I Have A Bankruptcy Question After Debtor Already Discharged
Q: I filed for bankruptcy in California (now living in Nevada), it was heard and discharged a couple of months ago. I have a secured creditor who has now sent me a letter asking what I plan to do with the merchandise, i.e., return it or pay for it. My question is, can they legally do this after the hearing has been done, the trustee has discharged the case, and I have the discharge papers?
A: If indeed the creditor has a secured claim, the security has survived the (Ch. 7 presumably) discharge. However, Sears has been in trouble lately for its claims of "security" in goods where the security interest was defective. (From this point of view a small amount of bluffing on your part should suss them out, since Sears knows whereof I write.) If the amount claimed by Sears is very much greater than the street value of the goods you may want to counter with an offer in compromise. Pay nothing until you have an acceptance in writing: an exchange of faxes, for instance. Of course if Sears calls your bluff you will have to give up the goods. They may be too Calvinist to accept any breach of principle, but I doubt it. Not sure what you mean about "discharge papers": that usually applies to military enlisted personnel. Assuming you mean documentary evidence of bankruptcy discharge, let me point out something: discharge in the US is the result of provisions of the Bankruptcy Code, federal law that applies to all 50 states and 6 (by my informal count) territories. Exemptions are a matter of state law (unless the state defaults or permits an option to federal exemptions). Exempt property remins exempt (in the USA at least: nobody has every litigated the question of whether it can be seized, say, in Canada after discharge) after the case is closed. Discharge does 2 things: it bars any lawsuit by any creditor in any court in the USA and it cancels any debt that is governed by the law of any US jurisdiction. It probably also bars a claim anywhere by any creditor who appeared in the US proceeding and filed proof of claim (not all jurists agree with that latter statement, but most do). Thus Sears could not sue you next year in Italy (assuming you moved there) because the debt is American; but if you also owed money to Harrods in London they could (if they did not file proof of claim in the American proceeding). That you are now in Nevada and not California probably will not help you (I am