Repossession prior to possible bankruptcy

November 26th, 2007 by Questions

I`am a sole propreitor and my business is passing through a tough period. I`am over 6 months past due on most of my credit cards and lines of credit. If I don`t get an order by mid-January 2008 I`ll have to declare bankruptcy.

The problem that I have is that I have signed my plant equipment as collateral for a line of credit. The contract is vague , doesn`t mention equipment serial numbers/VINs and no lien has been registered against the equipment. The creditor is now threatening to seize the equipment. He is playing hardball and doesn`t want to negotiate.

Is the creditor a secured creditor in the legal sense? If I declare bankruptcy now , can I protect the equipment from seizure? The equipment is over five years old and probably will fetch about 10,000 dollars at an auction. I can arrange to have that amount paid to the trustee. (The replacement cost of new equipment is over 100,000 dollars)

Questions

One Response to “Repossession prior to possible bankruptcy”



November 27, 2007 at 9:59 am, A licensed trustee said:

You need to speak to a lawyer or trustee in person – someone needs to hve a look at your lending agreement and the terms associated with your security.

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