Dragnet clauses can sink you
One of the reasons bankruptcy attorneys bristle when asked “what is the lowest price for the ‘simplest’ bankruptcy case?” is because there is really no such thing as a simple case.
There is always at least one thing out there that complicates my clients’ cases. When I find the wrinkles I always make a point of talking to clients about it so that they know that this is why they hired an attorney to deal with the court and their creditors. My clients don’t want to find out the hard way that they missed something scary and big that jeopardizes their discharge and their fresh start.
Dragnet clauses are one such thing.
A dragnet clause is a way for your creditor to secure other contractual obligations against collateral that didn’t exist when the original security agreement was created. Huh?
To illustrate one example:
Your friends at the local credit union use this clause to create a security interest in money they lend you over time. They may attach the car that you bought with the money they lent you. If this is the case, you will discover that defaulting on the payments you owe for either the car or the cash means that they will try to come and get the car.
In the old days before mass use of credit cards and Target, folks would buy household items like bed sheets and irons at furniture stores. Furniture stores would pull another version of this by saying the money people ‘borrowed’ from the store was secured by the goods. Defaulting would mean that yes, the furniture store could threaten to come and get the sheets. (gross, right?)
What does this mean to you now?
If you’ve just finished rearranging your stack of bills looking for the ones whose minimum payments you can afford this month–it may be time to call me (or some other bankruptcy attorney) to talk about options. I will help you find the nets, tricks, and pitfalls that are waiting for you.
I love doing it, honestly.