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Collateral on Debt

Hello,

I`m considering the bankruptcy option and have a question.
One of my debts is to a finance company which was secured with household goods (TV, computer, etc.)
These goods aren`t now worth what they were at the time of the loan. Does this matter? If I arrange for these items to be picked up, does that still clear the original `secured` value, so that this loan can then be discarged in bankruptcy?

Thanks!

Posted from: British Columbia

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One Response to “Collateral on Debt”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

Legally speaking the finance company has the right to pick up the secured property. Once they pick up that property it will be sold and the proceeds will be used to pay down the total balance of that loan. If the monies are insufficient to pay the debt in full then any shortfall you would be responsible for. However, once the security has been realized (i.e. picked up) then the debt is no longer considered secured and you can be released from this shortfall by filing a bankruptcy.