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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2820
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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Hi, I lent a (possibly former) friend $25K to try to save

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Hi,

I lent a (possibly former) friend $25K to try to save his house. We had a lawyer draw up the papers, with collateral of two commercial tanning beds. He paid according to the schedule until he owed $18K but then his tanning business fell on hard times. He has not made a payment in over two years. He confusingly said that the collateral is “gone” last time we spoke (transferred I think he mentioned. ) He has now filed for bankruptcy and included me as one of his creditors. I understand I am not allowed to contact him about collecting in any way, because of the filing, but how can I attempt to collect or at least find out what happened to the collateral, if I can’t contact him? It seems like he needs to be reminded of what the meaning of the word "collateral" is.

Thanks!
Rob

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

You are a secured creditor.

Terry L. :

Did you file a lien against the collateral, recording it with the county?

Terry L. :

This is called perfecting the lien.

Terry L. :

If not, you have several options.

Terry L. :

You can send his attorney a reaffirmation agreement, to let the debt survive bankruptcy.

Terry L. :

You would also send the coversheet too.

Terry L. :

If the debtor reaffirms the debt, you should file these with the court

Terry L. :

then you can collect on the debt again, since it survives bankruptcy.

Terry L. :

You can contact the debtor's attorney and ask about the whereabouts of the tanning beds too. IF the debtor does not have them, you can possibly file an adversary objection since he transferred or sold secured property.

Terry L. :

I would advise you to contact a bankruptcy or collection attorney to help you, since there are time limits for you to act here.

Terry L. :

The adversary, if successful, would except the debt to you from discharge, allowing you to still collect.

Terry L. :

Let me know if you have any further questions.

Terry L. :

You are correct, you cannot contact the debtor or send him a letter etc because of the bankruptcy protection.

Terry L. :

You can contact his attorney though.

Customer:

OK I see, I don't have the bankruptcy notice w

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