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Bankruptcy Law/vehicle discharged in BK, now collections for balance?

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Expert: - 8/20/2006


Question
Hi, I filed CH 7 in California 5/2002.  Included and discharged was vehicle which I surrendered--did not want.  Bank sold vehicle (at auction?) for ~14606 but loan amount was ~33792.  Difference was $19561.82.  4 years later, 8/2002, I get a collection agency notice for that difference.  Since vehicle was discharged in BK and surrendered at time of discharge, what to do now?  Am I liable for the $19561.82?  

Answer
Under the facts as you've stated them, you have no further obligation on the vehicle.  The collection agency is in contempt of court for trying to collect on it.  I would send them a copy of your discharge notice with a demand that they not take any further action to collect.  Be sure it's in writing.  If they then take any other action, you can seek a contempt order against them in the bankruptcy court.

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Mark J. Markus- California Bankruptcy Attorney

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Mark J. Markus is a Los Angeles bankruptcy attorney who has practiced exclusively bankruptcy law in California since 1991 and is rated A+ by the Better Business Bureau and is AV-rated by Martindale-Hubbell. He represents debtors, creditors, and Trustees in Chapter 7, Chapter 11, and Chapter 13 of the bankruptcy code throughout California.

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Visit our California bankruptcy webpage at http://www.bklaw.com for more information on bankruptcy in general and Mark J. Markus in particular. Many questions are answered on the web page (hint, hint).
The Markus webpage also contains more information on

  • Which Chapter to File,
  • business bankruptcy,
  • chapter 7 bankruptcy,
  • chapter 11 bankruptcy,
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  • Frequently Asked Bankruptcy Questions

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    Organizations
    Central District Consumer Bankruptcy Attorneys Association (CDCBAA) Los Angeles County Bar Association (LACBA) Commercial Law & Bankruptcy Section of the Los Angeles County Bar Association Financial Lawyers Conference (FLC) National Association of Consumer Bankruptcy Attorneys (NACBA) Los Angeles Bankruptcy Forum (LABF) American Bankruptcy Institute (ABI) San Fernando Valley Bar Association (SFVBA)

    Publications
    Central District Consumer Bankruptcy Attorneys Association Newsletter September 2007 (Vol. 1, Issue 2)

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    J.D., University of Arizona 1990. B.A. Economics, California State University, Northridge 1986. For more details please click here

    Awards and Honors
    AV Rated by Martindale-Hubbell (http://www.martindale.com) A+ Rated by Better Business Bureau

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