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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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โˆ™ 2006-03-16 23:22:40
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Q: What do you do if you stopped making payments on a car loan after filing chapter 7 bankruptcy and the creditor has refused to repossess the vehicle but will not release the lien?
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After filing chapter 7 you did not reaffirm your car loan what happens now?

2 factors: 1. Are you current on your payments? - if you are not current on your payments the creditor will most certainly repossess your vehicle. however you will not be liable for any deficiency amount. 2. Who is the creditor? - Most creditors will gladly continue to accept payments on the vehicle and not repossess it. however some creditors such as Ford Motor company will repossess regardless of whether or not you are current.


What happens after chapter 13 bankruptcy?

Chapter 13 bankruptcy is basically a set repayment plan that is usually allowed by court, even if the creditor objects. When you satisfy your payments in the allotted time you have usually settled your bankruptcy. See the related link below for detailed info on chapter13 bankruptcy.


If a car has a lien placed on it prior to bankruptcy being filed do you get the title back when the bankruptcy is completed?

It really depends on the type of bankruptcy petition you file. If you file for Chapter 7 bankruptcy the creditor who put the lien on your car may be able to take your vehicle. If you file for Chapter 13 bankruptcy you'll have the opportunity to make payment arrangements with your creditor and in that case you should get the title back after all of your payments are made and your amended. contract with the creditor has been fulfilled.


If you are not listed as creditor on chapter 11 bankruptcy?

File a proof of claim


If you file for chapter 7 bankruptcy and have the first meeting with the treasurer can you still add a creditor to the bankruptcy?

You should have no problems filing an amendment to add the creditor.


Can your car be repossessed after filing chapter 7 bankruptcy?

Yes, if the creditor first obtains relief from the automatic stay. This is accomplished by filing a motion and proving that you have not made payments on the vehicle.


Filing a Chapter 7 with 2 payments owing on your car how long do you have in getting it current before the creditor can take it if you plan on curing the default 30 days after filing?

When you file a Chapter 7 bankruptcy, you have the option to keep your home and 1 vehicle. If you are able to make the last 2 payments on the car, you can keep it and not include it in the bankruptcy.


Can chapter 13 bankruptcy payments go up?

Yes, they may.


Does chapter 7 protect from civil suit?

Yes, as long as the creditor is listed on the bankruptcy.


Chapter 13 bankruptcy be dissimisal?

You can get a Chapter 13 bankruptcy dismissal by asking your lawyer to ask the trustee for a dismissal. If you are having trouble making the payments, you can ask for you bankruptcy to be modified.


What if the creditor sells the car anyway while automatic stay is in effect?

In a Chapter 7 bankruptcy, a secured creditor has the right to repossess any secured property and sell it. However, if the car does not bring enough at the sale to pay off the entire loan and cost of repo, the automatic stay prohibits the creditor from pursuing this deficiency balance.


Will bankruptcy affect your car that is being used to secure a loan?

As long as you keep making the loan payments the creditor wont care if you declare bankruptcy. If doing a cram-down in a chapter 13, the lender would have to accept the current value of the car.

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