what happens if a family bought a car for you before chapter 13 and it's in your name but you have to pay them back. Can they come up with an agreement that you can pay them back in 13?
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No, then can't. It's considered an unsecured loan unless the "family" had filed a notice of lien with whatever the registry of motor vehicles or some UCC-1 type filing with the appropriate government agency. (Basically, they filed a lien.)
If they didn't do that within 30 days of loaning you money to get the car, they can no longer record it. Unfortunately, the equity in the car is 100% and hopefully it is covered by one or more State exemptions.
If not, you are exposed.
You can not just "pay" them back in a Chapter 13. They will be considered an "unsecured creditor" and will receive their "pro rata" share of what you pay to unsecured creditors through your Plan. If you're in a 100% plan, they'll get 100% (if they file an claim and it is allowed). If they fail to file a claim and/or the Plan pays less than 100%, then they will get anywhere from 0% to 100% depending on other creditor filings and how much you're paying into the Plan.Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
Status: (Auto) Discharged and Closed! 5/10
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Any advice provided is not legal advice, but simply the musings of a fellow bankrupt. -
We owe a family member some money and our lawyer said to NOT pay them back or they will be considered a preferential debtor and the other unsecured debtors can go after them to claim money. So...now we can't pay that person back either except through the plan with the other creditors. I wish I would have known that before we borrowed the money...I feel so terrible about it.CH13 filed 5/21/09; 341 6/17/09; confirmed 7/14/09]
Discharged: 7/25/12Comment
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You can still pay them back after BK and give them any extra cash.Originally posted by Billssuck View PostComment
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