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)