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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2897
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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My question has to do with verbal contracts.I am in possession

Customer Question

My question has to do with verbal contracts.I am in possession of a car that I have been making payments on for eighteen months.my friend was going to have the car reposesed because he could no longer make the payments.I agreed to give him the money to make monthly payments and I have done so for the last year and a half as afore mentioned.now he finds himself having to declare personal bankruptcy and tells me that the finance company wants the remainder of the loan paid in full.the whole time I was making payments I kept demanding that we have some type of agreement drawn up,but he would never do so.now he wants me to turn the car back over to him so he can give it back.his bankruptcy isn't final,no notice has been listed in the newspaper.can I attach a lien to his bankruptcy since he failed to preform his part of the contract and get my 10,787.00 dollars back.especially since my partnership is going to file and not me personaly?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 6 years ago.

Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

Tough case here.

Terry L. :

First of all, you take subject to the lien by the lender on the car, so if you recorded a lien on the car, you would be 2nd in line.

Terry L. :

If he files bankruptcy, any claim of breach of contract, whether verbal or written, would be a debt he can discharge in the bankruptcy.

Terry L. :

Unfortunately, there is no code section you could attack the dischargeability of the debt on, unless you can prove fraud in a written contract, so, if only verbal agreement, I would say you can be out of luck.

Terry L. :

Since his case is filed, you cannot sue him on any claim, without obtaining court permission to do so, and unless you can prove the debt should be non-dischargeable, which I don't think you can, i think your only option is to see if you can either pay off the balance to the lender, or negotiate with the lender to purchase the vehicle.

Terry L. :

It is unfortunate that this happened, but I don't see any recourse you would have.

Terry L. :

You can discuss the matter with a local bankruptcy attorney, but it may be an uphill battle.

Terry L. :

and a losing effort at that. I wish I had better news for you

Terry L. :

Thank you for your question, though, good luck. PS the code section that would be your best chance is here: http://doney.net/bkcode/11usc0523.htm

Terry L. :

section a(2)

Terry L. :

good luck