Question regarding chapter 13 and car loan paid-off during the plan

[sophieanne]

Hi everyone and happy Friday.

Just a quick question..I'm in a 100% payback plan which includes my secured car loan and unsecured credit card debt. Since the trustee started making payments he has only paid the car loan. (My understanding was secured debt first) By the looks o things, the car loan will be paid off when the trustee disburses payments this month. My question is once the car loan is paid off should I receive the title back from Toyota Financial or???

My real issue is once the car is paid off I want to remove Toyota Financial as the Loss Payee on my car insurance since that would not be the case anymore. We were leasing this vehicle and converted it to a loan just before we filed. We are paying 100% of what was owed on the car loan and no interest reduction.

Just curious if anyone knows.

Thanks very much!

[BNKRPTinNC]

I guess it depends, as there appears to be no clear cut way of handling these issues from one state to the other. Paid mine off in the plan and when I contacted lender was informed that I would receive the title after being discharged from the completed 13.

[sophieanne]

Hi BNKRUPtinNC,

Thanks..i know nothing is ever easy. As I say my concern is more about removing them as Loss Payee since the loan/interest will be paid in full.

[goon]

Yeah, just depends, I have 2 cars being paid off in the plan, at this point both cars are "paid off" but I still have 2 years left on the plan. Received the title in the mail for one of the cars, will not receive the title for the other till after discharge.

From what I understand this can somewhat vary by district, as well as by lender.

[andy158]

Our trustee made random payments on everything in our plan for the first year. No rhyme or reason, but several car payments were made before any of the unsecured saw a dime. Don't worry yourself about it.

If the loan obligation is paid you should revieve the title for the vehicle. Being in a 60 month plan @ 100% payback should not have any bearing of getting the title and doing what you want with the vehicle reguarding insurance, resale, etc. I don't see where you shouldn't get a clear title having to wait until the close of the bk. It may be district specific and/or require a notice fronm the trustee because they are making the payments not you personally. Talk to your attorney about this.

[sophieanne]

Thank you everyone for your notes...i am going to contact my attorney and see what he has to say. With a very minimal payment left, I find it hard to believe that loan won't be paid off this month, since the trustee has made massive payments for the last 6 months and paid nothing else.

Again thank you; I appreciate your responses.

[zeezee]

I can tell you right now Lexus/Toyota Financial will not give you the title until discharge. My car was paid off two years ago and they still have the title. I just totaled it last week in an accident and my insurance company (Nationwide) had me do a power of attorney so that LF would release the title to them.

[angel7821]

I had a loan with Toyota Financial but I made my payments outside the plan. I got my title after I paid the car off and I will be making my last plan payment next month.

[grndmom53]

both our cars have been paid off in our plan, paid off since Nov 2012. Have not received titles yet. Our plan ends April 2014...Can't believe it has been almost 4 years.

I also want to drop full coverage on the cars, just not sure if we can or should do it!

[coronaglen]

dont drop full coverage unless you can buy a car cash! Murphys law will visit.

[zeezee]

My was paid off in the plan. And, yes, don't drop your coverage. I was going to do that to save some money and boy am I glad I didn't! If you total in an accident you won't get coverage to replace it.

[159515951]

My understanding that that you will (generally) receive the title at time of payoff, unless the amount of the car loan was decreased to present value in your Plan. It's reasonable that they would keep the title until Plan completion in the latter example to protect their interests should you NOT complete the Plan.

So -- if the balance of your loan was not adjusted in your Plan, you should get the title.

[sophieanne]

So -- if the balance of your loan was not adjusted in your Plan, you should get the title.

Thank you for your note..that makes perfect sense to me. Since we purchased the card 1 month before we filed, we in fact have been paying the full amount of the car loan. There were no adjustments to it all. Thanks again.