Title Loans

What Happens to my Title Loan After a Chapter 13 Bankruptcy?

Written by Steve Rhode

Question:

Dear Steve,

I filed chapter 13. I had a title loan on a car that is in my name and my daughter’s name. My lawyer told me I had to include this debt in chapter 13. Well, they didn’t file the paperwork to be paid during my chapter 13 so no payments are being paid to them.

My question is how will I ever get a title to this car again if they didn’t file the paperwork to get paid in my chapter 13?

Mandy

Answer:

Dear Mandy,

That has to be frustrating.

I think there are enough questions for you to go back and talk to your bankruptcy attorney.

The attorney was correct that you do have to include all your debts. But it’s not clear who the “they” are that you talk about. If the loan was listed, it would have been factored into your repayment plan approved by the court.

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It is also not clear if the title loan company is not getting payments because it was determined that the value of the vehicle was lower than the amount owed on the loan. It’s also unclear if the title loan company claimed they did not get payments or an accounting statement from the trustee is reporting this.

There could be technical reasons why the payments are not being sent to the title company, but you will have to take charge and determine why this is happening. Simply accepting this as the responsibility for someone else to catch and fix is not good enough.

If payments are made to satisfy the title loan, if any are required, through Chapter 13 bankruptcy, and you reach your final discharge date, you would receive a clear title after the bankruptcy discharge.

But let’s say there was an administrative snafu, and payments were not distributed to the title loan company. In trying to figure out the balance due on the loan, the bankruptcy may have limited the amount of interest that could be charged during the bankruptcy.

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Your issue is a legal question since this involves how the court or creditor dealt with your specific case. Your attorney is the person to get legal answers from.

Please go talk to your bankruptcy attorney and post an update in the comment section below on what you decide to do.


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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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