Trustee asked for title...question

[DesdemonaB]

Ok
So my trustee asked for the title for my 2002 Dodge Grand Caravan, I have a lien on the vehicle so I don't own outright, I do not plan to reaffirm - I spoke with lienholder saying I plan to make up all past due payments in January then I plan to pay till I can get a better car.

So it just hit me, if the trustee takes my title - what if by some fuke I end up keeping the car, and paying it off (not likely) - how would or could I get the title back?

I guess the bigger question is why would she ask for a title of a vehicle I don't own?

[despritfreya]

When did you incur the debt on the vehicle? When was the lien placed on the title? Sounds like the Trustee is going to investigate to see if the lien was properly perfected prior to you filing bk. If it was not properly perfected the Trustee will avoid the lien.

In the alternative, is it possible that there is equity in the vehicle over any allowed exemption even considering the balance owed?

Des.

[dneil]

what does it mean when you say "avoid the lien"..... meaning if it wasn't properly perfected, the lien on the vehicle will be released? I am confused (as always).... and what is sad is that this is probably a really stupid question. Please, enlighten me

[despritfreya]

If the lender did not properly record the lien the lender will be deemed an unsecured creditor. Lenders sometimes screw up. There was a recent post where this is exactly what happened.

The issue with the timing of when the lien is put on the title arises when a debtor tries to protect an unsecured creditor (usually an insider) by allowing the creditor to place a lien on the title to an otherwise unencumbered asset sometime after the loan was taken out - thus moving the creditor from unsecured to secured status. If the creditor was an "insider" (typically a family member) and the lien was put on the title within 1year prior to filing, it becomes a voidable preference. If the creditor was not an insider, the window is 90 days prior to filing.

So, my questions to OP are as follows:

1. Is the lien holder a friend or family member or an institutional creditor?
2. When did you take out the loan?
3. Was the loan for the purchase of the vehicle and, if so, when did the lien get placed on the title in relation to when the loan was taken out?
4. If the loan was not for the purchase of the vehicle, when was the lien placed on the title in relation to when you took out the loan?

Des.

[DesdemonaB]

Ok wow; let me try to answer the questions in order...

When did I incur the debt?... August 2010 – I had a vehicle, paid on time, got into an accident the vehicle was totaled, vehicle paid off but left me vehicle less. Poor credit scores, bah, bah, bah left me with taking what I could get at the time.

Financed via Credit Acceptance Corp – August 2010. The title is in the name of Credit Acceptance Corp.

No there is no equity in the vehicle.

I am not avoiding a lien; I know I don’t own the vehicle.

[despritfreya]

When did I incur the debt?... August 2010. . .Financed via Credit Acceptance Corp – August 2010. The title is in the name of Credit Acceptance Corp.
No there is no equity in the vehicle.

Sounds like you will be fine and, if you sent the original title, the Trustee will simply return it to you. Call the Trustee after the holiday to find out the status.

Des.