Most families don’t own $60,000 grand pianos. Most families have a beat-up upright piano that is little better than a BYU Piano Lab (which sell for $100 to $200). I can protect musical instruments (like the piano) under a bankruptcy exemption in Utah that protects $2,000 of the value of the item. So, in most cases, the exemption protects your piano.
However, if you are still making payments on the piano, you won’t keep it unless you keep paying for it. It is the same as a secured car or a mortgaged home: I can wipe out your personal liability on the loan, but if you want to keep the collateral (like the piano, car, or home), then you’d better keep making payments on it.
Today I had a case which was a little more complex. The debtors owe $9,000 on a piano worth $10,000. They are in a chapter 13 and proposed to pay back $9,000 to the secured creditor. The chapter 13 trustee objected, arguing that the piano is a luxury item, and if the debtors want to keep the piano, then they’d better pay an extra $9,000 to unsecured creditors.
However, debtors teach piano lessons, bringing in about $150 a month. This means that the piano is income generating, and coincidentally, the $150 a month basically covers the $9,000 over the 60 month plan. I am hoping that the trustee withdraws his objection or that the judge overrules the objection.
This is not legal advice. If you need help, go to www.robertspaynelaw.com.