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Chapter 7 Bankruptcy, discharged.

Bremerton, WA |

I Filed bankruptcy and it has been discharged, however I just received a letter from a lawyer stating that best buy credit card (HSBC) is a security trust account and that they can place a lien...Can they do this? They told me they are trying to collect on a lien.

Attorney Answers 1


What this creditor did may have been a violation of the order of discharge. Once a debt is discharged, it against federal law for a creditor to try to do anything to collect it.

It is possible that when you purchased the item from Best Buy, you gave them a security interest in the item. If that is the case, then they tecnically are allowed to repossess the item as collateral. But under no circumstances can they ever try to collect money from you.

Also, if they do not already have a lien on this item, the order of discharge prevents them now from placing a lien on it.

In order for the lender to repossess the consumer electronics item, they would have to bring a special law suit against you, called an action for replevin, and once they receive a judgment, they would then have to have the local law enforcement officer, like a marshall or sheriff, obtain possession of it. And they can never get any further money from you.

In your case you are almost assured that they will never repossess the item because no lender in their right mind would invest thousands of dollars to bring such an action when the value of a used piece of consumer electronics would be minimal.

Bankruptcy case law provides that a debtor may collect costs, reasonable attorneys fees, sanctions, punitive
damages, and compensatory damages against creditors and their attorneys who violate the order of discharge.

Please click the link below to read an article that appeared in the Suffolk Lawyer (periodical for Long Island bankruptcy attorneys) about going after creditors who violate the order of discharge.

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