Central District Consumer Bankruptcy Attorney's Association

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> Dear Group, I have a client who wishes to file Ch. 7. She owns a
vehicle valued at approx. $2,000. However, the vehicle financing
company claims she still owes $841.68 for late fees accrued during
the life of the contract. .
The answer is in section 506. 506 essentially says, a creditor with
a contractual claim and a security interest, retains the security
interest (read lien) until paid. (check the limit in 506(d))
506(b) even allows attys fees, etc., to be added to the secured
claim.
Liens survive bankruptcy, so unless you can find a contractual
reason (read your client's contract) to object to the charges (i.e.
you must file an objection if you have grounds), they constitute a
lien and will ride through the bankruptcy (i.e. won't be discharged)
dennis

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Dear Group,
I have a client who wishes to file Ch. 7. She owns a vehicle valued
at approx. $2,000. However, the vehicle financing company claims
she still owes $841.68 for late fees accrued during the life of the
contract. The financing company won't send her the pink slip until
the late fees are paid, which they have agreed to reduce by 50%.
Query: Can I simply list the financing company as an unsecured
creditor and have the debt discharged since the balance is for late
fees only? Or, does the financing company have a claim as a secured
creditor? Or, would be advisable to have her settle the debt.
Any assistence would be appreciated.
Mark C. Kim

The post was migrated from Yahoo.