Expert: Mark J. Markus- California Bankruptcy Attorney - 4/22/2004

Question
Our bankruptcy was discharged in July 2003. One of our debts was secured and was for a piece of furniture purchased in the spring of 2000.  Now nine months after our bankruptcy was discharged the creditor contacts us (by a phone call to my husband's employer)to state that they want to pick up the item.  What happens when I tell them we no longer have it in our possession?  It had been nearly four years since we had obtained the item and it no longer suited our needs so we sold it to an acquaintance who now lives on the east coast.  The creditor states we owe approximately $1000 for the item. We had expected to be contacted long before now (we thought they would contact us prior to the bankruptcy being discharged) so this was a complete shock this week to get the telephone call.  Can we ask that they not contact my husband at work again? Do we have any options at this point?

Answer
Well, there is no definite answer to your question.  Technically, if the creditor really wanted to spend its resources, it could make your life very difficult, although usually this doesn't happen.  You sold an item that was secured without authorization.  On the other hand, the debt to them was (I assume) discharged in your bankruptcy case, so the only thing they are entitled to is the collateral, which you no longer have.  I suppose they could theoretically try to recover it from whoever you sold it to, but as a practical matter, they won't.  If you did not sign a reaffirmation agreement during your bankruptcy case, then they cannot force you to pay any money without a court order.  Honestly, without researching this further I can't really advise you on what to do.  I would start by reminding them that the debt was discharged in your bankruptcy case, provide them a copy of the discharge order, and then give them the name and last known address of whoever you sold it to.  If they continue to try to collect from you, you may have to file a motion in the bankruptcy court seeking contempt against them.