I Want my Car Repossessed. Why Won't They?

Dear Bankruptcy Adviser,

I was forced to file Chapter 7 bankruptcy. I agreed to surrender my vehicle. After my Chapter 7 was discharged, I naturally expected my car to be picked up by the lender. It has now been three months. Is there a required amount of time in which they have to pick it up? I have made many calls about this to my lender. Not one call has been returned. Isn't there something in the law that states they have a time limit to pick up the car, or else release the title to me?

-- Jim

Dear Jim, This is a problem I am seeing more and more frequently. I have some suggestions for you, but I would love to hear from readers whether other alternatives exist.

This is what happened: The car lender received notification of the bankruptcy and you listed in the bankruptcy paperwork that you wanted to surrender the vehicle. The catch: The lender does not want the car back. The lender still has legal ownership of the vehicle since you never paid the car off, but the lender refuses to take possession.

This is also happening more often with motorcycles, ATVs, Jet Skis and recreational vehicles. So many people are surrendering them that the resale value is often very low. It's so low, in fact, that the lender doesn't want to waste resources to repossess, refurbish and resell.

The problem for you is this: I don't know of any laws that would require the lender to give you the title, even after an unreasonable period of time. But until this matter is settled, you will have to foot expenses such as registration and insurance, for reasons I'll explain below.

In my opinion, you have three options at this point. Let me outline them for you.

One, keep the vehicle and continue to use it. One day the lender or some collection agency will decide it is worthwhile to pick up the vehicle. As I mentioned, keep the vehicle registered and maintain proper insurance. You don't want to compound the filing of a bankruptcy with a post-bankruptcy car accident. Your liability in an accident will not be part of your bankruptcy case -- in other words, it won't be dischargeable.

With this option, it is possible that you might be able to keep and use the car for many more years without receiving the legal title to it.

A second option is to park the vehicle in a secure, public location and send a copy of the keys via registered mail to the creditor. Again, you will want to keep your car insurance current until you confirm that the lender has picked up the car. The risk for you here is that you will need to confirm that the car eventually was picked up by the proper entity.

There are also some practical issues if you choose this option. Specifically, many communities have very strict rules for leaving cars on the street. You will need to visit and possibly move the car regularly. Each time you move it, contact the lender again -- and again and again.

The third choice is to continue to call the lender every 48 hours until you talk someone into picking up the vehicle. This will take a lot of persistence on your part, but eventually it should get the lender to act.

To help, get a fax number and mailing address. If you have a fax machine at home that doesn't cost more than a local call, send numerous faxes. Also, mail a formal demand letter notifying them that their vehicle sits waiting to be picked up.

I can tell you are frustrated and confused about how to proceed. You simply must keep trying to get the lender to pick up the vehicle. This will require numerous phone calls as well as a calm demeanor as you try to find the right person who can help you.