My car as I exit chapter 7

Anonymous · ‎02-20-2017

I have a Toyota that I owe 1980 left (5 months). Was never late but was included in Chapt 7 (Toyota financial
Services). While I planed to pay it off does it make sense to pay it now (two weeks before discharge)? Will I get updated to paid and full and get my positive history back. Should I just wait and pay. Paying it off protects a potential repo even though Toyota seems not to do that. Any help and advice would be appreciated.

DaveInAZ · ‎02-22-2017

No, wait until you get your discharge. Payments to a creditor prior to filing or during BK can be considered "favortism" (or some better legal term) and is prohibited. If the Trustee catches that they could force Toyota to return the payment & distribute it equally among all your creditors.

It will report as IIB (Included in BK), $0 balance anyway. Just pay it off as soon as you receive your discharge.

Anonymous · ‎02-22-2017

Thank you. I was just trying to avoid a potential repo and wondered if there was an advantage.

DaveInAZ · ‎02-22-2017

@Anonymous wrote:
Thank you. I was just trying to avoid a potential repo and wondered if there was an advantage.

Well, you said you were never late, so they shouldn't be in any rush to repo. A very shady lender might since you owe so little on it, but not Toyota FInancial. You might get the payoff amount as a Cashier's or Certified check and overnight it the day you get your discharge to be on the safe side. If they have a location near you that you can take the payoff in person, even better.