Legal Question in Bankruptcy in California

I filed Chapter 7 bankruptcy per se on, I have been discharged, I received a letter from a debtor for my swimming pool which was included in the bankruptcy saying that my security interest in my property was not discharged. Can the debtor reposses the collateral or foreclose on my property

Asked on 1/03/13, 11:18 am

1 Answer from Attorneys

Carl Starrett Law Offices of Carl H. Starrett II

The answer really depends on the type of pool that you own and what type of lien you granted to the lender, if any.. As a general in California, a "fixture" is real property and conveys with the transfer of real estate and would require a specific type of lien. If this was an above-ground pool, the creditor might have a stronger argument.

Something becomes a "fixture" when it become permanently attached to the property. Even if you can easily remove it, the method used to attach it might make it a fixture. For example, ceiling lights, although attached by wires, can be removed, but the lights are a fixture. An in-ground pool, for example, is obviously permanently attached to the property and the creditor would have need a deed of trust against your property in order for the lien to even be enforceable, let alone survive the bankruptcy.

On the other hand, the above-ground pool might not be permanently attached and might be collateral that could be repossessed just like if you were not paying your car loan. In that case, the question is whether or not the lender has any type of valid loan agreement that creates a lien on the pool.

I recommend setting an appointment with a local bankruptcy attorney for a consultation. While I believe the creditor is bluffing, an attorney can tell you whether or not the lender has a valid lien. It is also possible that the lender is violating the bankruptcy discharge by demanding payment from you. If so, you might be entitle to recover damages from the creditor.

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Answered on 1/03/13, 3:29 pm

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