Surrendering a car

A friend of mine filed bankruptcy a few weeks ago and gave up his car. The loan company mentioned it once before the final hearing but have not contacted him since then. To be honest, his 18 year old got a hold of it and it is in such bad condition, it wouldn’t suprise me if it wasn’t worth it for them to pay someone to come pick it up.

  1. Who is responsible for initiating the physical surrender? The friend or the loan company?

  2. Is there a certain point where my friend will end up keeping the car permanently simply because they never collected it? I assume it would be a hassle because of title, insurance, registration, etc. but it may just be like a free lease.

not legal advice

An attorney could probably advise you as to whether or not the car could be considered “abandoned property” and thus subject to a claim by either your friend or the kid. The laws regarding this may vary dramatically, and the fact that your friend is filing bankruptcy could seriously impact this if a court feels that the friend claimed the car back before the discharge or was somehow counting on getting the car back for little cost afterwards.

With cars and other property where there are formal titling documents, to claim an abandoned vehicle, you may need to file a formal claim with the DMV and/or the courts with an affidavit that the owner of the vehicle has failed to claim the vehicle and probably other facts. For example, I think some jurisdictions only allow you to claim an abandoned vehicle if it was left on your property, else it goes to the government and might end up as a police car or something.

not legal advice

Not an attorney.

However, as long as they haven’t done anything to actually claim the car, your friend can probably still drive it.

They could send you a letter to not touch their property, but then your friend could insist they remover it from his property and charge for storage.

My only concern is insurance. If your friend no longer has legal title to the car, can he still get insurance for the car? That would be the sticking point. He might still be paying for insurance on the car, but in case of an accident, the insurance company might refuse to pay for the claim. Check with the insurance company on that.

I have a friend who lost his house due to lack of payment. The bank seized the house, but never kicked him out. He’s been living their for over a year without making any sort of payment. The market where he lives is so bad, that the bank hasn’t even taken the steps it needs to put the place on the market.

IANAL - this is not advice, legal or otherwise.

In most places to claim an abandoned vehicle you must notify the owner in writing that the vehicle is there.

They then have a period of time (120 days in some places) to claim it.

If they don’t you can keep it. There are forms and stuff along the way to file, based on your location.

What worries me is the part where the 18yr old trashed the car. If it was trashed through normal use, there’s no problem. If it was trashed because it was repo’d then there could be severe legal penalties.

Any idea how he is handling the homeowners insurance? It is a similar point to the one you made about the car.

If they have filed bankruptcy and listed the car “to be surrendered” - at some point the creditor will file paperwork with the system to a)terminate the stay and b) come get the car.

Once that is happened, they will either be fairly freindly, or the car will just disappear.

The lawyer will help with this.

Be aware that they will sell the car at auction, and whatever the difference between what they get/what they are owed will be filed as an " unsecured debt" to be paid along with the rest of them (assuming 13).

The debtor is responsible for insurance/etc until the car is picked up.

IANAL - but I have recently done alot of research on these matters.

On this last paragraph - I would think he is living there illegally (squatting) - its no longer his house if the bank legally siezed it.

Bad condition, how? Filthy or crashed?

The bank will eventually repossess it. When that happens it’s not going to look like ‘surrender’ on the credit report. Friend needs to exercise some initiative.

The car’s title shows “The Bank” as a lienholder. A buyer can not get a clear title in their own name until “The Bank” removes the lien. Typically this will only happen when the lien is paid off. As far as insurance goes, there are too many nightmare scenarios possible in this situation that it’s pointless to list them. Friend needs to stop driving the car and start asking the lender to come and get it.

After I filed bankruptcy the bank was supposed to take my car back. It’s there property now so fuck em let them come get it was my additude.

It was a fairly valuable car too bt after the bankruptcy was discharged it sat for over a month. Eventually I got a noticed that it would betowed if I did nit put tags on it.

I called the bank and told them to either come get it now from me or they could pay to get it from the impound. The car was gone the next day :slight_smile:

Credit reporting agencies do not distinguish between a car that was surrendered and a car that was repossessed. A default is a default.

Ignorance fought, thank you.