It is a fairly common for a debtor to propose a Chapter 13 plan proposing to make payments on a secured vehicle claim then later to file an amended plan proposing to surrender the vehicle. A plan will often say that the creditor will accept the surrender of the vehicle in full satisfaction of the debt. The question is, should you?
If at all possible, a vehicle lender should inspect the car, truck, motorcycle, or boat before the proposed surrender or before choosing to file a motion for relief from the automatic stay. It is possible the auto has been irreparably damaged or gutted, which is the reason the debtor wanted to relinquish it. Once the creditor has accepted the vehicle in satisfaction of the debt, it is difficult to go backwards and try to undo the deal.
If inspection of the vehicle is not possible, then your attorney should get written confirmation from the debtor or the debtor’s attorney that the vehicle is in good condition. This provides the creditor information about any damage to the vehicle before being stuck with a confirmed plan or having relief from stay. A written statement also provides the creditor with evidence if the debtor lies about the condition of the vehicle.
If you would like to learn more or you need assistance a customer’s bankruptcy case, contact Windtberg & Zdancewicz for help.
The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation. We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases. If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.