I entered into chapter 13 bankruptcy in 2018 with me surrendering my car. The finance company never came a picked up the car and when I called them they said that they would not be picking it up. They changed the loan for the car from secured to unsecured with the bankruptcy court but are not releasing my title,but I have to store the vehicle since it's still in my name. What can I do in this situation
Honestly the easiest thing would be to take the vehicle and leave it in the creditor's parking lot. Even if it does not run. Leave it in a parking space, walk inside and leave the keys. When they tell you that you cannot do that, ignore them and drive off.
Nashville Bankruptcy Attorney Greg Atwood, Partner at Atwood & McVay, LLP.
I agree with Mr. Atwood. That is one way to handle this. The other way would be to just continue to drive it, keep it insured and licensed according to state law but just continue to use it just like you would any other car. Even if they won't give you the title, you can still keep it registered and drive it for free. the only issue would be if you ever want to sell it, then follow Mr. Atwood's advice and drop the vehicle off at the nearest office of the creditor, tell the manager what you're doing, give the keys to the manager take the plates off and turn them then cancel the insurance.
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Consider dropping it off at an auto chop shop and see if they will take the vehicle. Perhaps, they may also offer you some money for the vehicle.
Talk to your bankruptcy lawyer. If they filed a claim with the court stating the loan is unsecured then you can hold them to that by having your lawyer file a motion to avoid their lien on the title and asking the court to order the creditor return the title to you with a release of lien noted. Your reasoning would be that they indicated on the claim form that it is an unsecured debt and they should be estopped from denying that assertion. Ask your attorney what the rules are on disposing of assets during a bankruptcy. You may need court permission to sell it. Or you can simply use it as long as you keep it insured and licensed.
Free car! Well, almost. Legally speaking, you own the car and they have a lien on the title. As it stands, you can do whatever you want to do with that car with the single exception of transferring the title to someone else.
If this car has any objective value to you, meaning that if you have any use for it, then you can have your lawyer file a motion to modify the plan to set the value at $10 (or $1, or $100, or whatever your judge or trustee will let you get away with), and set that up as a secured claim in the plan. Assuming you complete the plan successfully, then they will have to give you a clean title when it's all over. Your lawyer might charge you for the extra time, so don't do this unless the car really does have some value to you, but it is a neat trick which will probably work, considering the creditor is willfully asleep at the switch.
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