Creditor has filed Motion for Relief From Stay for my car loan -- what next?

[FortHoodTX]

I couldn't find my exact situation on the forum anywhere. I stopped making car payments a few months ago. After several collections calls, she gave me the ultimatum. Either I make a payment arrangement or they're going to have to come get the car. I told her I couldn't. "Do you want us to come pick up the car then?" and I said "Go ahead." So basically, this went on the books as a voluntary surrender. They picked up the car before I filed BK. I only "voluntarily surrendered" it because I was so behind on payments— they gave me no choice in the matter.

I filed Chapter 7 two weeks ago. Today I get paperwork from the attorney of the car loan company, Motion for Relief From Stay. In the paperwork it says "The debtor surrendered the vehicle. Therefore, this constitutes cause for lifting the stay." Based on the paperwork, that seems to be the only leg they are standing on.


I am going to speak with my attorney tomorrow, but has anyone else experienced this litigation during BK after you've already surrendered the vehicle? So basically, are they trying to collect the $23k I technically owe? Or the depreciated value? What can they even take? All of my property was exempted in the BK filing and I think it's quite obvious that I have nothing to give them.
They haven't even sold the vehicle yet. I'm just panicking because I filed BK to get relief from this car loan, gave it back to them, and they're obviously still out to get me.

[AngelinaCat]

I don't have your exact situation either, but here is what happened with us:

'Hub foolishly co-signed a car loan for an acquaintance "down on his luck". [We are suckers that way.] All was fine until the acquaintance defaulted, and we started getting the letters and phone calls. At that point, 'Hub made this person surrender the car. Both 'Hub and this guy were sued for the difference between what was owed on the car loan, and what the car brought at auction, $13,000.00. We filed BK, and the acquaintance did not. The $13,000.00 was discharged for us, and the acquaintance has a judgment on his record for $13,000.00.

So this was a voluntary surrender for 'Hub. At no time during our BK process, also a CH7, did the lender attempt a lift of the Automatic Stay. I believe that this lender is in grave error attempting to do this to you AFTER you have already voluntarily surrendered the car.

I will be interested in learning what your attorney has to say about this. Good luck!

[despritfreya]

This is not something you need to worry about. The lender MUST get the stay lifted before it can proceed with disposing of the car. Your pre bk surrender of the car does not mean the lender can liquidate it after a bk is filed without first getting bk court permission. The asset is still titled to you therefore it is still an asset of the estate and any attempt to dispose of it would be a violation of the stay.

Now, had the lender gotten rid of the car before you filed bk, a Motion would not have been necessary.

Rest assured that the lender is not attempting to seek money from you.

Des.

[FortHoodTX]

This is not something you need to worry about. The lender MUST get the stay lifted before it can proceed with disposing of the car. Your pre bk surrender of the car does not mean the lender can liquidate it after a bk is filed without first getting bk court permission. The asset is still titled to you therefore it is still an asset of the estate and any attempt to dispose of it would be a violation of the stay.

Now, had the lender gotten rid of the car before you filed bk, a Motion would not have been necessary.

Rest assured that the lender is not attempting to seek money from you.

Des.

Thank you so much. This makes PERFECT sense.. that's why when I was reviewing my Petition and Schedules, it lists the car under my assets even though I don't have possession of it anymore. And yes, it is true that they haven't sold it yet. I guess it made sense for them to pay $176 to file this motion instead of waiting 3-4 months until this BK is discharged, so they can get the most for my vehicle now.

Instead of making a panicked visit to my attorney, I'll be able to take a more calm approach now. Thanks!

[AngelinaCat]

Thanks Des! Yes, that is logical, and makes good sense.