my question is. is this tractor secured? in a chapter 7 is the note technically unsecured and not affirmable?
Very interesting question.
The question involves Article 9 of the Uniform Commercial Code. More specifically, how is a security interest in property perfected?
The small tractor is treated like any other personal property that is allegedly secured, such as a refrigerator, if you will.
The perfection of the security instrument occurs upon sale and you taking possession of the item.
So, the seller is not required to file a UCC in the County clerk’s office or in Albany.
If it is considered a consumer transaction no UCC filing is necessary, The exception would be if the tractor were a titled vehicle. This type of security interest is referred to as a "PMSI" or purchase money security interest .
The answer above is for general information purposes only. You should talk to an attorney to determine your specific legal rights.
I agree with my colleagues, but I want to add something to what they've said. If you bought the tractor for personal, family or household purposes (which would be typical for a lawn or garden tractor), it is considered "consumer goods" under Article 9. A purchase money security interest (PMSI) in consumer goods is perfected as soon as you sign the security agreement, and no filing is necessary. The reason you care is that your bankruptcy trustee will not be able to avoid the seller's security interest, which means you need only worry about exempting the equity over and above the amount owed on the loan -- and that is likely negative or very small.
Reaffirmation pertains to ANY kind of debt, not just secured debts. If there is what we call an "ipso facto" clause in the installment sales agreement that declares bankruptcy to be an event of default, you will need to ask a NY bankruptcy lawyer whether that clause is enforceable if you keep up the payments. In Massachusetts, it would not be, but laws differ from state to state. If there is no such clause, or if it's not enforceable, many lawyers would recommend against reaffirming the debt. That way, if you ever do default and the lender repossesses the collateral, you would now owe for the deficiency.
Years licensed, work experience, educationLegal community recognition
Peer endorsements, associations, awardsLegal thought leadership
Publications, speaking engagementsDiscipline