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Bank refuses to retrieve vehicle (collateral) in Minneapolis, MN Chapter 7 Bankruptcy; why?

Written by Wesley Scott | March 4, 2024 at 11:30 AM

    We get this phone call often. The person on the other end of the call is a former client of LifeBack Law Firm. The client has a vehicle loan for 10k and the vehicle is now a pile of junk. Yes, it is unusual for a bank not to want their collateral back, unless the collateral is junk.

Suppose the client has a 2008 Honda Civic and the bank loan on the Civic remains $8,000.00. The client had filed a Chapter 7 Bankruptcy in Minneapolis 1 year ago and had kept making payments on the vehicle loan because the vehicle, well, it still ran fine. However, when the 2008 Honda Civic took a crap (i.e. the engine seized up), the debtor then said well I am not making any further payments on this vehicle loan because the debtor is no longer liable on the loan. Makes sense.

     However, the client lives in an apartment complex and the complex wants this vehicle out of their parking lot and landlord is becoming increasingly perturbed the vehicle is still in the parking lot when it does not work. It becomes an obstacle for snowplows and an eye-sore. 

      That is when LifeBack Law’s phone rings. Client says something like this; hey, I have called the lender and they won’t call me back or don’t want their collateral back, what should I do?

     This is not unusual and here is what you do: send the lender a certified letter demanding they come and retrieve their collateral. Give them 14 days from the date of the certified letter to contact you to make arrangements to come and get the collateral. When they do not schedule something within 14 days, take the letter and have the vehicle crushed. 

                                                                        

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     When the time is right, or when you are ready, reach out to Minnesota’s most kind and helpful bankruptcy law firm by going now to www.lifebacklaw.com. You will be so thankful you did.