Q: New Verizon Edge Smartphone Purchase: Filing Chapter 7 in Mississippi, Will I lose the phone?

A: Your question involves 2 separate issues. The first issue is the service contract. If you file the case and agree to assume the contract, which means that you will continue paying the regular monthly service charges, then your service will not stop. However, if you intend to reject the contract, cease making the monthly service payments, then Verizon has a right to stop the turn off the service on you phone.

With respect to the purchase portion of the agreement, your ability to retain the phone depends upon the wording of the contract. If Verizon retained a vendor's lien on the phone, then Verizon will be able to repossess the phone. However,Verizon will be required to wait until your chapter 7 case is discharged unless Verizon hires an attorney, pays the court cost and files a motion to lift the automatic stay. After the stay is lifted or you receive your discharge, Verizon would be required to file a suit for replevin to pick force you to surrender the phone to Verizon. Thus, it is unlikely that Verizon will spend the money to pay attorney's fees and court cost to take possession of the phone.

Since you purchased the phone knowing that you were going to file bankruptcy shortly after the purchase was made, the specific debt that you incurred with Verizon would be ruled to be nondischargeable if Verizon spent the money to file an adversary proceeding seeking to have the debt determined to be a nondischargeable debt. Again it is unlikely that Verizon will take that action. Finally, you actions should not jeopardize the entire filing, although that is not completely out of the question.