buy things they claim that their security is what you buy and therefore is not unsecured credit card debt. Usually I ignore them and they go away and if they don’t file a proof of claim or an objection to discharge then the items are my clients. They will typically give me an offer to knock down the price to 40% of what they owe and ask us to sign a reaffirmation agreement but many of these creditor attorneys are so busy and getting sloppy when I ask what my client bought that they are claiming a security interest in the creditors don’t even know so how can we return things that they don’t know what they are. Therefore I ignore them and so far they have yet to file an objection to discharge. One creditor was able to figure out that my client bought a fridge at Best buy and they claimed an interest in the fridge where as if this was a chase visa or bank of america card its unsecured debt and therefore no security, but being a best buy card they claimed it was their fridge or we could pay $200. It would cost a lot to get a truck out to my clients house to pick up a fridge and then they have to sell the fridge and according to my clients it was a crappy fridge and they didn’t care if they came and picked it up. Needless to say my clients got there discharge and the fridge is there. Don’t be intimidated and reaffirm debts that you can probably ignore and get discharged. Its consistently worked for me.

Frequently Asked Questions: Debt Consolidation in California
How does debt consolidation affect credit scores?

Initially, it might cause a slight dip due to credit inquiries. However, consistent payments can improve your credit score over time.

What is the difference between debt consolidation and debt settlement?

Debt consolidation involves taking a new loan to pay off debts, while debt settlement is negotiating to pay less than you owe. Settlement can negatively impact your credit score.

What are secured vs. unsecured debt consolidation loans?

Secured loans require collateral (like a house or car), usually with lower interest rates. Unsecured loans don't require collateral but typically have higher rates.

Is debt consolidation right for me?

It depends on your total debt, interest rates, credit score, and payment capability. It's suitable if you can pay off your debt within five years and secure a lower interest rate than your current debts.

Should I consider long-term financial planning?

Yes, debt consolidation should be part of a broader financial strategy including budgeting, cutting expenses, and building an emergency fund.

How do Chapter 7 and Chapter 13 bankruptcies in California differ?

Chapter 7 involves liquidating assets to pay off debts, while Chapter 13 allows debt restructuring over a set period, usually three to five years.

Can my spouse's bank account be garnished for my debt?

Bankruptcy laws offer protections against such actions, but specifics depend on individual cases and state laws.

How can I learn more about my options?

Consulting a California bankruptcy attorney can provide clarity. Firms like The Law Offices of Christopher Hewitt offer free consultations to explore debt relief paths.

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