Lenders no longer want to repossess cars, motorcycles, ATVs, etc.?

[Liberal_in_LA]

My lender refuses to repossess my car
By Justin Harelik • Bankrate.com

Justin HarelikQuestionDear 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

AnswerDear 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.

Read more: I want my car repossessed. Why wont they? http://www.bankrate.com/finance/debt/my-lender-refuses-to-repossess-my-car.aspx#ixzz1UCYn0Y23

[LeftyMom]

1. I'd make money if that happened to me.

If after X number of certified "come get your car" letters detailing my fees for storage went unanswered, and I had proof that the vehicle remained on my property, I could file a lien and then sell it (at very low value because it would need a salvage title as an abandoned vehicle) to cover my storage costs, and bill the lender for any remaining balance.

Damn, almost makes me want to take out a car loan.

[Skink]

2. Maybe your car was packaged into numerous derivatives and

its being repo'd would set off a chain of events that would hurt the lender even further. And meanwhile further up the chain of the derivations contracts some firms have also declared bankruptcy.

[RB TexLa]

4. The repossession would have no effect on that. You can securitize and sell the security 1000

times a day and it would do nothing to the ability of the servicer of the loan to reposes or the repossession itself.


If the debtor is willing to upkeep the property (car, house, motorcycle or whatever) free of charge and it doesn't have the best value why wouldn't you let them do that?

[Hassin Bin Sober]

3. This doesn't surprise me.

Back when business was good, some lenders would often times get stuck with more cars than they knew what to do with.

I was an auto F&I manager for several years. I remember when Bank One (chicago now Chase) went through a big push for car business and started buying loans "deep". The next year the rep told me they had so many cars stored the guy who owned the storage lot could retire on the fees alone and never have to work another day..

God only knows what it's like now.

[Little Star]

5. Don't tell anybody but...

many, many years ago (aprox.45 yrs)(I was just a young air head at the time) my new, 1st husband & I had bought a brand new car that we could not afford. We tried for like 6 months to keep up with the payments but just couldn't. In the middle of the night we drove it back to the dealers lot, locked it up, put the keys & a note in a envelope, shoved it in the door slot and never heard from them again. End of a not nice but true story!

We were lucky huh?