Legal Question in Bankruptcy in California

Automobile Included in Bankruptcy

My wife and I filed for bankruptcy and approved in September. When we filed, we EXCLUDED our autombobiles to NOT have them included as part of the bankruptcy. However, the court and the finance company INCLUDED one of the vehicles as part of the bankruptcy. I was not aware of that until I discovered that I no longer had an account number with the finance company even though I was making ''Voluntary Payments.'' Because it WAS included as part of the bankruptcy, my wife and I would like to lower the monthly payment to a manageable amount (we have offered to pay the principal as we have been paying on the vehicle for 3 years, and lower the monthly payment from $335 to say $200 would be more manageable). The finance company has said NO, they can't lower the payments to not include the finance charge, but that they will CONSIDER renegotiating the loan and have us pay a lower amount (including finance charges) for a longer period of time. My question is, because WE DID NOT ASK FOR THE COURT TO include the vehicle in the bankruptcy BUT that it was done so without our knowledge or consent, can we simply continue making voluntary payments on a monthly basis or do we risk having the car repossessed unless we renegotiate the loan?


Asked on 1/10/05, 6:59 pm

2 Answers from Attorneys
Mark Markus Law Office of Mark J. Markus

Re: Automobile Included in Bankruptcy

OK. You are mixing up a bunch of different concepts here and your attorney should have explained them to you better. First of all you cannot exclude any assets or any debts from a bankruptcy case. If you did, you committed fraud and could have had your entire discharge denied. I assume that what you did was state on your Statement of Intentions that you were going to retain your vehicle and maintain the regular monthly payments. As such, you may do just that: maintain the payments and the creditor secured by the vehicle cannot repossess it as long as you make those payments. As far as lowering the payments or renegotiating the contract, that is also a possiblity but is up to you and the creditor.

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Answered on 1/10/05, 7:19 pm
Judith Deming Deming & Associates

Re: Automobile Included in Bankruptcy

I am assuming you filed the petition yourself, or you would be asking these questions of your attorney. Please be aware that you CANNOT elect to list only certain debts, etc, and somewhere in your petition, you stated under penalty of perjury, that you have truthfully listed ALL your assets and ALL your debts! To choose to pay some debts and not others is an unlawful preference to certain creditors, clearly improper and can be considered a fraud on the bankruptcy court.

It may be that your auto lender picked up the bankruptcy filng on their own, as bankruptcies are tracked and reported to lenders. In any event, your auto lender has offered you an alternative; if you do not want to accept it, then you may seek to modify your plan of reorganization through the court.

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Answered on 1/11/05, 12:45 am


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