Car Surrender Question

[98daffodils]

Good morning!

I am post 341 in my Chapter 7 but discharge won't happen until sometime in September. I had originally planned to retain and pay my vehicle (reaffirmation was not possible). But I was able to get a much lower interest rate and newer model so I decided to do that. The dealership where I got the new car from took possession of the car that was to be surrendered. They said they would send Bridgecrest (my lender) a certified letter letting them know I had surrendered the car to them. Per my lawyer's guidance, I have taken the insurance off the prior car and surrendered the plates to the DMV.

My concern is when I check my status on Bridgecrest it still shows current, and it shows the next payment is still due (Aug 9). The dealership says they sent a certified letter to Bridgecrest letting them know it was surrendered to them, but I am wondering if Bridgecrest doesn't know yet will they try to repo? I don't want the hassle of that nor that reported on my credit report. Should I have my lawyer send Bridgecrest something or should I call Bridgecrest myself? Just trying to avoid the headache....

Thank you!

[justbroke]

There's no way to tell what your lender is doing or will do. Most of them won't touch the vehicle until the discharge is entered. I write this because you have "Retain and Pay" on your Statement of Intentions (SOI). Since those were your stated intentions, the lender is likely backing off and won't take any adverse action until you are behind in payments.

It may be worth calling your lender. It is likely that they won't speak to you since you are represented and in an active bankruptcy. Maybe your attorney can call them.

Regardless of notification, your lender will still show your loan as past due until they are paid, or the discharge is entered. I don't know what the dealership does with vehicles that are surrendered in bankruptcy. It's certainly interesting that they now have the car. I wonder if they negotiate something with the lender so the lender doesn't need to repossess and liquidate.

[98daffodils]

Yeah... this dealership specializes in bankruptcy (or rather has a dept dedicated to it). It seemed odd to me but my lawyer said it was fine. She is going to fax the lender a notice as well. This is likely me being paranoid, but I don't want them to try to take a car I don't have... and the one I do have now is the same kind of car, just newer. But I assume repo folks check VINs. Had a nightmare last night they took the new one since it is at my house and the old one isn't... HAHA

[justbroke]

Well, if they take the wrong vehicle then that is theft. The repo man knows to always match the VIN number completely. Until the dealership speaks with and makes some deal with the lender, I don't know what more I could say. I'm assuming that you didn't get any "equity" in the old vehicle to apply to the new vehicle.

[98daffodils]

Right. My lawyer is sending the lender a letter today to let them know it is surrendered and is with the dealership. She suggested I call them too, but not sure if they will talk to me or not, but I will try that too. No, there was no equity exchanged. The dealer kept the old car because the new lender required me to leave the old one there to surrender (since they didn't want me paying two loans) which I don't get since it will be discharged... but that's why.

Supposedly the dealer sent the lender a certified letter but Bridgecrest still shows my account as active, current and payment due Aug 9. I assume that would have changed if they had received the letter.?

[justbroke]

It will likely not change until the lender gets the vehicle, it's repoed, and/or sold at auction. The lender doesn't know their loss until the vehicle is liquidate (sold). Until that happens, the account is open and active. At some point they may close it due to non-payment. I can't tell you how fast the lender will take an action to recover the vehicle and to sell the vehicle. Perhaps your dealership is very good at negotiating something with the lenders so that the lender does not need to repossess and send to the auction.