QUESTION
What do I do if a title loan was discharged in the chapter 7 but the loan company refused to take the secured vehicle?
Asked on Feb 12th, 2014 on Bankruptcy - California
More details to this question:
The loan was discharged but the loan company says they don't want the car, even if I agree to surrender it, they want the money. They still send bills for the loan. They say that once the chapter 7 discharged they can again come after the monetary debt of the original loan.
11 ANSWERS
That is not true. Contact your BK attorney. You can ask the Bankruptcy Court issue a contempt citation against the creditor. You can also turn the creditor into the State Attorney General's Office for violating your state collection laws. These debts are not collectable, assuming the creditor was listed on your schedules, and the "Statement of Intention" clearly indicates that you wish to surrender the vehicle (I am also assuming you did NOT sign a Reaffirmation Agreement with that creditor).
Answered on Feb 24th, 2014 at 4:49 AM
If you surrendered the car and they refused to take it, that is their problem. The debt has been discharged and cannot be re-asserted. By attempting to collect this debt they are violating federal law.
Answered on Feb 18th, 2014 at 4:21 PM
Family Law Attorney serving Hackensack, NJ
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The Law Offices of Stuart Jon Bierman
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Seems like you should consult with a lawyer about when the time would be right to file a motion to hold them in contempt of court for seeking to collect a debt that was discharged, and maybe they are also currently in violation of the Automatic Stay. That could be the subject of another motion to hold them in contempt. If you do not have an attorney then I would be glad to meet with you.
Answered on Feb 18th, 2014 at 4:20 PM
2 Awards
They only have a security interest left in the car. If they attempt to collect on a discharged debt they are violating federal law. The only recourse for them is against the car.
Answered on Feb 18th, 2014 at 4:08 PM
The best way to proceed in this case is to sue the creditor for contempt in the bankruptcy court. You should be able to force them to pay all the costs of the suit including your attorney fees, and the court will order them to release the lien they have on the title so you can dispose of the car.
Answered on Feb 18th, 2014 at 2:33 AM
2 Awards
They cannot attempt to collect. You can threaten to seek sanctions against them for violating the automatic stay.
Answered on Feb 18th, 2014 at 2:32 AM
bankruptcy Attorney serving Paul, ID
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Paul N. J. Ross Law, PLLC
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They are wrong. Personal liability was discharged under the Chapter 7. Visit with your attorney, you have discharge injunction violations that can be dealt with in the bankruptcy. Their only recourse after the discharge is to sell the vehicle and realize whatever they can from the sale.
Answered on Feb 18th, 2014 at 2:32 AM
Deborah F. Bowinski
They are wrong. They can either take the car or the money. Call your lawyer. If you don't have one you may wish to hire one now to assist you.
Answered on Feb 13th, 2014 at 5:28 PM
Litigation Attorney serving Stockton, CA
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Patrick Jay Edaburn
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I would discuss this with your bankruptcy attorney. If the loan was properly discharged then they should not be able to collect.
Answered on Feb 13th, 2014 at 5:15 PM
Consumer Bankruptcy Attorney serving Los Angeles, CA
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Orantes Law Firm
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What you do is set them up for and then file a lawsuit in bankruptcy court for violating the discharge injunction by continuing to bill you and not take the vehicle or remove the lien. Even though the lien on the vehicle survives a bankruptcy filing, if you are willing to surrender the vehicle, the secured creditor cannot try to collect any further from you. The secured creditor is limited to trying to collect from the collateral by repossessing it. Document the phone calls or other communications and save all written communications.
Answered on Feb 13th, 2014 at 5:13 PM
When are you going to stop taking legal advice from creditors? Do your creditors have a law degree? Unlikely. More likely they have nothing more than a high school diploma as their education. Creditors lie, especially if they believe you are ignorant. If you contact a bankruptcy litigation attorney, you may be able to sue the creditor for a violation of your bankruptcy discharge & obtain money damages, which would include your legal fees.
Answered on Feb 13th, 2014 at 5:13 PM