What to do if we were wrongfully listed as a creditor in a bankruptcy?

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What to do if we were wrongfully listed as a creditor in a bankruptcy?

We lease vehicles under Reg M; our leases are fully compliant with UCC Article 2 definition of a “true lease”. I received a call from an attorney stating that one of our customers filed for a Chapter 7. I explained that we are not considered creditors because our lease is not a credit transaction. (1) Is the phone call sufficient to trigger the Automatic Stay? Since we are legally not creditors, if the customer doesn’t pay can we take back the vehicle? We are the owners of the car on the title, can we still report a stolen vehicle? How do we exclude the car from the Chapter 7?

Asked on February 10, 2012 under Bankruptcy Law, Georgia

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You may still be considered a creditor depending on the situation wherein the state law may consider you having involved yourself in a credit transaction. The security here still exists, in exchange for a lease there is the car and exchange of monies. At this point, you may wish to file a simple motion in bankruptcy court asking to be removed as a creditor (file it with a copy of Regulation M) and ask that any stay as to you be lifted because you are still considered a debt collector.


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