I have a really crappy car that i got from a horrible car dealership....the cars transmission went out and is not even worth fixing since it was worth maybe $1000 BEFORE the thing broke down and I owe $5600 on it. If its salvaged or sold to junk yard will I be able to discharge it in a bankruptcy or will I be forced to pay for it?
You can walk away from the deficiency, but do not try to sell it/ scrap it. Just call the financer and have them pick it up. Don't try to get any extra money from it. Trying to sell it can get you in trouble with either the buyer or the bank, and it can result in allegations of fraud or willful harm (debts for fraud or willful harm are non-dischargeable in bankruptcy).
Don't transfer the property in anticipation of filing bankruptcy. The bank could object to your bankruptcy and the debt to the bank could be held non-dischargeable, meaning you would still have to pay for it even though it would have been discharged if you hadn't done anything.
This should not be considered legal advice, but rather simple information. You should consult a lawyer to review your unique situation. No client-lawyer relationship exists until you sign something indicating there is.
The lender still has a valid lien against the vehicle, and the vehicle loan is therefore secured debt. When you file bankruptcy, you must also file a "Statement of Intentions" as to this secured debt, in which you are telling the court whether you want to keep the vehicle (and reaffirm the loan) or surrender the vehicle. Since you don't want the vehicle anymore, you will have to surrender it in your bankruptcy to the lender. That will be a big problem if you no longer have the vehicle because you sold it for scrap.
My colleagues are absolutely right: selling the car for scrap could very well trigger an adversary action against you by the vehicle lender, who could among other things try to get that debt declared non-dischargeable under Bankruptcy Code 523(a)(6) among others.
Don't do it. Just tell the court you want to surrender the car to the bank in your bankruptcy. And please hire a good bankruptcy lawyer.
This comment is offered as general information only and does not constitute legal advice. Publication of this information does not create an attorney-client relationship. Always seek an attorney in your jurisdiction for specific advice concerning your particular matter.
If you already sold it for scrap, the treatment of the car in bankruptcy is the least of your problems -- selling or disposing of the collateral for a secured debt is a crime in many states. Talk to a CRIMINAL lawyer in your state before doing anything else.
This is a duplicate post. You cannot scrap or salvage any car in MN without the lien release from the lender - it cannot legally be done. So, in bankruptcy you would simply allow the car to be repossessed by the bank. But, they probably won't come and get it (although they can at any time). So, you're stuck with it since the bankruptcy won't release the lien on the title.
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