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Ely
Ely, Counselor at Law
Category: Bankruptcy Law
Satisfied Customers: 101534
Experience:  Licensed attorney in private practice.
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I filed Chapter 7 in March of this year. I have a truck

Customer Question

I filed Chapter 7 in March of this year. I have a truck financed in my name that my son is paying for as he uses it. He blew a spark plug out of the head of the engine and it now requires a new head at the cost of $5,000.00 which is almost what the truck is worth. I never signed a reaffirmation agreement, can I now take this back to the bank in its current condition and stop making payments?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Ely replied 1 year ago.

Hello and welcome to JustAnswer. Please note:This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

When one files Chapter 7, one's personal liability on dischargeable debts is extinguished. This includes vehicle financing. However, the lender still has a lien on the vehicle that is not affected by the bankruptcy. What this means is that the lender can still repossess the vehicle, but it cannot sue the owner personally for the balance of the loan.

Reaffirming helps to ensure that the lender will not repo the vehicle, but makes the owner liable for it again, and if the owner fails to make payment, they may be liable for it.

Herein, even if he is driving the truck, your name is ***** ***** mortgage. If it is not reaffirmed, then it may be repo'd (voluntarily or not) if payments are missed, but the person on the mortgage (i.e. you) may not be sued for it, assuming that the lender is added to the list of creditors.

So yes, assuming no reaffirmation has happened, one can simply voluntarily repo the vehicle by bringing it to the lender, and arguably not be liable for it.

I hope this helps and clarifies. Please use the SEND or REPLY button to keep chatting, or please RATE when finished. You may always ask follow ups at no charge after rating. Kindly rate my answer as one of TOP THREE FACES/STARS and then SUBMIT, as this is how experts get credit for our time. Rating my answer the bottom two faces/stars (or failing to submit the rating) does not give me credit and reflects poorly on me, even if my answer is correct. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith with a positive rating.

Expert:  Ely replied 1 year ago.

Hello again. This is a courtesy check in to see if you needed anything else in regards ***** ***** question. I am simply touching base. Let me know. Thanks!