Seaford, DE asked in Bankruptcy for Delaware

Q: Filed Chapter 7 bankruptcy. Owe $140 on a title loan. Want to pay this off, how can I do this. Manager would not let me.

Called to get payoff, was told account was flagged for BK and that manager has to call corporate to find out if she can take my money. I have the $140 and just want to pay it off.

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2 Lawyer Answers
W. J. Winterstein Jr.
W. J. Winterstein Jr.
PREMIUM
Answered
  • Bankruptcy Lawyer
  • Boyertown, PA

A: The "curtain" drops regarding debts and assets on the day a Ch.7 case is filed, for purposes of determining what assets are included in the bankruptcy "estate", as well as what debts will be subject to discharge.

Any duly perfected lien will not be discharged, or otherwise affected by the bankruptcy.

More particularly, in response to your question, any earnings or income you enjoy after the bankruptcy filing date is NOT includable in the bankruptcy estate, and is in the unfettered control of the debtor. For that reason, if the debtor chooses to do so, he can pay anyone, for any reason, even if that is an otherwise dischargeable debt included in the bankruptcy.

A bankruptcy discharge, it is often said, removes the legal obligation to pay a debt, but not the "moral" obligation.

Your creditor is probably concerned about appearing to violate the automatic stay, which would prohibit any creditor from attempting to collect a dischargeable debt. If the creditor has done nothing to encourage or persuade you to pay the debt, it should have nothing to fear.

You need not wait for the creditor's permission to pay the debt. Simply send them a check, identifying the account number and lien in a cover letter with the check, that directs the creditor to apply the payment to that lien and account. Send it certified mail, so that you can prove the creditor's receipt of the check. Very few creditors are sufficiently awake to refrain from processing a payment by depositing the check.

Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: You can pay it voluntarily any time but might be best after the bankruptcy is concluded.

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