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Bankruptcy, Personal Loan, Car Repo - can they take my car?

Talk about personal loans and managing them to lower your debt

Bankruptcy, Personal Loan, Car Repo - can they take my car?

Postby ohcumgache » Sun Oct 28, 2012 7:09 pm

Hi Everyone, I need a little advice... I was planning on filing for bankruptcy in December of this year. I spoke to a lawyer and they advised me that that would be the best time in which to do so. Now, in December of 2010, I took out a personal loan and used my car as collateral (my car was paid in full). The original loan amount was $5800 (I had some unforeseen emergency expenses come up) and at the time of signing the loan agreement I also had to sign a Notice of Lien to make the financial company the lien holder of my car. Anyhow I was making on time steady payments on the loan and was still in financial difficulty so in July of 2011 when the lending institution called me and asked me if I were in need of any more money, I went in and got more. They told me they would have to treat the second loan as a new loan. So the money I originally borrowed was add on (included) in the difference of the new loan making the first loan paid in full (the new loan was for an additional $3000 so the grand total was now $8800).

The financial company gave me my paid in full letters from the first December 2010 loan and I received my new loan paper work for the second July 2011 loan. The new loan was not considered a refinance I had two separate account numbers and had to go through the whole loan process all over again since technically I was only prequalified for these additional funds. Basically there was no mention of me using my car as collateral for this second July 2011 loan and I didn't sign any notice of lien paperwork this second time around. So once everything was said and done, I was still in a financial crunch and was thinking of selling my car so I sent the DMV a copy of my paid paperwork from the original December 2010 loan so I can have a lien free clean title (I was looking to sell my car to a used car dealership and not go private party) I assumed this new loan was approved based on improved credit and / or account history (since I made timely payments for those 7 months since I took out the first loan) and my car wasn't worth $9000.

Anyhow now here we are in October 2012 and I still have the second loan and at the advise of my lawyer I stopped paying the loan as of September in anticipation of filing for bankruptcy. Today I received a letter via UPS from the financial institution stating that they are starting the process of repossession on my car claiming that I used it as collateral but I didn't. That was the terms and agreement under the first loan not the second. My question is do I now have to retain a lawyer to fight this or just continue with my plans for a December bankruptcy.

I have both the original loan paperwork from December 2010 and the paperwork from the July 2011 loan. I just reread over all my paperwork and I noticed (for the first time, I must have overlooked it) that on one of the papers from the second July 2011 paperwork there is a 1 line mention of my car (just the make and model) but again I never signed any lien holder information for this second loan since it was treated as a new loan all together. How can they take the terms from one loan and apply it to another without the necessary paperwork?

My question is do they have any claim on my car? I do intend to speak with my lawyer tomorrow but I am a little anxious to know. If the second loan from July 2011 required me to use my car as collateral why wasn't I given a notice of lien to sign and since the original loan was considered paid in full doesnt that mean that the agreement and all the terms are now invalid. And why would the DMV issue me a clean title if they had a financial interest in the car?
ohcumgache
 
Posts: 864
Joined: Tue Oct 02, 2012 10:49 pm

Bankruptcy, Personal Loan, Car Repo - can they take my car?

Postby ascott87 » Sun Oct 28, 2012 7:21 pm

Hi Everyone, I need a little advice... I was planning on filing for bankruptcy in December of this year. I spoke to a lawyer and they advised me that that would be the best time in which to do so. Now, in December of 2010, I took out a personal loan and used my car as collateral (my car was paid in full). The original loan amount was $5800 (I had some unforeseen emergency expenses come up) and at the time of signing the loan agreement I also had to sign a Notice of Lien to make the financial company the lien holder of my car. Anyhow I was making on time steady payments on the loan and was still in financial difficulty so in July of 2011 when the lending institution called me and asked me if I were in need of any more money, I went in and got more. They told me they would have to treat the second loan as a new loan. So the money I originally borrowed was add on (included) in the difference of the new loan making the first loan paid in full (the new loan was for an additional $3000 so the grand total was now $8800).

The financial company gave me my paid in full letters from the first December 2010 loan and I received my new loan paper work for the second July 2011 loan. The new loan was not considered a refinance I had two separate account numbers and had to go through the whole loan process all over again since technically I was only prequalified for these additional funds. Basically there was no mention of me using my car as collateral for this second July 2011 loan and I didn't sign any notice of lien paperwork this second time around. So once everything was said and done, I was still in a financial crunch and was thinking of selling my car so I sent the DMV a copy of my paid paperwork from the original December 2010 loan so I can have a lien free clean title (I was looking to sell my car to a used car dealership and not go private party) I assumed this new loan was approved based on improved credit and / or account history (since I made timely payments for those 7 months since I took out the first loan) and my car wasn't worth $9000.

Anyhow now here we are in October 2012 and I still have the second loan and at the advise of my lawyer I stopped paying the loan as of September in anticipation of filing for bankruptcy. Today I received a letter via UPS from the financial institution stating that they are starting the process of repossession on my car claiming that I used it as collateral but I didn't. That was the terms and agreement under the first loan not the second. My question is do I now have to retain a lawyer to fight this or just continue with my plans for a December bankruptcy.

I have both the original loan paperwork from December 2010 and the paperwork from the July 2011 loan. I just reread over all my paperwork and I noticed (for the first time, I must have overlooked it) that on one of the papers from the second July 2011 paperwork there is a 1 line mention of my car (just the make and model) but again I never signed any lien holder information for this second loan since it was treated as a new loan all together. How can they take the terms from one loan and apply it to another without the necessary paperwork?

My question is do they have any claim on my car? I do intend to speak with my lawyer tomorrow but I am a little anxious to know. If the second loan from July 2011 required me to use my car as collateral why wasn't I given a notice of lien to sign and since the original loan was considered paid in full doesnt that mean that the agreement and all the terms are now invalid. And why would the DMV issue me a clean title if they had a financial interest in the car?
off course they still have a security interest in the car. Any paper work you sent to the state was meaningless the lien holder has to sign a release. December through April is actually the worst time to file bkk as many courts will decided that any tax refund you get is up for grabs for the creditors. Advising you to stop paying was the worst advise I have ever heard. My bet you did not have the money to pay for the BKK so by not paying your debts you would have enough by December to pay the attorney. You will loose the car, your credit is shot and since you took a loan July stopped paying in October less then 90 days (?) you can be charged with loan fraud as well. good luck
ascott87
 
Posts: 818
Joined: Tue Mar 22, 2011 6:21 am

Bankruptcy, Personal Loan, Car Repo - can they take my car?

Postby eliran11 » Sun Oct 28, 2012 7:30 pm

You really need to let your attorney know that they are starting the repo process, you can keep your car as long as they get the bk filed, until then keep the car hidden. The bank has all rights to the car, when going into bk you need to be clear with your attorney make sure that if you want to keep the car that you know about cross collateralization within your bank (esspeciall if its a credit union), most likely if you have your bank accounts in a credit union you will have to sign a reaffirmation agreement. When filing a bk it's normal for you to stop paying credit cards, and medical bills...you need to keep paying on things that will not be discharged or you want to keep ie car payments, mortgage payments...Also if you are going to file at this time of the year most likely your case will be held open until you file your taxes, any amount that you get for your tax refund is due to the trustee, you need to be sure that you are clear with your attorney of your states laws. Hopefully you can get into a chapter 7 and are not forced into a chapter 13. Good luck!
eliran11
 
Posts: 834
Joined: Thu Oct 04, 2012 12:11 am


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