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Ask WALLSTREETESQ Your Own Question
Category: Bankruptcy Law
Satisfied Customers: 17252
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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I am a creditor with a secured debt by collateral in the state

Customer Question

I am a creditor with a secured debt by collateral in the state of Georgia. I repossessed my collateral on October 26th 2010 and now I am being told that the debtor is going to file chapter 13 bankruptcy but I have already taken the commercial vehicle out of the debtors name and have put it back in my own name. I am not trying to go after the debtor for any more payments. Do I still have to give the vehicle back even if title is coming back in my name now before the Chapter 13 is filed?
Allow me to add that I am an individual who owns the collateral outright. Also the collateral is a tow truck that he used commercially but that I am using as a personal vehicle. I have sent a notice to the debtor that I intend to keep collateral and that I would not hold him to the contract. Additionally in the contract it was written that for any breach of contract, the debtor would voluntarily give up the collateral. Does this help you to answer the question?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 6 years ago.

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.


Since you have the vehicle already and he has not filed the chapter 13 the vehicle is yours, even id he files the bankruptcy he would have to pay your the payments owed as well as have you agree to reaffirm the vehicle which you do not have to. If he had filed it prior to you taking the vehicle that he could keep it by paying you the monthly payments.

Customer: replied 6 years ago.
I reposessed the vehicle 9 days ago. I have within ten days to let the buyer know what my intentions are. I am planning to send by certified mail on the 10 th day the fact that I am retaining the collateral and he has no further obligation to me. However, his attorney told me that I have to return the vehicle tomorrow and that they were going to send me the case number XXXXX email once it is filed. does what you say still apply with federal law and repossession law of the state of georgia?
Expert:  WALLSTREETESQ replied 6 years ago.

Section 542(a) states that an entity in possession of property "that the trustee may use, sell, or lease . . . shall deliver to the trustee, and account for, such property . . . unless such property is of inconsequential value or benefit to the estate., meaning if their is no equity in the vehicle that belongs to him, the trustee will not demand it back as the property cannot be used to pay his creditors. Also, an attorney requesting the vehicle back should be in writing and I would not return the vehicle unless the court orders it, where you can show that you are contractually allowed to keep the vehicle.


Also Georgia law does not allow for a request to be made for the return of the vehicle, as long as you followed proper notice requirements you are fine.


If the bankruptcy court forces you to return the vehicle advise them of the contract and state to them you are using the vehcile for your personal use and the transfer took place as per GA law.


In cases where a secured party in possession may, after default, propose to
retain the collateral in satisfaction of the obligation. Written notice of must be sent to debtor if debtor has not
signed, after default, a statement renouncing or modifying rights. In the case of consumer goods no other notice
need be given, but additional notice to certain holders of subordinate liens. If secured party receives objection in
writing from a person entitled to receive notice within 21 days after notice was sent, secured party must sell
collateral under Code Section 11-9-504. If no such written objection is received, secured party may retain
collateral in satisfaction of the debt. See Georgia Code Section 11-9-505

Customer: replied 6 years ago.
If notice is sent tomorrow (10 day) do I have to wait to put title back in my sole name for the response of 21 days? What is equity in the vehicle? The vehicle was sold to him under contract and he used it as a work vehicle in his business. He has only had the vehicle 2 months and made two late payments as well as shorting me one month late payment for the prior month with his last check. The attorney told me that because I accepted payment, I enforced the contract even though I had repossessed the vehicle for not only not paying on time, but finding the notary that notarized the contract has put her name on the title along with the name of the man's business which I gave no written authorization as required by the contract for any name other than his own to go on title. I need to know if I am wrong to transfer title to my name before he responds in the 21 day period. Chapter 13 is not filed as of now. but he has listed it when I am not going to hold him liable for the balance of the contract. Hope you can answer these questions. Thanks.
Expert:  WALLSTREETESQ replied 6 years ago.
you should not have put the title in your name without the 21 days notice, however even in a bankruptcy filing since their was a contract he would have to either pay you the entire amount every month in order to keep the vehicle. I would not return the car until the trustee of the court states you have to and if he does, remember if he misses one payment you can take the vehcile back.
Customer: replied 6 years ago.
Can I opt not to reaffirm the contract per your prior response and call for payment in full of the contract and give him the opportunity as well to walk away without any obligation to me in the same certified letter? I asked as if I had already started to put the title in my name but that is not the case as I just had the paperwork to do it and have not been to the tag office to file. Also if it gets to far, can I ask the trustee not to reaffirm the contract and call for payment in full. Sorry about the misunderstanding on the title issue which has not been done yet, I just pulled the paperwork to do it.

Thanks, XXXXX XXXXX answering me.
Expert:  WALLSTREETESQ replied 6 years ago.
yes, you can do this however, it wil be up to the trustee to accept it. You need to show the trustee the contract and I believe he will let you have the vehicle. Send the notice letter as soon as possible so you are protected.