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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31683
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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My chapter 7 bankruptcy was discharged a few months ago (without

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My chapter 7 bankruptcy was discharged a few months ago (without any restrictions, i.e. none of the creditors secured or unsecured appeared at the creditors final hearing), however, when I recently traded in my truck at the dealership where I work, to get into a lease of a new car, apparently the lienholder for the truck is not willing to return the Title. My question is how to I get the Title back, so that I can complete the lease transaction?
Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney. Thanks for your question.

Was the truck debt discharged through the bankruptcy or did you reaffirm the debt?
Customer: replied 4 years ago.

It was discharged through the BK, the debt was not reaffirmed.

Ok. Thanks.

If the debt was not reaffirmed, that means you are no longer responsible for the debt - - but the debt is still there, and the lender still has a lien against your truck.

Thus, as long as the debt/lien is still outstanding against the truck, you can't sell or transfer the vehicle's title. Also, because of the discharge, the lender doesn't have to release the title. Instead, the lender has a right to recover its truck at any time.

Usually, the lender does this before the bankruptcy is completed, but it doesn't have to.

The botXXXXX XXXXXne is that you can't trade in the vehicle without the lender's permission. IF you are being paid enough in the trade to pay off the debt owed to the lender, then it is likely to accept the money and release the title. However, if the trade will not pay off the lien, the lender is not going to agree to it.

Thus, you can't do anything with the lender's vehicle without its permission or cooperation. Even though you don't owe the money due to your discharge, the lien against the truck is still there.
Roger and other Bankruptcy Law Specialists are ready to help you
Customer: replied 4 years ago.

Kirk, I went to the local DMV office yesterday, and explained the situation, and they gave me a little different take on my situation. If I send a formal letter with a copy of a DMV lien release form to the secured creditor, then they can still ignore my requests; however, if they do, then the DMV officer explained that I can get what is called a "Title Bond" from my insurance company, and I can bring back the receipt from the certified mail to the DMV, and they will issue a duplicate Title. Thanks, XXXXX XXXXX

Hi -


I'm not aware that the DMV has the legal authority to remove the lender's lien against your vehicle and it's title. If the DMV gives you a duplicate title - - the "duplicate" should be an exact copy of the original, which would show the lender as the first lienholder.


If the DMV were to give you a title without showing the lender as lienholder, it would not be a "duplicate". Even if it did, that would not erase the lender's lien and it wouldn't prevent the lender from filing a replevin against you for the vehicle.


Also, if you sell mortgaged/lien encumbered property and do not pay off the lien,

it can be considered criminal fraud.


The lender isn't likely in a big hurry because under California Code of Civil Procedure § 337, the statute of limitations for debt related to a written contract is four years. Thus, the lender has 4 years to recover the vehicle/sue you for the debt. Also, the time you were in bankruptcy doesn't run against the statute of limitations because of the automatic stay.


Again, I'm not familiar with any procedure that would allow the DMV to remove the lender's lien against your vehicle/it's collateral. I hope this helps.