Problems after hearing

[tlkoer]

What is the name of your state?What is the name of your state? KY

Our hearing went fine. It was afterwards the problem started. The trustee abandon interest in our house, our old car that has no a/c and doesn't change gears and our tax refund money. The problem came when he couldn't find the copy of the title to our 2004 van (he remember seeing but didn't have it with him). So we gave a copy to our lawyer to give to him. We get a call from our lawyer the next day saying we might have a problem. The car title was issued over 20 days since we took possession of the car. Because of this we have a defective title. She said we might have to turn in the car even through we had planned on reaffirming it. She also said we might have to buy it from the trustee through redemption 722. With them they will only loan us 11,000. I feel like we are being punished over something we had no control over. Has anyone seen a problem like this and just wonder whay usually happens? I really need this van with three kids (one with asthma, one that's 3 monrhs old and is a premie). If the outcome isn't what I like, can I petition it or something? Thanks!

[AttorneyOney]

You should trust your lawyer on this. If a secured lender fails to perfect its security interest before the bankruptcy petition is filed, the trustee can use the "strong arm" powers under section 544 to avoid that interest. Meaning that the trustee can take the collateral free and clear of the security interest and sell it for the benefit of the creditors. The trustee would have to pay the debtor in cash up to the value of any exemption that the debtor claims.

Motor vehicle title laws typically give the lender a few days grace to *apply* for a title. If it takes the state a while to actually issue the title, that shouldn't affect the validity of the lien. I'm sure your lawyer knows all about these nuances and will give you good advice about what to do.