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Vehicle included in discharge.

AeroKrix
Frequent Contributor

Vehicle included in discharge.

My friend’s discharge was on October 2017 and his vehicle was included in bankruptcy. The creditor has not contacted him via phone or mail regarding the surrender/repossession of the vehicle. He currently still has the vehicle and is parked on the driveway. His lawyer, at the time of discharge, told him that the creditor should contact him regarding the arrangement of surrendering the vehicle. He even contacted the creditor and asked about the bankruptcy and the vehicle around December 2017.

My question is, is he under some legal obligation to return the vehicle at a local dealer (creditor is the financial arm of the manufacturer) himself, on his own? He does drive the vehicle, keeps up on the regular maintenance, and still pays the insurance. The way my friend looks at it is that it’s a “free car” that he can use until the creditor takes it back.

Any insight as to what he should do would be great. Thanks!
Current 09/01/2021 EQ - 515 FAKO ; EX - 591 FICO ; TU - 598 FICO

Walmart CC $3.0K || CapOne QS1 $700 || CapOne QS $800 || Mission Lane $1.5K || Merrick $1.0K || AMEX Optima $500
Message 1 of 8
7 REPLIES 7
tricie17
Frequent Contributor

Re: Vehicle included in discharge.

They will definitely pick it up so just be aware of this.  Where and when is difficult to pin down with all of the repos taken place these days. Depending on the car value and all, it could be sooner then later.  Actually you should remove tags and have them pick it up as you do not want any responsibility tied to the car.  This gives you a clean spot to start.  Do the right thing.

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Message 2 of 8
leonel9
Frequent Contributor

Re: Vehicle included in discharge.

The vehicle belongs to the lender. You must cooperate with their efforts to pick up the car, but I don't believe you have an obligation to take it anywhere. 

 

Depending on the value of the car, the lender may, or may not repossess. They may find it too cost prohibitive to reposses. For example, if the reposession cost is $1,500 and they are expected to net less than $1,500 after the car is sold at auction,  they may just ignore it. Collections departments are not in the business of incurring more expenses. In this case, the car will forever have a lien on it. What happened when he called the bankruptcy department in December? If they won't reposses it, they may be open to an offer to purchase it from them. (E.g. $500 for a lien release).

 

I'd also be concerned about removing the license plates. In some states, such as California, the plates stay with the vehicle unless they're custom plates.

 

If I were  in his position, I'd negotiate with the lender if I wanted to keep the car. If I didn't, I would keep driving the vehicle knowing that it could be reposessed at any time -- like while you're at the grocery store -- so don't keep anything of value in the car. If you use it, keep it insured. If you want to truly abandon it, research your state's procedures for releasing liability.

 

Message 3 of 8
AeroKrix
Frequent Contributor

Re: Vehicle included in discharge.

My friend has been waiting to be contacted by the creditor regarding the car and no communication as of yet. It’s like he wants to do the right thing, but he doesn’t even know what to do with the car. I don’t think he should remove the plates since it’s tied to the vehicle and not the owner.
Current 09/01/2021 EQ - 515 FAKO ; EX - 591 FICO ; TU - 598 FICO

Walmart CC $3.0K || CapOne QS1 $700 || CapOne QS $800 || Mission Lane $1.5K || Merrick $1.0K || AMEX Optima $500
Message 4 of 8
AeroKrix
Frequent Contributor

Re: Vehicle included in discharge.

I understand that when someone surrenders a vehicle (not through bankruptcy), they make arrangements with the creditor for someone to pick up the vehicle or drop off somewhere, like at a dealership, thus incurring less costs.

When he talked to them in December, he talked to te department that deals with bankruptcy and asked what the next steps should be since the discharge. He was told that they will be in contact with him shortly. He’s bearding nothing back since.

He doesn’t mind the free car and he does not kept anything in the car whenever it’s park outside. He actually has a small bag where he puts all belongings and carries it with him when he leaves the car.

He wants to call the creditor again, but he thinks they forgot about the car, or like you said, may not be worth their trouble right now, and calling them will “wake the giant”. And the caveat right now is that the registration is due for renewal in June.
Current 09/01/2021 EQ - 515 FAKO ; EX - 591 FICO ; TU - 598 FICO

Walmart CC $3.0K || CapOne QS1 $700 || CapOne QS $800 || Mission Lane $1.5K || Merrick $1.0K || AMEX Optima $500
Message 5 of 8
leonel9
Frequent Contributor

Re: Vehicle included in discharge.

My opinion on the registration: The cost of paying the registration is likely similar to or less than the cost of an auto loan payment. If the lender isn't moving toward getting the vehicle, I'd renew the registration the last day before a penalty is assessed. 

Message 6 of 8
Chalai706
Established Member

Re: Vehicle included in discharge.

We had a vehicle financed with Huntington bank that was included in our BK. We purchased another vehicle and contacted the bank to say that we would no longer be making payments and that they could come pick it up. That vehicle sat in my driveway for like 7 months! At that point we called them and attempted to make an offer for the vehicle. It was still nice and driveable! They declined our offer.... SEVERAL TIMES! They were playing hard ball. We finally had to send them a letter saying that if they didn’t pick it up? We would use legal matters in order to obtain the title due to the vehicle being “abandoned”. Then they finally came and got it.... it was ridiculous. I felt like they were punishing us!
Message 7 of 8
CreditNewguy
Regular Contributor

Re: Vehicle included in discharge.

You should have kept driving it at that point.  

Message 8 of 8
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