CC can take what you bought if you don't pay your CC bill

[youdontkillmoney]

If you don't pay your CC bill, the CC company can come and take what you bought or if you've already sold it, the cash you got..

http://www.latimes.com/business/la-fi-lazarus-20160415-column.html

[gdale6]

I doubt this would hold up in court, major bankcards are unsecured. Store cards on the other hand can include security clauses. What are they going to do if you order services like carpet cleaning, rip up your carpet?? How are they going to reclaim a meal that you put on the card???

[StartingOver10]

Where I have seen this issue pop up is in bankruptcy court where the creditor wants the debtor to turn over the items - or pay $X to keep the item.  It gives the creditor something else with which to bargain. 

It is referred to as a Purchase Money Security Interest. Jewelry stores are pretty notorious for following through with this in bk. I seem to remember Best Buy also but not 100% sure. 

https://www.law.cornell.edu/ucc/9/9-103

According to this link it is used by creditors for business equipment too

http://www.monitordaily.com/article-posts/super-priority-purchase-money-security-interest/

[RonM21]

Never even thought about this possibility. Seems like a touch and go issue.

[DaveInAZ]

---

@gdale6 wrote:
I doubt this would hold up in court, major bankcards are unsecured. Store cards on the other hand can include security clauses. What are they going to do if you order services like carpet cleaning, rip up your carpet?? How are they going to reclaim a meal that you put on the card???

---

I agree this wouldn't hold up in a court. The article linked says it's a Comenity Bank issued Visa card. Sounds like something Comenity would try to pull, while it would be unlikely to hold up in court it's something they could use to try to bully some less informed folks to cough up some payments.

And yeah, those store cards - when I filed BK7 in the 90s Sears threatened to come and take the tires off my car that I had bought from them. My attorney laughed and told me to throw the letter in the trash. I see in that LA Time article that Sears paid $273 million in refunds to customers to settle charges that it used a security interest provision to unfairly muscle people into making payments.

[Anonymous]

I think the CC companies would rather write it off as a loss on their taxes as oppose to putting so much effort into a courtroom battle.