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Bankruptcy Law

Is there any way to keep the vehicle if your bankruptcy has been discharged and you have making car payments but the lender wants you to turn it in?


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Wiki User
2004-09-20 00:15:56
2004-09-20 00:15:56

Are you in default of the loan contract(INS)??? Did you reaffirm the debt?? Are you CURRENT on the loan?? Contact your B/K attorney for more info.

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Talk to the lender, or you can file Chapter 13 Bankruptcy to lower the payments where you can afford them.

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A vehicle is a secured loan and cannot be discharged in bankruptcy. If a reaffirmation agreement between the lender and the borrower is not possible the vehicle is usually repossessed. However, the lender does not have a legal obligation to recover the vehicle. The lien will not be released until the loan is paid or settled to the satisfaction of the lender. Under new bankruptcy laws, the lender is entitled to collect the full amount of the loan plus any applicable legal fees and interest. This generally means that the lender will file a lawsuit to obtain a judgment which can be used as a wage garnishment, bank account levy or other method as allowed by the state laws to collect money owed.

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Yes, your obligation under the promissory note will be discharged, however, the security interest will remain. This means the lender can still foreclose on the property if payments are not made. If you plan to surrender the property to the lender, then this isn't an issue.


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