Legal Question in Bankruptcy in Wisconsin

Removal of Lien from Vehicle Title After Bankruptcy in WI

Title liens generally survive bankruptcy so they need to be respected afterward. If a vehicle is subsequently scrapped, the lender is entitled to whatever the junk yard is willing to pay. However, you may be able to negotiate for the lender to provide you with a lien satisfaction document releasing the title on your own for a minimal amount, after which you can do as you please. The junkyard might also be willing to buy the vehicle from you with the lien in place, in which event they would be responsible to negotiate with the lender, although a problem could come up for you if the junkyard fails to pay them (since transferring secured property without the consent of the lender is tantamount to theft). There is also a procedure available to you while your bankruptcy is still open to have the judge set the value of any property lien if you are unable to successfully negotiate a price. If you then pay that price to the creditor, the lien will be cleared. That, however, requires an adversary proceeding in federal court which can cost $1,000.00 or more in legal fees. Therefore, it may not be worthwhile to request such relief from the court in a salvage situation. My comments here are not intended as legal advice unless you subsequently retain me and revisit this issue with me.