Is Furniture Secured Debt in Bankruptcy?
This is a great question to ask and it all depends on the contract that the creditor has you sign. If it is considered a credit card installment agreement then it is going to most likely be considered unsecured. If they don’t have anything in their agreement that states that they have a purchased money security interest, then it will be unsecured. If they have the magic words purchased money security interest, then they do have a secured claim. You just have to be careful and get the contracts from the creditor to read and verify what type of agreement the holder has.
What does this mean for you as a debtor? If you are in a Chapter 7 bankruptcy, then you will need to reaffirm the debt or give the items back. If you are in a Chapter 13 bankruptcy, then you would need to provide for them in your plan and the trustee will pay them along side with your other creditors.
If you are not sure what type of agreement you have, consult your attorney’s office before you do anything.
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