When one is forced to seek bankruptcy protection because of a staggering debt load, a common question that is asked is what exactly happens to the items purchased on credit cards. Most people envision that the bankruptcy trustees will come to your house and take all of the items you have purchased on credit and then sell them to recoup the funds that are owed.
This is not quite the case. In most cases the items you purchase will be yours and there will be no way for the creditor to seize the item or seek compensation if the debtor seeks protection. However, there are cases where the credit card has a security agreement that basically says that the items purchased are not fully owned by the card holder until full payment has been made and the item can be seized and sold like a secured debt item. For the most part the major card companies do not have security agreements attached to them, but many of the cards issued by a department store chains do in fact have security agreements attached to them. That is the bad news.
The good news is that only in very rare cases will the company even attempt to repossess the item for resale and usually it is only for major purchases like appliances and the like. Most items will simply require a “reaffirming” where the debtor agrees to pay the renegotiated amount, usually at a lower interest rate or reduced amount. Contact a qualified bankruptcy attorney in Ohio to get the advice you need to move forward and understand exactly what you are on the hook for.