How are "layaway" items treated in BK?
Posted: Fri Mar 25, 2016 1:49 pm
First, I am not sure exactly how this would play out particularly because a
lot has to do with the laws of the state you are in and the actual contract
entered into. The reason I say this is the contract might really be a
disguised sale. The details matter.
Generally speaking...
In a hypothetical world, say the ring is purchased for $10,000 and $5,000
has been paid on it. and that the cancellation fee is 20% or $2,000.
If TT cancels, the estate nets $3,000.
If TT assumes K and sells, maybe someone will pay $4,000 for a ring where
$5,000 has already been paid.
Say only $1,500 was paid on the ring. If cancellation fee is $2,000, then
TT will abandon property.
Sincerely,
*Michael Avanesian, Esq. *
Avanesian Law Firm
801 N. Brand Blvd., Suite #1130
Glendale, CA 91203
Tel: 818.276.2477 | Fax: 818.208.4550
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On Fri, Mar 25, 2016 at 12:40 PM, Holly Roark hollyroark22@gmail.com
[cdcbaa] wrote:
>
>
> Will a chapter 7 trustee assume the contract and collect the payments over
> time? Say there are $15k left of payments over 3 years and are not exempt,
> what is a chapter 7 trustee likely to do with this? Sell the contract? It
> appears to be unsecured though it purports to have a second lien on a
> mobile home. (Who wants to buy a second lien on a mobile home?)
>
>
> On Friday, March 25, 2016, Michael Avanesian michael@avanesianlaw.com
> [cdcbaa] wrote:
>
>>
>>
>> Yes, it's an executory contract.
>>
>>
>> Sincerely,
>>
>> *Michael Avanesian, Esq. *
>> Avanesian Law Firm
>> 801 N. Brand Blvd., Suite #1130
>> Glendale, CA 91203
>> Tel: 818.276.2477 | Fax: 818.208.4550
>>
>> *Confidentiality**: *This electronic transmission and its contents are
>> legally privileged and confidential information and intended solely for the
>> use of the addressee. If the reader of this message is not the intended
>> recipient, you are hereby notified that any dissemination, distribution,
>> copying or other use of this message and its contents is strictly
>> prohibited. If you have received this transmission in error, please reply
>> to us immediately and delete this message from your directory.
>>
>> *IRS Circular 230 Disclosure:* To ensure compliance with requirements
>> imposed by the IRS, please be advised that any U.S. federal tax advice
>> contained in this communication (including any attachments) is not intended
>> or written to be used or relied upon, and cannot be used or relied upon,
>> for the purpose of (i) avoiding penalties under the Internal Revenue Code,
>> or (ii) promoting, marketing or recommending to another party any
>> transaction or matter addressed herein.
>>
>>
>> On Thu, Mar 24, 2016 at 6:02 PM, Holly Roark hollyroark22@gmail.com
>> [cdcbaa] wrote:
>>
>>>
>>>
>>> Debtors are purchasing their wedding rings on layaway. They are each
>>> filing a separate chapter 7 prior to the marriage. Only a couple hundred
>>> bucks (1/10th of total price) has been paid on the rings so far. Is this an
>>> executory contract?
>>>
>>> This is a chapter 7, (Idaho jurisdiction.) Is there anything I need to
>>> be concerned about here?
>>>
>>> Assume we have no exemptions. Because that's how Idaho rolls. (The wild
>>> card is $800 and it only applies to "tangible" property. E.g., cash in
>>> accounts is not tangible, and I'm about to find out whether cash on hand is
>>> tangible property or an intangible negotiable instrument for purposes of
>>> the exemption.)
>>>
>>> --
>>> Holly Roark
>>> Certified Bankruptcy Specialist*
>>> *and Sports Lawyer*
>>> holly@roarklawoffices.com **primary email address**
>>> www.roarklawoffices.com
>>> *Central District of California & District of Idaho* - Consumer
>>> Bankruptcy Attorney
>>> 1875 Century Park East, Suite 600 Los Angeles, CA 90067
>>> T (310) 553-2600; F (310) 553-2601
>>>
>>> *By State Bar of California Board of Legal Specialization
>>>
>>>
>>>
>>>
>>>
>>>
>>> --
>>> Holly Roark
>>> Certified Bankruptcy Specialist*
>>> *and Sports Lawyer*
>>> holly@roarklawoffices.com **primary email address**
>>> www.roarklawoffices.com
>>> *Central District of California & District of Idaho* - Consumer
>>> Bankruptcy Attorney
>>> 1875 Century Park East, Suite 600 Los Angeles, CA 90067
>>> T (310) 553-2600; F (310) 553-2601
>>>
>>> *By State Bar of California Board of Legal Specialization
>>>
>>>
>>>
>>>
>>
>
> --
> Holly Roark
> Certified Bankruptcy Specialist*
> *and Sports Lawyer*
> holly@roarklawoffices.com **primary email address**
> www.roarklawoffices.com
> *Central District of California & District of Idaho* - Consumer
> Bankruptcy Attorney
> 1875 Century Park East, Suite 600 Los Angeles, CA 90067
> T (310) 553-2600; F (310) 553-2601
>
> *By State Bar of California Board of Legal Specialization
>
>
>
>
>
First, I am not sure exactly how this would play out particularly because a lot has to do with the laws of the state you are in and the actual contract entered into. The reason I say this is the contract might really be a disguised sale. The details matter.Generally speaking...In a hypothetical world, say the ring is purchased for $10,000 and $5,000 has been paid on it. and that the cancellation fee is 20% or $2,000.If TT cancels, the estate nets $3,000.If TT assumes K and sells, maybe someone will pay $4,000 for a ring where $5,000 has already been paid.Say only $1,500 was paid on the ring. If cancellation fee is $2,000, then TT will abandon property.Sincerely,Michael Avanesian, Esq.Avanesian Law Firm801 N. Brand Blvd., Suite #1130Glendale, CA 91203Tel: 818.276.2477 | Fax:818.208.4550
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