Author Topic: Scaring Away Repossessors  (Read 21811 times)

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TX Debt Atty

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Re: Scaring Away Repossessors
« Reply #15 on: July 16, 2008 03:31:03 PM »

Second, the creditor will need a "writ of replevin" signed by a Judge, which is almost never granted except when a creditor wishes to repossess a specific item that the creditor has a specific security interest in (as opposed to the blanket "if this box is checked, we have a security interest in everything you own or ever will own).


I do replevins every day, and I must respectfully disagree with the statement above, at least to the extent that one might read this in relation to the process in TX.

A blanket security interest, assuming that it is a valid security interest, is no different than a security interest in a specifically identified asset . . . either the creditor has a security interest, or they do not. Thanks to the UCC, as adopted in TX, true blanket security interests (all assets, all equipment, etc.) in consumer transactions are essentially unheard of. Assuming that your state's UCC is similar to TX's version, a true blanket security interest is not generally going to be an issue in consumer transactions.

However, I have seen numerous security agreements that provide for a security interest in "all consumer goods purchased with this account" and the like. This language is often found in open-end account agreements. In circumstances such as this, the creditor generally has the ability to obtain and review receipts, invoices, etc. to determine exactly what was purchased on the account, thereby making the creditor's job in replevying on the collateral much easier, as the creditor can specify in its oder what particular assets are to be seized.

I have dealt with this type of security interest en masse, and judges are not hesitant to enter an order allowing a creditor to replevy on such items. Accordingly, I believe that the statement above misrepresents the odds of a creditor obtaining a court order to allow it to seize its collateral. It happens every day, regardless of the equity in the collateral and regardless of the type of collateral.

PS - Sorry to raise this thread from the grave, but I just had to say so.
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Flyingifr

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Re: Scaring Away Repossessors
« Reply #16 on: July 16, 2008 04:26:47 PM »
Thanks for pointing out a part that I wrote that was unclear. The statement "(as opposed to the blanket "if this box is checked, we have a security interest in everything you own or ever will own)" is there as a contrast to the statement "a specific item that the creditor has a specific security interest in".

Writs of Replevin are granted on occasion for specific items that a creditor has a specific security interest in, and almost never for the blanket security interests. The granting of a Writ of Replevin would be a State-specific thing, and the procedures and odds of getting one will obviously vary from State to State. Replevin orders are almost impossible to get in New York. As TX Debt Atty states, they are easier to get in Texas.

This post was written as a general guide. As with all posts on DB, YMMV.
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TX Debt Atty

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Re: Scaring Away Repossessors
« Reply #17 on: July 16, 2008 04:44:59 PM »
I suspect that the infrequency of granting replevin orders on blanket security agreements in consumer transactions may be related to the specific requirements of the UCC, relating to the requirement of a heightened degree of specificty in the collateral description in such transactions.

When dealing with true blanket security agreements in commerical transactions, I have had constables go in and strip a corporate debtor's facility to the bare walls under such an agreement, and the judge never even blinked an eye at signing the order.

As Flying pointed out, this may vary widely from state to state. Anyone have any info on replevins in states other than TX and NY?


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Flyingifr

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Re: Scaring Away Repossessors
« Reply #18 on: July 16, 2008 04:56:43 PM »
When I was a collector in NY some 30+ years ago, the NY Legislature banned by law the enforcement of blanket security interests in CONSUMER transactions only. I believe the Federal Trade Commission followed suit shortly thereafter. Business transactions were unaffected.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

Founder of the Credit Terrorist Training Camp (Debtorboards)

TX Debt Atty

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Re: Scaring Away Repossessors
« Reply #19 on: July 16, 2008 05:09:12 PM »
Yeah, I think that true blanket security agreements in consumer transactions have been pretty much wiped out across the country.
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CleaningUp

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Re: Scaring Away Repossessors
« Reply #20 on: July 16, 2008 05:23:20 PM »
Doesn't this leave us back with what Flyingifr said in the first place? DB is, after all, a CONSUMER board, not a commercially oriented one.

Flyingifr

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Re: Scaring Away Repossessors
« Reply #21 on: July 16, 2008 07:15:00 PM »
No, because Tx Debt Atty was pointing out that Writs of Replevin on Consumer transactions are somewhat easier to obtain in Texas than in NY or other states on debts where a specific asset is the collateral instead of the blanket "everything you now own or ever will own".
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

Founder of the Credit Terrorist Training Camp (Debtorboards)

Rottweiler

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Re: Scaring Away Repossessors
« Reply #22 on: July 16, 2008 09:36:06 PM »
I do replevins every day, and I must respectfully disagree with the statement above, at least to the extent that one might read this in relation to the process in TX.

...I have seen numerous security agreements that provide for a security interest in "all consumer goods purchased with this account" and the like. This language is often found in open-end account agreements. In circumstances such as this, the creditor generally has the ability to obtain and review receipts, invoices, etc. to determine exactly what was purchased on the account, thereby making the creditor's job in replevying on the collateral much easier, as the creditor can specify in its oder what particular assets are to be seized.

In the case of a consumer good with such a security interest on it, the problem may well be...finding it.  The item could well be long gone, passed on to someone else and the consumer might not remember who it is if it still is usable at all (not junk long trashed at the local recycling center).

If the good is found?  Allowing the replevin in the case of such a transfer would also have the unconscionable result of taking the property who is not involved with the judgment in question (not the judgment debtor).  An example is a case where someone buys a gift using a credit line for which such a security interest is established in the contract.  The recipient almost certainly cannot be presumed to know of such a security interest. Unless the credit contract specifically prohibited use or possession of the good by other than the consumer obligated to pay for it until the debt is paid?  A replevin could create a really messy situation legally unless the creditor can establish the transfer was fraudulent to begin with, something that likely cannot be done.
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TX Debt Atty

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Re: Scaring Away Repossessors
« Reply #23 on: July 16, 2008 09:44:19 PM »
Rotty - Actually, if the recipient bought the item (assuming a consumer good) from the debtor and didn't have knowledge of the security interest, the recipient would take the item free and clear of the security interest. This rule has a quaint name, "The Garage Sale Rule."
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Rottweiler

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Re: Scaring Away Repossessors
« Reply #24 on: July 16, 2008 09:45:05 PM »
Thank you.  "Garage sale rule", eh?
“This is a court of law, young man, not a court of justice."
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