Expert: Terry Leeders - 1/15/2009

Question
QUESTION: I filed Ch7 bankruptcy and got my discharge letter however CitiFinancial called me, and said my vehicle was discharged.  I requested it be re-affirmed but they never sent an agreement.  My attorney assured me, that was alright, but now I'm not sure if I have to surrender my vehicle or can I keep it.  Citi says they won't send me statements so I'm not completely sure how much I even have to pay.  What should I do?

ANSWER: Unfortunately, you are sort of in limbo.
If you continue to make your payments, and stay current, then most companies will allow you to keep the vehicle, and will issue you title once paid in full.  The code says this is not a 'legal' option anymore in Chapter 7 bankruptcy, but many creditors still will allow you to do this, since they will usually get more money in the long run this way, as opposed to repossessing, and liquidating the asset at auction.  You are not on the hook for the loan at all, and can walk away at any time as well, without owing them another dime.

---------- FOLLOW-UP ----------

QUESTION: Thanks so much.  One more question.  They have indicated they won't send me any correspondence, so how can I get them to tell me what I still owe, or when it's paid off?  Also, since the loan is discharged, how would interest work?  I just want to make sure if I'm going to keep paying for it, I don't pay more than I should.  Thanks again.

Answer
You will have to try to get the info from the lender.
You can calculate the balance due from your original contract, based on how many payments you made and have left. Don't forget any late fees if any.  You may be able to call the company to get the balance remaining.  They cannot collect from you, and by sending statements, that is collecting.  They may provide the info to you by phone though, if you request it. You can also try writing a letter to them, giving them permission to send monthly statements despite the bankruptcy discharge, it's worth a shot.