Legal Question in Bankruptcy in California

Re: surrendering property after chapter 7

The advice you received is not quite correct. The lender has the right to the collateral, but their indication that it must be repossessed through the bike shop, and the bike shop's reluctance to do so says nobody knows what they are doing, or they don't care about the collateral given the amount involved. I would send the letter, but there really isn't such a thing as abandonment of the lender's right to replevin (repossession of the bike) just because you sent a letter. Only time will act to protect you from a future action to repossess the bike. Eventually, the statute of limitations will run on their ability to bring such an action, and then you can rest comfortably that they have abandoned their interest in the bike as collateral. Hang on to the bike - do not sell it; but I think odds may be decent that they will never exercise their right to the collateral.

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