What happens if Toyota does NOT file a claim and other ???

[JenR]

Filed ch 13 - 1/4/10
341 Hearing - 2/11/10
Confirmation Hearing - 3/9/10
Plan: $505/36 months - includes car payment, attorney fees, trustee fees (lien strip 2nd mortgage, $50k, and owe(d) credit cards, $50k)


Since the only thing, essentially, being paid back in our plan IS one car (Toyota Financial), what happens if Toyota does NOT file a claim?

Also, IF they do file a claim, when the plan is over and done with.... will they just send us the pink slip... or will we have to jump through hoops to get it? If they DON'T file a claim..... what the heck would happen then?

[lrprn]

Since the only thing, essentially, being paid back in our plan IS one car (Toyota Financial), what happens if Toyota does NOT file a claim?

No claim means your plan will not pay Toyota. They will have for all intents and purposes walked away from the loan and the car.

However, all non-govt creditors have 90 days to file a Ch 13 claim. I'm betting you will see Toyota file a claim before the deadline.

Also, IF they do file a claim, when the plan is over and done with.... will they just send us the pink slip... or will we have to jump through hoops to get it? If they DON'T file a claim..... what the heck would happen then?

Frankly it's hard to say what will happen if Toyota doesn't file a claim. Your lawyer probably has the best insights here about what to expect if this situation develops (which frankly will surprise me a lot if it does).

[SMinGA]

Are you sure that they have not yet filed a claim? Have you checked claims on Pacer or at the 13DataCenter?

[momofthree]

That thought didn't even occur to me. Now I'm sitting here hoping that my auto loan doesn't file a claim. (ha ha, fat chance), lol.

All we're paying in our 13 is our car as well.

[JenR]

Yep, as of this morning.... no claim filed yet by Toyota. Here's to wishful hoping

[BKDefender]

Chapter 13 rule 1322(b)(3) (or is it 4?) gives you the right to 'cure a default' on a secured loan. If your plan does not schedule the arrears on the secured loan then you are not curing the default, and if you don't cure the default, the lender still has the right to take the secured asset from you by filing a Motion for Relief from Stay (or in the alternative for adequate assurance payments). The judge will then either grant the relief from stay and they'll repossess the car, or the judge will order that you make adequate assurance payments (i.e. pay your monthly note) to continue to retain the secured asset.

Unfortunately, you don't get to keep a secured asset just because the lender does not file a claim - if you want to keep it, you have the burden to ensure you get to keep it.

William

[BnkrptcyLwyr]

Chapter 13 rule 1322(b)(3) (or is it 4?) gives you the right to 'cure a default' on a secured loan. If your plan does not schedule the arrears on the secured loan then you are not curing the default, and if you don't cure the default, the lender still has the right to take the secured asset from you by filing a Motion for Relief from Stay (or in the alternative for adequate assurance payments). The judge will then either grant the relief from stay and they'll repossess the car, or the judge will order that you make adequate assurance payments (i.e. pay your monthly note) to continue to retain the secured asset.

Unfortunately, you don't get to keep a secured asset just because the lender does not file a claim - if you want to keep it, you have the burden to ensure you get to keep it.

William

Right on brother.

First things first ... if the creditor doesn't file a claim, then you can within 30 days after the last date for filing claims by the creditors. No real panic there.

Here's some other things too. Liens survive bankruptcy. Toyota, as secured creditor, can foreclose on the collateral if you don't make the payments.

Furthermore, if there was an arrearage, and let's say this was a 3 year plan, and the last payment to Toyota actually occurred beyond the plan length (you bought the car a year ago and are paying for 5 years) ... then your were proposing to treat them under 11 USC 1322(b)(5) and cure the arrearage. Now look at 11 USC 1328(a)(1) and see which debts aren't discharged ... oops, in that scenario, the Toyota claim wouldn't be discharged! So here comes the foreclosure on collateral and the demand for the deficiency after they sell the collateral. Not what you expected was it!

So, it's not necessarily a free ride on the secured car and lender. Best to be careful ... if you want the car, make sure the claim is filed so that they're getting paid like they should. Problems can arise if you don't.