What will happen if a motorcycle isn’t surrendered after it’s been discharged in a Chapter 7 with no payments being made?

I filed for bankruptcy 3 years ago. I was able to keep the motorcycle that I put in my name for my now ex boyfriend. I am now receiving phone calls requesting me to surrender the motorcycle. I have no problem with doing that but my ex is refusing to let it go. No payments have been made either. He seems to think that since my credit report is showing a $0 balance for this bike, that I have a right to keep it. He tells me I’m being scammed by the phone calls I’m receiving. He is a very manipulative sociopath. What should I do? I cannot afford a lawyer to sue him.

Asked on May 25, 2012 under Bankruptcy Law, Virginia

Answers:

Darren Delafield

Answered 8 years ago | Contributor

The right to repossess collateral survives a chapter 7 bankruptcy discharge. Unless the debt was nondischargeable for some reason, the debt is non-recourse as to you. If the debt was discharged, that means the creditor cannot seek collection of the debt from you. But, it the creditor still has recourse against the collateral and any co-debtor. It can seek to repossess the collateral pursuant to the terms of the loan. You admit that there has been a breach of contract, so it is likely the loan says the creditor has the right to repossess the motorcycle. If you reaffirmed the debt, you wiaved the discharged in bankruptcy of the motorcycle loan and are still liable for the motorcycle loan.

You are exposing yourself to possible criminal prosecution if you attempt to hide the vehicle. Whenever any person is in possession of any personal property, including motor vehicles or farm products, in any capacity, the title or ownership of which he has agreed in writing shall be or remain in another, or on which he has given a lien, and such person so in possession shall fraudulently sell, pledge, pawn or remove such property from the premises where it has been agreed that it shall remain, and refuse to disclose the location thereof, or otherwise dispose of the property or fraudulently remove the same from the Commonwealth, without the written consent of the owner or lienor or the person in whom the title is, or, if such writing be a deed of trust, without the written consent of the trustee or beneficiary in such deed of trust, he shall be deemed guilty of the larceny thereof.

OPTIONS REGARDING SECURED DEBT IN BANKRUPTCY

Reaffirm: A reaffirmation agreement is a written contract between the debtor and the creditor in which the debtor promises to repay a portion or all of the debt and the creditor promises to let the debtor keep the collateral. The debt is usually repaid in monthly installments. The reaffirmation agreementis voluntary and the creditor can refuse to accept installment payments. There may be potential benefits to reaffirming some of your debts. For example, it may help you rehabilitate your credit sooner. In addition, a credit card may be useful when renting cars, or making purchases by mail or phone. Some creditors are more forbearing following reaffirmation and are more tolerant or more willing to accept late payments. A reaffirmation agreement eliminates many of the advantages of bankruptcy as to that creditor. Following discharge, you will still be obligated for the debt according to the terms of the reaffirmation agreement. The creditor still has remedies available upon default including but not limited to seeking a judgment and then pursuing collection through garnished wages, phone calls, collection agencies, letters, etc.

Redeem: A debtor may keep the collateral and remove the lien by making a lump sum payment equal to the lesser of the value of the collateral or the balance due on the loan.

Chapter 13: A debtor may keep the collateral and pay for the collateral in monthly installments through a confirmed chapter 13 plan.

Surrender: The collateral may be surrendered to the lien holder. If the collateral is sold by the creditor for less than the amount owed, the remaining balance will be subject to the bankruptcy order of discharge.

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The best way to resolve the issue with respect to the return of the motorcycle that was part of your Chapter 7 bankruptcy, is to contact your presumed former bankruptcy attorney for advice on the subject and to have this attorney deal with the company wanting the return of the motorcyle.

If you do not have access to an attorney to assist you on the matter, you should retain one to represent you on the matter to protect your rights in order to make sure the company seeking the return of the motorcycle is legitimate. If it is, then the attorney and you need to cooperate in letting its representative know where the item is physically located.


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