Moving out of state after auto loan included in bankruptcy

[MadMan2k]

Hi all,

We have a chapter 7 bankruptcy that will be discharged on the 13th of August (next week). I have to get a larger vehicle for my wife due to her being pregnant with twins and we already have 3 kids, so we have decided on the Chevrolet Traverse. Our risk tolerance is low and we are going to attempt to buy a new one as they have some good rebates currently. The current generation is considerably more fuel efficient than the previous ones as well.

However, the pickup truck we have now was included in the bankruptcy. The Chevy dealer won't take it as a trade due to the IIB situation, and it's a few thousand dollars underwater as well.

To complicate matters, I am going to be separated from the military due to medical problems and will be moving out of state soon. My amount of severance or pension is TBD.

I am concerned about trying to register the truck in a new state with it technically having been discharged in the bankruptcy, even if I stay current on payments. Does anyone have experience with this?

There are other financial reasons I'm considering switching to a small car, mainly because I don't want to have to struggle with two large auto loans and a drastic reduction in income, but also due to the fuel efficiency issue even though our truck is reasonably good on gas (it's an F-150 with the 2.7 EcoBoost).

If the registration will be a potential issue, I'll just plan to surrender the truck sooner rather than later and acquire a fuel efficient car to replace it. I'd really rather a motorcycle, but we're moving to a place where it does snow and I'll be driving over 40 miles one way to attend college. Even if it won't be an issue, I may end up surrendering the truck once I save up more cash for a vehicle.

Thank you in advance!

[Anonymous]

I'd check with the new state's DMV and your lender to determine what needs to happen to re-register the vehicle in a new state. At worst, the lender should be able to get a copy of the title that lists them as lienholder. The bankruptcy discharges your obligation to repay the auto loan, but it does not remove the lender's lien on the vehicle. 

Unless I'm missing something, this is probably easier than you're making it. 

[MadMan2k]

Thank you for the reply.

I may contact the DMV but the more I think about it the more I think it would be wise to get a cheaper and more efficient car.

I do have a habit of making things more complicated than they have to be. LOL

[Anonymous]

We just did this with our SUV that was included in our 13.  They were taking forever to come get it, so we moved several states over.  We took it with, but did not register it.  The plates from the previous state were still good and we kept it insured.  A few months later the bank finally called looking for it.  We told them we relocated and where they could get it.  They had no problem.  They contacted a local repo guy and he came and got it.  No harm no foul.

[MadMan2k]

Thanks for the reply.

I decided to go with an older car that will cost less than four payments on the truck would and will get better MPG. The family has owned it since new and recently did a lot of repairs.

We were able to finance the new SUV for my wife, a bad APR but we are working hard to rebuilt credit and will refinance ASAP. Moving on up!