You cannot protect it by claiming it as exempt since it was put up as collateral for the loan. But, there may be some other things you can do.
Before I answer, I have to cover a few details regarding liens:
There are basically two types of liens a creditor can have on furniture: a purchase money security interest, which everyone calls a PMSI, and a non-purchase money security interest, which everyone calls a non-PMSI.
A PMSI is a lien where the creditor gave the borrower the money to buy the item which is the collateral (example: you walk in to a furniture store and tell them you want to buy a table, so they sell you the table on credit).
A non-PMSI is where the borrower already owned the collateral, then put it up as security for a loan (example: you need money, so you take your kitchen table down to the local bank and ask them if they will loan you money and use your kitchen table as collateral).
Bankruptcy law treats PMSI's and non-PMSI's differently.
If the loan was a non-PMSI, and the table has not yet been repossessed, then you can file a Motion to Avoid Household Lien in the bankruptcy case, and assuming the motion is granted, the creditor's lien will be removed and your ex-wife can keep the table. This is pursuant to 11 U.S.C. 522(f)(1)(B), HERE
However, PMSI loans CANNOT be wiped out by motion. However, you do have the right to redeem PMSI-secured property pursuant to 11 U.S.C. 722, HERE
. This means as long as the collateral is used for household purposes by the debtor (you) or a dependent of the debtor (your daughter who lives with your ex-wife), then you can file a Motion to Redeem with the court, which if granted, will prompt the court to order the secured creditor to accept a one-time lump sum payment equaling the full value of the collateral (not the amount owed), and then your ex-wife can keep the table for a one-time payment of $500 (assuming that is the value of the table). So, even if you owe $2,000 on the table, you can keep it if you can come up with $500 in the next 30 days or so assuming you file your motion before repossession and the court grants it. I know this is not ideal since you may not have $500 laying around, but it is all I know about. You can also expect the secured creditor to object to your motion and try to convince the court that the table is worth more like $1,200, so you are ordered to pay $1,200 to keep it rather than $500 (and I am just using your estimates here). So, it comes down to what you can convince the judge the table is worth as to what you have to pay to keep it.
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