We took out a "personal loan" in CA for approx. $12,000 over 1 year ago. The personal loan funds were utilized to purchase a friends used vehicle for our daughter, and about 8 months ago vehicle was sold. DMV title-transfer of ownership from "us to the new buyers and their lender completed months back."
We're 100% current on the personal loan monthly payments. However in reading all the fine print and contacting the bank for the personal loan, the vehicle purchased was initially to be used as collateral. The bank calls it a "personal loan, secured by collateral." The original bank documents indicate that the title to the vehicle purchased was to have their bank name, address listed as the lienholder. However, this never happened by the bank, nor by us either. Title was only in our name, no lienholder. Bank says they failed to add themselves as lienholder, we should have done it.
We have already filed for Ch. 7 bankruptcy, lender was already notified too. Lender's BK dept. indicates for us to keep making the payments to them, timely manner. We've never missed a payment, on the personal loan. In speaking with the banks BK Dept. we did not notify them the vehicle was sold months back, nor did they ever ask. Their BK dept. said online access was cut off, do to the BK filing. Yet, for us to send monthly payments to their BK dept., and the address was provided.
The debt is being discharged through the BK 7. Yet, if we stop making the payments on this CA loan then what? Title was never in the banks name, we sold the vehicle, discharged through BK. At this point what options, rights does the bank posses? Or, in good faith should we just continue making the payments even though collateral sold, that the bank never had title to?
We're 100% current on the personal loan monthly payments. However in reading all the fine print and contacting the bank for the personal loan, the vehicle purchased was initially to be used as collateral. The bank calls it a "personal loan, secured by collateral." The original bank documents indicate that the title to the vehicle purchased was to have their bank name, address listed as the lienholder. However, this never happened by the bank, nor by us either. Title was only in our name, no lienholder. Bank says they failed to add themselves as lienholder, we should have done it.
We have already filed for Ch. 7 bankruptcy, lender was already notified too. Lender's BK dept. indicates for us to keep making the payments to them, timely manner. We've never missed a payment, on the personal loan. In speaking with the banks BK Dept. we did not notify them the vehicle was sold months back, nor did they ever ask. Their BK dept. said online access was cut off, do to the BK filing. Yet, for us to send monthly payments to their BK dept., and the address was provided.
The debt is being discharged through the BK 7. Yet, if we stop making the payments on this CA loan then what? Title was never in the banks name, we sold the vehicle, discharged through BK. At this point what options, rights does the bank posses? Or, in good faith should we just continue making the payments even though collateral sold, that the bank never had title to?
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