Surrender of vehicle - CAN I do it before 341?

[sh9730]

I have 2 cars....in my SOI I said one of them I planned to reaffirm (though I wont in the end), and the other I would surrender.

I TRIED to have the vehicle voluntary repo BEFORE filing this week, but my ex girlfriend had possession of the car in another state, and CAP ONE didnt want to go get it from her location as they deemed that NOT a voluntary repo since I was not there to hand off the keys etc. and I was not behind enough on the payments for them to involuntarilly repo it at that point. I am the sole name on the loan.

I tried to explain to them that I was filing CH7 and that the stay would go into effect, but the stupid guy at Cap One said they would still be able to get the vehicle anytime.

SO, now Im filed....my ex is ready to surrender the vehicle cooperatively, but NOW what I seem to read is that Cap One dude was wrong and I CANNOT SURRENDER until the 341 hearing as the trustee needs to confirm that there is no value in the vehicle unless they file a motion to lift, which still wont happen until at least the 341. Is this correct?

If so, I might as well let her keep it a little longer since my only cost will be another month of insurance.....right? I would rather have it out of my hair, and could just tell her it needs to be surrendered now (she is not wise in the ways of BK),but I dont want her to just leave it on a corner somewhere until next month? (She doesnt want to surrender it at her house because of neighbors etc..).

SO, can I give this back or not?

[tripbuddy]

Hmmm...interesting question. I tried to voluntarily surrender my car the day before filing ch7, but the finance co wanted a case#. So I filed, then called back. I wanted to drop the car off at the dealership or something. Well, they wouldn't let me..they told me someone will call in 1 1/2-2 weeks to pick the car up. No word about not being able to take it off my hands till after the 341. So either you are incorrect, or my finance co. and yours both are.

[despritfreya]

You can contact the lender and make arrangements for the surrender. Waiting for the 341 is not necessary. I always request that my clients make such arrangements within 30 days after filing.

Des.

[sh9730]

Thank you Des....interesting that other blogs out there in the internet world say that once filed, the car is then property of the estate and cannot be surrendered without trustee approval (which typically happens at the 341), again because he has to confirm the fact that there is no equity that he can take in the vehicle. Some of the articles say that the lenders send a representative (Im sure a tow company) to the 341 and then they surrender at that time since they know the debtor will be there...

But thanks....I will contact Cap One on Monday and see what they say...

ETA: Some of the articles also say that even though the collateral is being surrendered, they still have to request a Motion to Lift Stay - seemed wierd to me - except I sort of understood the logic of the trustee needing to make sure there was no value in the vehicle - hence avoiding preference issues - but even then he could always go back to the lender and get the proceeds from any sale.

[despritfreya]

@sh9730

You raise a valid point with the issue of "preserving the estate" however, I can tell you that in 23 years of doing this I have only had 1 occasion where a Trustee questioned the surrender. The vehicle did have some equity (we were not claiming the exemption in it). I told the Trustee to contact the lender as such was not my client's problem. And, yes, while the collateral may be surrendered the lender cannot dispose of it until the stay is lifted and the asset is abandoned.

Des.

[sh9730]

Des,

Thanks....I will contact Cap One on Monday and try and surrender. All they can do is say they have to hang up on me, right? LOL

Would also LOVE any (short is fine) input you could give on my other post here (titled - Let me ask this ? - its a few posts down) regarding whether I should contact my Mortgage lender pre-discharge or wait and see if they file a MLS first before I do anything - of course dont post the answer on this thread - too confusing already!

As many others here have said, thank you so much for your input. I like my attorney, but he is not very verbose sometimes and tends to just say "nothing to worry about", which is probably true....but I like to know WHY I dont have to worry!

[btbeme]

Des,

....but I like to know WHY I dont have to worry!

Knowing "why" is an admirable quality, but it will drive you crazy in the jacked-up twisted logic upside-down world of BK. That being said, finding out "why" and understanding "why" gives you the ability to post in these forums to help others later!

[sh9730]

So, here is the latest on THIS part of my journey - Cap One hires an outside entity (Ascension Capital) to move forward on the paperwork to surrender. Then once approved, they contact Cap One to actually repo the car (voluntarilly or otherwise). BUT, 3 weeks into my CH7 and with my in almost daily contact with Ascension (had my attorney sign a letter with my intent to surrender etc) they have now told me that (as I wondered earlier in this post) that they WILL NOT accept a surrender until after my 341 hearing AND a ruling of no asset/no distribution. They ARE apparently worried the trustee may consider it part of the estate so will not get it until then....they also say that since there was a delay in the title to the vehicle being perfected (I bought the car on 12/28/10 and they didnt get title issued until 2/10/11) that the trustee may have issues with that for some reason.

Bottom line is they will not get the car until after my 341 in June....so....now I need to keep it insured etc for another month at least!

Nothing ever easy....