Car liens, early payoffs, and murdered security guards.....

[missfontella]

Hi guys. I'm posting this to stop myself from going crazy and possibly get some insight.
I am 38 months into a 60 month plan with below median income.

I was desperate when I filed and did absolutely no research. My bills were paid on time but my former landlord/apartment complex cashed my rent check for the wrong amount through ACH in Feb '08. The rent was paid right before I left for a 2 1/2 month business trip. 5 months later, the landlord told me I owed them money and they moved all of my payments to make me owe rent for July (even though I had just paid July). I looked and saw that they had cashed my Feb check but for the wrong amount. I asked for some payment arrangement since it was their error. They said no and took me to court. I said fine and gave them a check for Aug rent. (you can't make this stuff up) My job just happen to make a mistake and put my whole paycheck into my retirement that week. Long story short, the judge evicted us (5 kids and I) and I got a car title loan to find a new place to live. Got an apartment in a neighborhood that we could move into immediately and afford.

I filed Chapter 13 bk to keep the car to get back and forth to work. My lawyer told me that I could pay my bk off after 36 months using a tax refund. I was considering it because I would really like to get us into a decent neighborhood. This place *eyeroll*. Kids shooting other kids with bb guns. Maintenance man fired for dealing drugs. Kids tasing lizards. Our apartment has been robbed 4 times. Windows busted twice. Security guard was murdered (they haven't solved it). Adult punched my kid. Car egged......I could go on, but I won't. I'm sure you get the point.

I was about to approach my lawyer about obtaining a payoff balance but began to wonder what would happen to my car title. The company perfected the lien against my vehicle but did not file a claim with the trustee. I have done some research and it doesn't look good. However, I have not seen anything about what happens if the secured creditor does not file a claim at all. I sent my lawyer an email but she has not answered yet. Has this happened to anyone else? How do I keep my car after discharge?

I'm not looking for anything to write in stone....just something to ease my churning mind. I really want out of this apartment. I can't afford to rent/buy a decent home AND buy a new car. If I have to stay, then I just do. Any thoughts?

[AngelinaCatHub]

Your problems overwhelm me. If your company made a mistake, they should correct that. Why have they not? Make them do so and redeem your car. NEVER use a payday loan or title loan. 400%.

On your days off, find a cheaper place in a better space if you can. Ask your company for a transfer if possible. Without more info, I see no solutions at hand. Sorry.

The "comedy of errors" is almost unbelievable. I do believe you had this situation, but time will aid in this, and more info will help us help you. 'Hub

[missfontella]

My job did get the money back out of my retirement account but it took a few weeks. I had documentation of all of it (bank statements, check written for correct amount, receipt from landlord for Feb rent, paystub, and email from payroll department) at the court preceedings. The judge never looked at any of it. He said "Don't show me a duplicate check. It means nothing. Does anything in those papers show me where they got their money?" (I'll never forget it) I said " I wrote the check. I gave them the check. I had the money in the bank to cover the check. I can't process the check for them". He told me something I will never forget "It doesn't matter. It's your responsibility to make sure that they get their money". Needless to say, I used money orders for awhile after that.

[justbroke]

First rule of bankruptcy... all liens pass through bankruptcy untouched. (Exception is only where the debtor moved to have the lien voided by filing appropriate motion to do such.)

A secured creditor does not need to participate in the bankruptcy. In fact, every creditor that files a claim is warned that filing a claim places the creditor under the jurisdiction of the court. What I would do if I were you? I'd probably check that the lien was actually recorded properly. Then, if it isn't or there are issues, move to have the lien avoided in the bankruptcy. Otherwise, they still have their perfected lien.

This is why debtors -- and the Trustee -- are allowed to file a claim on behalf of secured creditors to make sure they are included in the plan. This keeps you from having issues after the case is discharged, dismissed or otherwise closed.

[missfontella]

justbroke, my question is this. Is placing the lien after I filed legal? I appreciate the input. I told my lawyer my reasons and goals in the bk but I had no idea how to check that she was doing her job well. I'm assuming it is too late to force them to participate because its 3 years later. Is it possible to just pay the creditor the lump sum and get the lien removed that way?

[justbroke]

justbroke, my question is this. Is placing the lien after I filed legal?

According to caselaw... yes. So long as they were entitled to perfect the lien prior to you filing the case, and they did so within the period of time under your State's non-bankruptcy laws. In other words, you can't use the bankruptcy to keep someone from perfecting an otherwise valid lien.

You can always satisfy a lien by paying what you owe the creditor! That operates under your State's non-bankruptcy law and probably the UCC (Uniform Commercial Code).

[AngelinaCatHub]

justbroke, my question is this. Is placing the lien after I filed legal? I appreciate the input. I told my lawyer my reasons and goals in the bk but I had no idea how to check that she was doing her job well. I'm assuming it is too late to force them to participate because its 3 years later. Is it possible to just pay the creditor the lump sum and get the lien removed that way?

Yes, you can pay off the Judgment (or negotiate a lower payoff) and once you satisfy the Judgment, the lien must be removed. Your question about the timing I cannot answer and would like to know myself. All suits are tolled in bk. I'm not sure about the perfection of a lien if a Judgment pre bk was had. 'Hub

[missfontella]

Thanks justbroke and Hub! I will be to sleep better tonight. Assuming that I only have to pay what I owed at the time of filing ($2000 principal, $500 interest), I may be able to do that with my tax refund and worry about getting out of this apt later. I'd rather hold my ground and try to gain more later than lose what have trying to push it too hard.

[justbroke]

I'm not sure on your interest calculation. Interest continues to accrue so that may be an issue for you. I'm surprised that the title loan company didn't seek to modify the automatic stay in order to repossess the vehicle.

[missfontella]

See, that is where things get scary for me. If the title loan company can demand any amount to release the lien.....I might as well let them take the car. There is no way to gauge what they will want if they are allowed to add interest from when I filed. The $500 interest was one month worth on a $2000 loan. 38 months later, by those same standards, I would owe upwards of $21000. My car is 7 years old with 120,000 miles on it. I have decisions to make but not enough info to make them. The car title company is listed in my plan but did not file a claim, am I breaking the rules if I contact them and pay them on my own? Or should I be trying to do this thru my lawyer? She still hasn't answered my email but I assume it is due to the holiday pile-up. If I don't hear from her by tomorrow, I'll try again.

[justbroke]

I would have actually had them in my plan and would have paid them no more than the Till rate (5.25%). It could get real messy to attempt to fix this. Did I ask, did you file through an attorney? If so, have you asked them how easy it might be to modify your confirmed plan? This is all really strange because the creditor didn't try to enforce its lien rights by participating or by seeking relief. However, none of that changes their rights.

How did your plan treat this car loan? (Specifically, in your confirmed plan, did you list it with certain payments and a certain interest rate?)

[tobee43]

jb, would OP have a chance of conversion of the 13 to a 7? with so many dependants and below the median thereby and or hopefully elimating much of this problem? i'm having a difficult time, even understanding why under all those circumstances (with out a home etc.) he/she is not in a chapter 7?

[tobee43]

ps missfontella, didn't mean to type behind your back

[justbroke]

jb, would OP have a chance of conversion of the 13 to a 7? with so many dependants and below the median thereby and or hopefully elimating much of this problem? i'm having a difficult time, even understanding why under all those circumstances (with out a home etc.) he/she is not in a chapter 7?

There may be a reason that the person is in a Chapter 13. As you can read in the initial post, the person filed Chapter 13 to "keep" property. This is one of the primary tools of the Chapter 13 -- the ability to keep property despite being behind in payments.

missfontella will need to assess what the best "financial" way forward is for them. Conversion to Chapter 7 would almost definitely cause loss of the car unless it is redeemed or it comes current. Redemption may be the best strategy if going to a Chapter 7.

[tobee43]

There may be a reason that the person is in a Chapter 13. As you can read in the initial post, the person filed Chapter 13 to "keep" property. This is one of the primary tools of the Chapter 13 -- the ability to keep property despite being behind in payments.

missfontella will need to assess what the best "financial" way forward is for them. Conversion to Chapter 7 would almost definitely cause loss of the car unless it is redeemed or it comes current. Redemption may be the best strategy if going to a Chapter 7.

thanks jb for the insight, makes sense.