Neenah, WI asked in Bankruptcy for Wisconsin

Q: chapter 7 bankruptcy a year ago and they haven’t retrieved the vehicle from the dealership. Is that abandonment of debt?

The car had damage where the engine had to be replaced and it’s at the dealership where it had the work done sitting in a back lot. I haven’t contacted the dealership or the lending agency in fear of this could somehow impact me..

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4 Lawyer Answers

A: You likely have nothing to worry about. Eventually, the dealer will probably assert a mechanics lien and sell the vehicle.

You do not provide dates as to when the vehicle was taken to the dealership. If this contract was entered into after your bankruptcy filing, you are likely liable. If not, the debt should have been discharged in your bankruptcy case. Did you provide notice to the dealer and the lender?

In any event, you should run this question past your bankruptcy attorney, as he or she would have all the facts that I am asking about.

David S. Burleson and Timothy Denison agree with this answer

David S. Burleson
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Answered

A: It sounds like you complied with your Statement of Intention by surrendering the vehicle back to the creditor. As long as you listed the location of the vehicle in your schedules then your Order of Discharge would have discharged your legal obligation on this debt. You should not have to worry about it anymore.

Martha Warriner Jarrett agrees with this answer

A: No. If you surrendered it and gave them notice in the bankruptcy, that is all you need to do.

James L. Arrasmith
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Answered

A: It sounds like you’re in a tough spot, but you’re not alone in dealing with this type of situation. When a car loan is discharged in Chapter 7 bankruptcy, the lender usually has the right to repossess the vehicle since the debt tied to it is no longer enforceable against you personally. However, if the lender hasn’t taken possession of the vehicle after such a long time, it may raise questions about their intent or actions.

Abandonment of debt isn’t exactly what’s happening here, but if the lender isn’t actively pursuing the vehicle, it may signal that they’ve deprioritized it. The vehicle still belongs to the lender if the debt was secured, so leaving it at the dealership indefinitely may not eliminate their interest in it. Your hesitation to contact the lender or dealership is understandable, but ignoring the situation could potentially complicate matters down the line.

To protect yourself, it might help to understand your rights and obligations post-bankruptcy. You could also check with the dealership to confirm the car’s status and whether any charges are accumulating for its storage. Taking careful, informed steps ensures that you don’t inadvertently create new issues with the lender or the dealership.

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