Dear Bankruptcy Adviser,
I was forced to file Chapter 7 bankruptcy. I agreed to surrender my vehicle. After my Chapter 7 was discharged, I naturally expected my car to be picked up by the lender. It has now been 3 months. Is there a required amount of time in which they have to pick it up? I have made several calls about this to my lender. Not 1 call has been returned. Isn't there something in the law that says they have a time limit to pick up the car, or else release the title to me?
This is a dilemma I am seeing more and more frequently. I have some suggestions for you, but I would like to hear from readers whether other alternatives exist.
This is what happened: The car lender received notification of the bankruptcy and you listed in the bankruptcy paperwork that you wanted to surrender the car. The catch: The lender does not want the vehicle back. The lender still has legal ownership of the vehicle since you never paid the car off, but the lender refuses to take possession.
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This is also happening more often with motorcycles, ATVs, Jet Skis and recreational vehicles. So many people are surrendering them that the resale value is often very low. It's so low, in fact, that the lender doesn't want to waste resources to repossess, refurbish and resell.
The problem for you is this: I don't know of any laws that would require the lender to give you the title, even after an unreasonable period of time. But until this matter is settled, you will have to foot expenses such as registration and insurance, for reasons I'll explain below.
In my opinion, you have 3 choices at this point. Let me outline them for you.
One, keep the vehicle and continue to use it. One day the lender or some collection agency will determine it is worthwhile to pick up the vehicle. As I mentioned, keep the vehicle registered and maintain proper insurance. You don't want to compound the filing of a bankruptcy with a post-bankruptcy car crash. Your liability in an accident will not be part of your bankruptcy case -- in other words, it won't be dischargeable.