When a bank repo's a bike, what are they in titled to?

Question

I recently filed a chapter 7 after having to have major surgery. I have tried to make payments on my bike but was told I couldnt by my attorney until the bankruptcy was filed. After I filed I called the loan company about my bike. They said to continue to make payments and that they would work with me. I made two payments and they decided not to work with me and they want me to surrender the bike. I have done a lot of changes to the bike do to an accident that I had on it. I have changed the motors, seat, bags and put some after market parts on it. My question is when I surrender it and it doesnt have orginal parts on it will what will happen? Will I owe money even though I filed a chapter 7 on the loan and is it legal for me to keep some of the extras that I put on it and give them as little of the bike back as possible. Like maybe just the frame and wheels?????

Answer 1

They get the bike, sell it for real cheap and then leave you with the remaining balance.

Answer 2

Since they are asking for you to surrender it, it sounds like they are not going to allow you to reafirm the debt. If they actually hold the title to the bike, you might be able to use a process called "redemption". This is where you pay the original lender the current value of the bike and you then get the title back. So for example if you owe $5,000 on the loan, but it is only worth $2,500 if you file bankruptcy and pay the creditor $2,500 in one payment you now own the bike free and clear. This is done quite often for cars, but should apply to any secured debt. Your attorney should be able to guide you as to if this will be able to work for you.

Now, if you have to surrender the bike when you file, you will not owe any additional money on it. They will sell it for what they can, and the remaining balance will be included in your bankruptcy.

As for what you can turn in. You need to give them basically an entire bike. If you try to just give them the frame and wheels you will have a lot of explaining to do. If they feel that you are holding items they will either make you turn those in or still hold you liable for the bikes value.

However, if any of the aftermarket items are things you can take off without effecting the basic bike then that would be okay. You just have to do this before you turn the bike in. As once you turn it in anything on that bike becomes property of the creditor and you will not get it back.

Answer 3

Did you reaffirm the loan on your bike when you filed bankruptcy?

If so as long as you make your payments they can not touch it.

If not it is at their discretion weather they let you keep it or not. It is unusual for a lender to want their collateral back instead of the money. This part makes no sense.

If it was included in your bankruptcy, just let them have it. If you strip things off of it they can come back and claim fraud and then you will be stuck for the full amount.

Answer 4

Even though you made improvements to the bike, you don't mention exactly how much money is owed to the bank for it. That is the most important factor... and I would suggest letting your attorney handle it all. It's unusual that they would rather have you surrender the bike than receive payments... something just isn't right here.

Answer 5

if you filed on the loan for the bike then they can't touch it. you should consult your lawyer for advice to be certain but i was told when i filed to not make payments directly to the lender. i got into the same thing with my car, i had about the cars bank value in aftermarket parts and i wasn't going to give them up. again consult your lawyer because your paying him a lot of money and im not an attorney.

Answer 6

They are entitled to the bike as is no matter what you have done to it or how much money you have in it.

Answer 7

They are entitled to you paying off your debt...it's their merchandise they can also auction it off.