Handling a Creditor Purchase Money Security Interest
If you receive notification from a creditor stating that a purchase money security interest (PMSI) is attached to property currently in your client's possession, there are a few things to remember before you decide to dance to the music of the creditor.
Initially, make sure that the creditor provides the appropriate documentation to prove that a PMSI is attached to the described property. If you fail to provide a due diligence approach for your client, you may end up with a situation where your client turns over property to a creditor that he or she could have kept because it was unsecured. Also, without the PMSI documentation, your client possibly could pay for property that is dischargeable in the bankruptcy proceeding.
So, make sure you do your homework when a creditor claims a PMSI. By providing a thorough investigation into the matter, you will assist your client in rooting out any unsubstantiated PMSI claims
