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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 9680
Experience:  Licensed to Practice Law
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I filed Ch 7 last Jan and am nearing Discharge My BK atty

Customer Question

I filed Ch 7 last Jan and am nearing Discharge
My BK atty referred me to car dealership that accepts BK clients (and that made many errors during the loan transaction causing three loan documents to be signed and my registration to be late) and I got a new Versa prior to the creditor hearing .......but the Trustee now has hired a law firm to investigate my car loan and possibly sell my car from under me!
My BK atty has brushed me off saying he had no idea this would happen. That I need to probably go out and find another bank to finance the car now. Basically I need to shoulder the whole dealership mess and handle the issue with all kinds of legal documents coming to me from the law firm the Trustee hired!
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 1 year ago.
Hello and thank you for allowing me the opportunity to assist you.

What is the trustee's claim on the car?

Also, how did you purchase the car?

Last, what legal information are you seeking? I'll be glad to help if I can, but I'm not sure what you'd like to know.
Customer: replied 1 year ago.
Thank you.
I bought the car new and have a car loan. (Referred by my BK atty and trusted him of course). I need an atty to advise me about all my legal documents I'm receiving from the law firm the Trustee hired.... I'm told the Trustee might want the car for its value and sell it to distribute amongst my creditors. I need some support and advice! My own BK Atty isn't taking any responsibility and the car dealership has messed up so much I can't trust them. I'm broke and now it looks like the Trustee isn't going to allow my car loan to stand. I'm the lady who's in the middle here and have no say in anything it appears nor can I trust anyone.
Expert:  TJ, Esq. replied 1 year ago.
Hi again.

Do you know the answer to the first two questions I asked?

The trustee would not ordinarily have a claim on the new car for three reasons. First, you presumably did not purchase the car with funds that belong to your bankruptcy estate. Second, the car is probably worth less than what is owed to the lender. Third, you purchased the car post-petition.

So I need to understand what the trustee is claiming.

Can you summarize what the legal documents state?
Customer: replied 1 year ago.
The car was purchased prior to filing---- per my BK atty who said it would be ok to do so.. My old car was included in the BK (a lease) and I needed a car.
document #1: application to employ the law firm by trustee
Document #2: complaint. Debtor - my name. plaintiff - Trustee name and Defendant is the Nissan Motor Credit Acceptance Corp
Document #3: trustees verified motion to extend stay with respect to vehicle for determination that vehicle is of consequential value to the estate and shall remain the property of the bankruptcy estate and for turnover of vehicle pursuant to 11 USC 362h2 and 521a6
Expert:  TJ, Esq. replied 1 year ago.
Hi again.

You wrote: "The car was purchased prior to filing"

Response: Okay, now I see why you have a problem. All property owned prior to filing for bankruptcy which is not exempt is property of the bankruptcy estate. However, if the car does not have equity (i.e., the loan is more than the car is worth), then there is nothing for the trustee to go after. But if the car has equity that was not exempted, then the trustee can sell the car, pay off the loan, and distribute the remaining funds to unsecured creditors.

Is the car worth more than the car loan? What money did you use to buy the car?
Customer: replied 1 year ago.
First the car was purchased with $0 down pmt and a 5% rate because my credit was excellent. Then there were THREE new loan documents created for me to sign due to errors so the car wasn't ready for registration until this year! And we filed the case also in January.

Nissan kept returning the loan documents to the dealer, finance mgrs were fired, my loan has been a big thorn in the side of the dealer.

The car was sold to me for $22k and its worth probably $12k. They added into the loan a LoJack Security System and told me it was included with the 2012 Nissan Versa.
Expert:  TJ, Esq. replied 1 year ago.
Hi again.

If your car is worth $12k, and your loan is for $22k, then I don't think you have a problem. The trustee can't sell the car under those circumstances because all of the proceeds from a sale would go to the lender.

If I were in your shoes, I would let the trustee conduct his investigation, let him get the vehicle appraised, and when he finds that the vehicle is worth less than the car loan, he'll drop it.

The botXXXXX XXXXXne is that from what you've stated, there shouldn't be a problem. My one concern is that I wonder why the trustee is going through all this trouble if it's so clear that the car is worth less than the loan. Were you given no indication why?
Customer: replied 1 year ago.
Those Versa's are little 4 cyl manual shift economy cars worth maybe $15k max and the dealer wrote a 6 year loan with $364 month pmts. $22k loan. Now the car is 4 months old with 4000 miles on it so its worth much less than $15k. Probably $10k.

My atty just said to look for another bank to finance the car. The dealer rep. has told me it probably will be just fine. I'm feeling pretty alone with no atty to help me or support me.

The trustee is evidently hiring this law firm to go after Nissan Credit Acceptance?? Is that possible? I'm not being told anything that makes sense and therefore I'm having to pay you online. Lol.ūüė°
Expert:  TJ, Esq. replied 1 year ago.
Hi again.

I don't know why the trustee would go after Nissan Credit Acceptance. If you had made a large downpayment and overpaid for the car, then I suppose it's possible that the trustee could argue that there was some sort of bankruptcy fraud because with a large downpayment, there should be equity in the car. But that's not the case here since you didn't put anything down. Even if you hadn't overpaid for the car, and instead just paid what it was actually worth, there wasn't going to be equity for the trustee since you put nothing down. The moment you drove it off the lot it probably lost $3k in value.

The one thing it could be is the problem with the loans. Perhaps the trustee is going to argue that the dealer screwed up in getting a lien on the car before you filed for bankruptcy, and therefore the debt to the dealer is actually unsecured. If that is what occurred, then the dealer may be in bad shape. It wouldn't likely affect you because the car loan can be discharged (except that you will now need to buy a new car). But the trustee, in those circumstances, would have an argument that the lien was not properly recorded before you filed, and that the car is property of the estate and the loan is unsecured. The more I think about it, this makes sense because of the problems you had with the loan. But in this scenario, the worst problem for you is just getting another car.

Does that help? Please let me know if you need further clarification, as I am happy to continue assisting you. But please understand that because of the late hour, I am logging off soon. If you need further help, then feel free to respond, but please allow until tomorrow for a response.

Thank you for using our service!
Customer: replied 1 year ago.
That's a big problem because I can't get another car unless I get one with no down pmt again through a dealer like that dealer. And since I'm at no fault in all this its wrong that I'd be out in the cold with no car and no longer have a BK Atty to refer me.
Expert:  TJ, Esq. replied 1 year ago.
Hi again.

I think that you need to talk to your lawyer and at least ask him to explain the problem to you to determine how it affects your bankruptcy. Will your attorney at least do that (even if he's unwilling to help resolve the problem)?
Customer: replied 1 year ago.
I have spoken to him and he has copies of all the documents. He's not concerned and seems to think I might just need to find another place to finance my car. He's rather blase' about it really. I guess I need to just wait and see. I'll get another car if the Trustee does take this car. It looks like dealers are eager to sell cars to BK clients.

Thank you!
Expert:  TJ, Esq. replied 1 year ago.
Yes, there are other dealers who will work with people who file for bankruptcy. I'm sure you will be able to find something if the trustee takes the car. I truly wish you the best, XXXXX XXXXX appreciate you using our service. Please let me know if there is anything else I can do for you so that you are satisfied. Thank you!
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 9680
Experience: Licensed to Practice Law
TJ, Esq. and 3 other Bankruptcy Law Specialists are ready to help you
Customer: replied 1 year ago.
Thanks!!!
Expert:  TJ, Esq. replied 1 year ago.
You are quite welcome. Thank you for using our service!

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