Car loan discahrged in chapter7 BK , can I sell the car now?

[RickSanchez]

My chapter 7 BK was discharged last year. I had a car loan worth $12K that was included in the discharge. Lender offered me papers to re-affirm, but I refused per lawyers advice. I have been paying every payment on time and lender has no problem with it.
The issue is this: the car was originally titled in a different state, but a few weeks before discharge I transferred the title to NY. New York issued me a new title with no leans on it. It says " NO LEAN RECORDED".
Does this mean that I actually have no lean on this title? If so, how is that possible? By the way, BK happen in NY.

What would happen if I tried to sell this car?

[dneil]

is the loan paid off?

[RickSanchez]

is the loan paid off?

No, I am still paying it.

[dneil]

I would double check with your attorney. You don't have in your possession a release of lien that the bank usually will send you... so I am not sure how things would play out if you sold the car. But then again, that debt has been discharged and on the agency you owe a zero balance. It could become a sticky situation, but maybe this is your lucky day, eh???

Wait and see what others think...... ah, heck.. call your attorney and see what their advice is.

[RickSanchez]

I would double check with your attorney. You don't have in your possession a release of lien that the bank usually will send you... so I am not sure how things would play out if you sold the car. But then again, that debt has been discharged and on the agency you owe a zero balance. It could become a sticky situation, but maybe this is your lucky day, eh???

Wait and see what others think...... ah, heck.. call your attorney and see what their advice is.

I am done with the attorney. They won't help you much after BK . I tried asking them an unrelated questions a few months after BK, and they didn't help.
If the state of NY issues you a title with no lean, does that pretty much mean that there is no lean? That's the question.

[dneil]

The last title you had, had a lien but this one shows no lien? What state did you move from??

[tcreegan]

Hi Rick,

If your NY title doesn't show the lienholder, the NYS DMV made a mistake. Unfortunately that doesn't make the vehicle loan go away. The vehicle is still collateral on the loan. Stop paying or sell the car and don't pay off the loan, the lender is entitled to retrieve their collateral. I imagine the guy you sold the car too won't be too happy when the car gets repo'd....

Tom in Colo

[RickSanchez]

The last title you had, had a lien but this one shows no lien? What state did you move from??

Nebraska.

[RickSanchez]

Hi Rick,

If your NY title doesn't show the lienholder, the NYS DMV made a mistake. Unfortunately that doesn't make the vehicle loan go away. The vehicle is still collateral on the loan. Stop paying or sell the car and don't pay off the loan, the lender is entitled to retrieve their collateral. I imagine the guy you sold the car too won't be too happy when the car gets repo'd....

Tom in Colo

How sure are you about this? The whole reason they put a lean on the title, is to prevent you from selling it.

Is it possible that because I transferred during the bankruptcy process, the state looked and found no lean hence they put no lean.
I am actually thinking of selling the car overseas, so I don't believe there will be a problem for the buyer.
I am just wondering if the border control will give me any issues. The new title is all legit, so I can't imagine any issues. I am just perplexed how I ended up with no lean on it.

Anyone else had an experience like this?

[AngelinaCatHub]

Not at all!

Hi Rick,

If your NY title doesn't show the lienholder, the NYS DMV made a mistake. Unfortunately that doesn't make the vehicle loan go away. The vehicle is still collateral on the loan. Stop paying or sell the car and don't pay off the loan, the lender is entitled to retrieve their collateral. I imagine the guy you sold the car too won't be too happy when the car gets repo'd....

Tom in Colo

Yes my friend, you may do with it what you want. BUT, you have to live with yourself. You just got out of a real stressful situation, how much more stress would you heave upon yourself? Do you wish to have your bk reopened by an Adversary Procedure? What you are considering is Fraud after the fact. Not right in any case.

The best you would do is just drive it until something happens, and if not, drive it till the wheel fall off. Karma is a B*tch, and you really don't want to upset her. My opinion. 'Hub

[dneil]

Well Rick... the answers you got are from people who really know their stuff. I wouldn't sell the car if I were you. If you don't want it, either walk away from it or sell it and pay off your loan.

Good Luck to you

[RickSanchez]

Yes my friend, you may do with it what you want. BUT, you have to live with yourself. You just got out of a real stressful situation, how much more stress would you heave upon yourself? Do you wish to have your bk reopened by an Adversary Procedure? What you are considering is Fraud after the fact. Not right in any case.

The best you would do is just drive it until something happens, and if not, drive it till the wheel fall off. Karma is a B*tch, and you really don't want to upset her. My opinion. 'Hub

NO, as I said I am thinking of selling to a person outside of the country. I don't think it's even possible to do what you are suggesting as the buyer has ways to remedy the situation.

Has anyone had a situation like mine?

[AngelinaCatHub]

NO, as I said I am thinking of selling to a person outside of the country. I don't think it's even possible to do what you are suggesting as the buyer has ways to remedy the situation.

Has anyone had a situation like mine?

Well, you did not state this in your thread. The ONLY remedy, is to pay off the whole mortgage and then he can ship the car where he wants only when it falls into his name. That is not what was presented to us (the forum). 'Hub

[Wantmypeace]

This sounds really dangerous to me. In the bk process, you either continue to pay the loan, and they let you keep the car, or you stop, and they take it back. The law says that they have that right. I'm thinking that just because someone messed up the paperwork between Nebraska and New York, it's still dangerous to stop paying and not give the car back. I think if you want to sell it, you should call the lien holder (I'm assuming you know who that is/was), and ask them how much they'll take to release the lien. If they say there's no lien, then okay, there's no lien, but I'm guessing there is and the DMV simply made a mistake. I wouldn't risk it, either.

Just my 2 cents.

[tcreegan]

Hi again Rick,

Don't rely on the NY title, the DMV vehicle registering process is separate from the contract between you and the lender. You're right, the DMV puts the lienholder on the title so you can't sell a vehicle with a lien on it to some unsuspecting schmuck. (which you are planning to do) But that is a consumer protection rule (which you probably violated). The DMV doesn't establish the lien, the loan contract does.

What I see in my crystal ball....you stop paying the loan and don't pay it off....after a month or two the lender wants the car back...you don't have it...they can't get a judgment b/c you didn't reaffirm...so they sue you for fraud or auto theft...put you on the stand where you will have to tell the court where the car went...win their case b/c you sold a car that didn't belong to you, it belonged to them...

Ontop of which, you would be sending what is essentially a stolen car over the border...

There are a dozen ways this can come back to bite you in the posterior....not worth the risk..

Tom in Colo