auto secured loan

[bankit]

What is the name of your state? iowa
I bought a car from a business that I knew. I signed a loan agreement for the purchase, since I did not have all the money. I transfered the title into my name, but did not list them as lien on the title. I did have them listed on my insurance as loss payee. The vehicle had some problems and they gave me time to pay them, since I had to pay for repairs. I have now filed bankruptcy and listed them as secured loan. I also let them know that I would make regular payments to them.

My question: Is it going to matter to the trustee that I don't have them listed on the title, even though it is secured on the contract. I did not exempt the car since it had more due yet than the value of the car, but in the statement of intentions I noted to retain and perform. I am just worried that there might be a problem and these people helped me finance the car when I needed a vehicle.

Thank you!

[Ladynred]

Is it going to matter to the trustee that I don't have them listed on the title, even though it is secured on the contract.

If there is no lien recorded against the title, there is no 'security' at all. Its the LIEN that entitles a lender to repo the vehicle should you default. No lien - no security.

[bankit]

I have just filed. Can I surrender the vehicle back to the business or can they add thier lien to the title?

[Ladynred]

If you decide to give it back and discharge the debt then you'll be free of it with no liability.

Recording the lien now would look bad and I think it would have had to be recorded at least 90 days prior to filing anyway.

[bankit]

Lanyard,
Thanks so much for your replies. One last question.

Would it also look bad or possibly get taken by the trustee if I redeemed it. My family said they might be able to help me out with some money if I can get them to decrease the loan amount to what the current market value is. Or is the cleanest way just to surrender.

Also if I can redeem the car, Should I have my parents gift me the money and then I pay the loan. Or can they pay the loan directly for me?

Thanks again for your replies and thanks for all your time spent on this forum!

[Ladynred]

Would it also look bad or possibly get taken by the trustee if I redeemed it

Not at all. Redeeming secured property is always an option. You'll just have to negotiate a current market value price with the Trustee.

Should I have my parents gift me the money and then I pay the loan. Or can they pay the loan directly for me?

As long as you come up with the money for the Trustee, he/she will be happy. If you're asked where the money is coming from, just say your parents are giving you the money.

[bankit]

With redeeming I would be paying the lump sum to the lender, correct? And I would just take proof of payment and a redemption form to the 341 meeting to show the trustee? That is if the lender and I agree on the pay off and I don't have to file a motion. Thanks

[Ladynred]

With no lien to impair the value of the vehicle, the Trustee would be more interested in taking it to sell it depending on the value. You would then have to redeem it WITH THE TRUSTEE - not the lender. Without a lien recorded, the lender has no leverage and no security and you have 100% equity.