Expert: Mark J. Markus- California Bankruptcy Attorney - 3/7/2010

Question
QUESTION: Hi Mark, I hope you can give some insight to my questions.  I attended the meeting of the creditors on Feb. 4th, 2010 and no one showed up.  The rep from the finance company (who has been working with me on the pmts) said he would show but he didn't.  The trustee never mentioned anything about my statement of intention for the vehicle. Well I was just going through my file and realized that I didn't include it with my original filings so I took it to the bk court today.  I want to redeem the debt but how does work? Will the past due amount that I listed on the bk be discharged and then I will just pay the remaining balance?  Also, the loan expired in February so will that have any effect on it?  Should I go ahead and try to make a payment to the lender even though I don't know what amount will be remaining after the discharge?  Sorry for the all the questions, I am a very thorough person and I need some help.  BTW I'm in California, bk is in Central District.....thanks

ANSWER: Vehicle redemptions are done by motion pursuant to 11 USC 722.  You need to file a motion to redeem.  Generally, the value allowed is the blue book private party value, but different judges require different amounts.   Redemptions must be paid in a lump sum.  And yes, the balance of what you would have owed is discharged in your bankruptcy case (assuming you receive a discharge).

I'm not sure if you meant that you want to reaffirm your debt, since you said redeem.  They are two completely different things.  Reaffirmation is something you would do to rewrite the note and allow past due amounts to be paid as part of the agreement.  There's usually no discount for doing a reaffirmation agreement; you just agree by contract to repay the amount owed on the vehicle in return for being able to retain it after bankruptcy.  

http://www.bklaw.com/

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QUESTION: Hi again Mark, I had another question that you missed.  The loan expired in February so will that have any effect on it?  Should I go ahead and try to make a payment to the lender even though I don't know what amount will be remaining after the discharge?  I cannot afford to reaffirm the debt and pay all of the past due amount that's why I want to redeem the vehicle.  Thanks again.

ANSWER: The loan has nothing to do with it, except to the extent that the value of the vehicle is higher than the loan payoff amount (in which case, doing a redemption would make no sense).  I don't see any reason to make any payments to the lender if you're going to redeem.  I'm not sure what you mean by the loan "expired".  Do you mean you no longer owe anything, or that they have accelerated the loan and called it all due?  

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

QUESTION: It says that the last due date was Feb 2010. No, the value of the vehicle is lower than the payoff and the past due amount that I included on bk.
 
I do have one more issue that just arose today.  I was served today with another notice to go to court on something that I had included in my bk filing. It said amended at the top and when I examined the first one received and this new one, nothing has changed accept the Plaintiff switched the mailing address to the street address and vice versa.  

This is my old landlord I had to file bk on. Can he do this even though he did not appear at the meeting of the creditors? I thought he had to go through the bk court to file an appeal?

Thanks again for all your help.

Answer
Appearing at the meeting of creditors has nothing to do with anything.  If this is a debt that pre-dated your bankruptcy filing, then any actions he takes are void, and he is in violation of the automatic stay of 11 USC 362 if he is continuing to collect on a debt.  If it's being done willfully (with notice of the bankruptcy case) you can get sanctions against him in the bankruptcy court.  

You really need to get an attorney to assist you with these actions (the redemption, violations of the Stay, etc.).  This is really beyond the scope of this service to properly advise you on.