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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2815
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I have 9 months left on Chapter 13 and want to sell my vehicle

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I have 9 months left on Chapter 13 and want to sell my vehicle which was included. Vehicle is 2001 Kia Sportage w/100,000miles +, needs master cylinder, new brakes, etc. Paperwork from Trustee indicates that the secured portion owed to GMAC is paid off. Then, there is an unsecured portion to GMAC still owing $1400. Title still has GMAC as lien holder. What do I need to obtain clear title to vehicle so I can give/sell it?
In order to sell the vehicle, you would have to pay off the balance of the debt. Now, be careful, as there may have been a cramdown, whereby you only had to pay a percentage of the unsecured balance, so $1400 might not be the true payoff to the creditor outside of bankruptcy. GMAC won't release title until the debt is satisfied through your case and you obtain your discharge unless you pay off the contract balance.

You need permission to sell if you want to during your case, and the trustee/court usually would want you to pay the proceeds to the case. Your attorney can ask for a certain amount be set aside if you need another car, so talking with your attorney about this would be best.
Customer: replied 7 years ago.
In other words, both the secured and unsecured balances due GMAC must be paid off. That is somewhat confusing because I don't understand how they could divide the loan into secured and unsecured portions.
In a bankruptcy, you can get a better deal and can sometimes pay the unsecured portion as low at 10% of that balance. If you complete your case, you wouldn't need to pay off the discharged portion. Only when you try to sell during the case, does it become an issue.
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