What happens to my truck balance?

[sal]

Not sure this is where to put this thread but.....
Im 4 months behind on my truck and it was going to be included in the plan, which we will hopefully file this Thursday.
Here is my question, if i surrender the truck to Citi will i still be sued for what i owe them?
thanks

[justbroke]

Not sure this is where to put this thread but.....
Im 4 months behind on my truck and it was going to be included in the plan, which we will hopefully file this Thursday.
Here is my question, if i surrender the truck to Citi will i still be sued for what i owe them?
thanks

They may file a deficiency claim as a general unsecured claim. This will be the difference between what they sell the vehicle for, and what is owed on it.

They will receive a share of whatever is going to teh unsecured creditors.

[FranksMom]

I'm facing a similar issue. The fact is, they can attempt to do just about anything that they choose... the question is, will the judge permit the claim. I am under the impression (and some of us in this forum have a difference of opinion on this) that when you surrender a vehicle, you are surrendering it in full satisfaction of the debt. I have reviewed case studies where the court upholds this notion, and some where they don't. Different districts have different opinions on this. This is an area of bankruptcy law that is not well established yet, and it's still like a crap shoot, unfortunately.

You can try to negotiate with the bank, and get them to agree in writing that the surrendering of the vehicle will be acknowledged as full satisfaction of the debt, and/or put that clause in your plan. Nothing is guaranteed, but it can't hurt to try.

[justbroke]

I am under the impression (and some of us in this forum have a difference of opinion on this) that when you surrender a vehicle, you...

It's still different amongst the jurisdictions. The majority still says that you can surrender in full satisfaction. Others and some District Courts, have ruled that nothing in the so-called hanging paragraph spoke to a claim, only to 11 USC 506, which has nothing to do with claim disallowance (that's 11 USC 502); 11 USC 506 deals with valuation and liens (secured status).

As such, I tend to agree with the minority view. However, Judge Funk in Jacksonville (Middle District of Florida) has basically set a standard for a huge population of Florida debtors by allowing the debtor to force the lender to eat steel.

[fltoo]

JB, is this only within the BK, or does it apply to anyone surrendering a car, filing BK or not?

[justbroke]

JB, is this only within the BK, or does it apply to anyone surrendering a car, filing BK or not?

What I referenced was Bankruptcy code.

Underlying State bankruptcy and non-bankruptcy law is what usually determines how a particular District interprets the Bankruptcy Code.

So, outside of Bankruptcy, you'd have to look to your non-Bankruptcy law to determine whether or not deficiency claims are allowed. (I would venture to guess that in many if not most States, deficiency claims are allowed if the lender followed the appropriate procedure outlined by Statute.)