Quick Answer: Title loans must be included in Chapter 13 bankruptcy repayment plans, and if the lender didn’t file proper paperwork, the debtor should contact their bankruptcy attorney to resolve payment issues. The title will be released once the loan is satisfied through the Chapter 13 plan and discharge is completed.
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.
Each weekday I send one short email: one story that caught my attention, why it might matter to you, and one manageable thing you can do with it. A couple of minutes, and a dad joke.
In the latest issue (Oct 16): The check that looks like a scam may be real
Free. I sell nothing. Unsubscribe any time.
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?
The Daily Money Brief — Free, at 10 AM
Money you may be owed, scams to dodge, and the fine print decoded — the consumer money news that affects your wallet, every weekday.
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.
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.
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.
That’s a different situation than taking out a brand-new title loan while your Chapter 13 is already active. If that’s what you’re considering, here’s what to ask your trustee before you sign anything.
Before You Sign Anything: Run any debt relief contract through the free Contract Decoder to spot hidden fees and unfair terms. Check the company’s complaint history with the Scam-O-Meter.
Compare Your Real Options: Most debt relief companies won’t tell you about all your options — especially the ones they can’t profit from. Credit counseling has a 21-27% completion rate. Settlement resolves about 1% of enrolled debts fully. Bankruptcy has a 95% discharge rate — and protects your retirement. Take the Find Your Path quiz for a recommendation based on your actual numbers.
Asked question about title loan and bankruptcy.
Answered.