Will you describe a purchase money security considered in 11 USC 522(f)?

Does a purchase money security interest typically exist with a credit card or open-end credit plan when I use that line of credit to make a purchase? The "Terms and Conditions" of the open-end credit plan specifically state "We will not take any security interest to secure this Account." I see no reference to "security Interest" in the "Cardmember Agreement"

Nashville, TN -

Attorney Answers (3)

Dorothy G Bunce

Dorothy G Bunce

Bankruptcy Attorney - Las Vegas, NV
Answered

Purchase money security credit cards are generally store credit accounts, such as a furniture store, jewelry store, electronics store, tire store etc. where the seller has the right to repossess the merchandise if payment isn't made. If you want to study this topic in more depth, you should look for information pertaining to the UCC. Hope this perspective helps!

Kathryn Ursula Tokarska

Kathryn Ursula Tokarska

Bankruptcy Attorney - San Diego, CA
Answered

Purchase money security interest is when for example you buy a house and take out a loan to fund the purchase or buy a car with a loan. If you refinance a mortgage, then your loan is not a purchase money security interest or if you get a pink slip loan on a car that is also not a purchase money security interest. Credit cards are unsecured so there is no security interest, with the exception of some store cards like Best Buy or credit from Jeromes Furniture to buy furnishings.

I am not YOUR lawyer. You should not rely on answers to questions as legal advice. For legal advice you should... more
Marc Gregory Wagman

Marc Gregory Wagman

Bankruptcy Attorney - Chicago, IL
Answered

Not typical it would be a credit card from a furniture company or a Best Buy would be common examples. A Purchase money security interest is where the creditor takes a security interest in property you buy from them. A common example which is not an open ended agreement is a car loan.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The... more

Related Advice

Questions? An attorney can help.

Ask a Question
Free & anonymous.
Find a Lawyer
Free. No commitment.