Here's a tricky question

[moneyproblems]

We have a loan that we are behind on, and just recieved a letter today- a "notice to cure default" (giving us 15 days to cure the default or they will begin to pursue legal action). The loan was originally secured by my husband's motorcycle, which was totaled in a trailering accident about 3 years ago. The insurance company wouldn't pay out on the bike because the guy hauling it (we found out later) wasn't insured. So is this loan still secured? The collateral for it has been turned into scrap metal by now, so how can they repo something that doesn't exist? We are meeting with our attorney next week and hope to file before the 15 days are up on this letter, so maybe it won't matter at all, but does anyone know the technicalities of this?

[CATCHMEIFYOUCAN]

I don't know .. but if I were the creditor or the person/business who loaned you the money .. I want my money, what you did or what happened with the property is on you .. thats just my opinion.

Catchmeifyoucan

Good Luck !

[ch13buyout]

This is not intended as legal advice. Please contact your lawyer for any legal questions you have.


If its scrapped, the security is gone. However, the creditor can stake a claim on any proceeds that may come in from a lawsuit or insurance. This would happen through the trustee.

But if you don't file bk, the creditor still has collection rights. So, its not going to disappear anytime soon.

[SinkingFast]

You really need to check out your State and/or Local Laws about the Law Suit process in your area.

With this notice to Cure, the Lender is warning you. You've got at least 15 days before things begin to escalate. How long you'll have after the 15 days before a Law Suit happens is anybody's guess. It could happen immediately or the Creditor could wait a while.

How you have to be notified depends on State or Local Laws. Could be the Creditor has to serve you formally via Certified Mail. Could be, all they have to do is run a notice in the local Newspaper. Something you may or may not see. It all depends on the proceedures established where you live.

One thing you do not want to do is be a No Show at Court. If you don't show, the Creditor gets a Summary Judgement against you. The Creditor could place a lien against your car, your home, or some other asset. If it appears to the Creditor that you have nothing to go after, they could ask for a wage garnishment or a banking institution garnishment.

[moneyproblems]

But since we're filing BK7, all of the collection efforts will be for nothing right? We are meeting w/ our lawyer on Thursday of next week, and when we told him about the letter, he seemed un-concerned and told us to direct any correspondance to him. We don't have anything of significant value that they can go after (we don't own our house, we live in a property that my mother in law owns) and the collateral on the loan is gone, so I guess it would be a pretty big waste of time for them to try to collect.

[SinkingFast]

With you filing BK, any money associated with the Law Suit is really nothing to worry about. You can just discharge it.

Have you talked to other attnys in addition to Consulting with this particular one?? Or is this the attny you've decided to go with??