Chapter 13 question?
I’m in a sticky situation. My ex-husband and I (when were married) filed for Chapter 13. SInce the divorce, I pay half the bankruptcy payment and he the other half. At the time we filed, we included our car payments in the bankruptcy, so until our last bankruptcy payment(which will be in 2 years, the lien holder will still have the title to my car. Since I’m still paying in bankruptcy and the lien holder has my title, I have to pay full coverage insurance(state law-GA). Well my car is finally inoperable and I am paying cash for another. Well it is operable but I refuse to put MORE money into a piece of junk to get it fixed. How do I get out from under paying insurance and registration on the old one without a title? Can I turn the car back over to the lien holder with no further obligation? What are my options?
August 3rd, 2008 at 9:29 pm
No, you can’t just turn over the car to the lien holder. They don’t want a junk car any more than you do. Here are a couple of possiblities. I am not an expert on Georgia law, so this may or may not apply, but it is worth a shot.
1. Turn in your plates, but let the title continue with the lien holder. In other words, render your car “undrivable.” In that situation, you should be able to forego the insurance payments. Check with your insurance company and of course with the lienholder, but this should work. Remember, however, that you need to have the car parked on a driveway or some place off the road. Without plates, you cannot park it in the street.
2. See if the lender will allow you to substitute the title of your new drivable car for the title of the old one. Explain to them that the title of a car that can be used is more valuable than a junker that is dangerous even to operate. If they go along with this, you can then reclaim the title of your other car and ditch that, along with your insurance payments.
Good luck!!
August 5th, 2008 at 11:18 am
Your lienholder will probably require you to keep insurance on the car. You may wish to contact the lienholder and determine whether you can voluntarily surrender the vehicle. BUT, that could show on your credit report for seven years! You may be able to work a deal to make lower payments on the vehicle or just work out a settlement with the lienholder where you pay a certain amount and they keep the car.
It is NOT fair, but there’s not much you can do, whether you are in Chapter 13 or not.
As far as insurance goes, in some states, you can give up your plates and the state does not care about insurance.
August 7th, 2008 at 2:03 am
Does GA have a non-op permit for registration? I know in CA you pay a low fee yearly for a non-operating permit in lieu of registration which basically says that you will not drive it and it will not be parked in public. That, also gets you out of paying for the insurance as well. Technically, it just places the reg on hold until you figure out what to do. I know you are stuck on the payment for the car because I’m assuming you reaffirmed the debt, but you might try contacting the trustee and/or creditor and see if you can voluntarily surrender it after the fact. You never know.