Bankruptcy and Title Loans

An emailer recently asked me if he must pay a title loan company that is holding title to his vehicle if he wants to keep the vehicle. The short answer is that if this emailer files a Chapter 7 bankruptcy, he must continue to pay the title lender in order to keep the vehicle. The year, make and model of the vehicle is irrelevant.

Basically, bankruptcy does not eliminate liens. I usually tell my clients that if they want to file Chapter 7 and keep their vehicles and/or houses, they need to continue to pay the lienholder(s).

There could be options available on reducing the amount that must be paid to the title company holding a lien against a vehicle in both a Chapter 7 and Chapter 13 bankruptcy, but until those things officially get approved by the Court, the debtor should continue to make payments to the lienholder to avoid a repossession. An emailer recently asked me if he must pay a title loan company that is holding title to his vehicle if he wants to keep the vehicle. The short answer is that if this emailer files a Chapter 7 bankruptcy, he must continue to pay the title lender in order to keep the vehicle. The year, make and model of the vehicle is irrelevant.

Basically, bankruptcy does not eliminate liens. I usually tell my clients that if they want to file Chapter 7 and keep their vehicles and/or houses, they need to continue to pay the lienholder(s).

There could be options available on reducing the amount that must be paid to the title company holding a lien against a vehicle in both a Chapter 7 and Chapter 13 bankruptcy, but until those things officially get approved by the Court, the debtor should continue to make payments to the lienholder to avoid a repossession.