Hi everyone, I'm new here, but this seems like a very informative place to be, and I'm hoping someone will know the answer to this situation.
We're filing chapter 7 (hopefully in the next week or two) ad we have a very odd creditor situation.
We have a loan at a local CU that was used to consolidate some high interest debt about 4 years ago. This was the same credit union that my husband had his motorcycle loans at.
When my husband's motorcycle was wrecked falling off of a traailer, the insurance company totalled it out. He then found out that the CU never perfected security interest on the title to the bike, since the insurance company made the check out to him directly, saying that there was no lein hold on the title. My husband went into the CU and paid off the loan he had remaining on the bike and used the rest of the money to pay off some student loans.
A month later he called his loan officer at the CU and asked about a debt consolidation loan- she called back an hour later and asked us to come in to sign the paperwork and we'd be set. We did, and walked away happy.
Now that we are filing CH7, we've found out (from the CU) that they used the bike that my husband sold as collateral on the debt consolidation loan- except they never informed us of this at the time since they just showed us our interest rate, what our payments would be, when the loan would mature, and sign at the "x" and leave with checks made out to our creditors. Obviously they never properly secured their interest on the bike this time either, or they would know that the bike had been totaled, has a salvage title, and could be scrap metal by now. This all started when they called after a late payment, saying that they could re-po the bike. We asked "what bike?" and they said the bike that is collateral on your loan. The we unraveled the above mentioned story.
We told them what had happened with the bike, and asked why they had used it as collateral on a loan when it no longer existed, and they got defensive and are trying to declare fraud against us, saying that we are just trying to keep the bike. Fine by us, search the property- it's not here, or better yet do a title search like you should have in the first place and that should tell you where the bike is.
Our attorney is not very concerned about the situation, and listed the debt as unsecured since they could not provide him with proof of security interest (obviously). The problem now, is they've sent a letter saying that they're forwarding the account to an attorney, to gain a jugement against us. Can they do this? How fast can this happen? and what happens if they file a judgement against us before we file (end of this week or early next week)?
Anyone have any similar experiences or thoughts?
We're filing chapter 7 (hopefully in the next week or two) ad we have a very odd creditor situation.
We have a loan at a local CU that was used to consolidate some high interest debt about 4 years ago. This was the same credit union that my husband had his motorcycle loans at.
When my husband's motorcycle was wrecked falling off of a traailer, the insurance company totalled it out. He then found out that the CU never perfected security interest on the title to the bike, since the insurance company made the check out to him directly, saying that there was no lein hold on the title. My husband went into the CU and paid off the loan he had remaining on the bike and used the rest of the money to pay off some student loans.
A month later he called his loan officer at the CU and asked about a debt consolidation loan- she called back an hour later and asked us to come in to sign the paperwork and we'd be set. We did, and walked away happy.
Now that we are filing CH7, we've found out (from the CU) that they used the bike that my husband sold as collateral on the debt consolidation loan- except they never informed us of this at the time since they just showed us our interest rate, what our payments would be, when the loan would mature, and sign at the "x" and leave with checks made out to our creditors. Obviously they never properly secured their interest on the bike this time either, or they would know that the bike had been totaled, has a salvage title, and could be scrap metal by now. This all started when they called after a late payment, saying that they could re-po the bike. We asked "what bike?" and they said the bike that is collateral on your loan. The we unraveled the above mentioned story.
We told them what had happened with the bike, and asked why they had used it as collateral on a loan when it no longer existed, and they got defensive and are trying to declare fraud against us, saying that we are just trying to keep the bike. Fine by us, search the property- it's not here, or better yet do a title search like you should have in the first place and that should tell you where the bike is.
Our attorney is not very concerned about the situation, and listed the debt as unsecured since they could not provide him with proof of security interest (obviously). The problem now, is they've sent a letter saying that they're forwarding the account to an attorney, to gain a jugement against us. Can they do this? How fast can this happen? and what happens if they file a judgement against us before we file (end of this week or early next week)?
Anyone have any similar experiences or thoughts?
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