My question involves bankruptcy in the state of:AZ Under Chapter 13 , does the interest rate on a registration loan remain the same, or can it be lowered in the repayment plan?
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My question involves bankruptcy in the state of:AZ Under Chapter 13 , does the interest rate on a registration loan remain the same, or can it be lowered in the repayment plan?
It can be lowered, if you ask for it in your plan. The lender can object, and then it will be up to the judge.
Thank you so much. I appreciate your time to help me....maybe it's not said enough on here...but you are all amazing the way you give your time to help people who are just needing a little help and information. Thank you again.
Yep, the rate can be "cramdowned." A registration loan is unsecured (unlike a title loan). It could be reduced to nothing (secured loans get reduced to a few points over the current prime).
I had never ever used anything like this, so it was hard to distinguish in my research.....because there are payday loans, title loans, registration loans and personal loans...so now I have some idea. You guys are just awesome. I wish I could give you some advice....cooking, baking, gardening, arts...I'm your gal. lol
It's not a matter of it being personal or not. The question is whether there is a security interest or not. A regular car loan, a title loan, a house mortgage, etc... all are secured by some property (a house, a car, whatever). The bank can come take the property (repo the car, foreclose on the house) if the loan is not paid. A payday loan, credit cards, registration loans, and most other debts are unsecured. There's nothing to back up the loan but the borrowers ability to pay.
Secured loans can have their rates dropped to the prime plus a few points (three I think). Unsecured loans can have their rates dropped to zero.
If the same person here were to file Chapter 7 BK instead of the 13 (still in decision making mode here), would the same registration loan be considered unsecured, or considered secured allowing the lender to repossess their vehicle? I am thinking 7 would be better for them, however they think they may be able to keep their car if filing 13 instead, and also be able to make payments to their attorney with the 13, they believe. I am helping them out with gathering information, but they are going to hire an attorney to handle their BK. The only way to be sure it is done right and there are no complications for them.
If they have an attorney he or she is the best person to answer their questions.
As it relates to Title vs. Registration loans, they need to be sure there is no lien on the title (other than a purchase money lien - I assume they owe for the purchase). Liens in Arizona are not necessarily placed on the physical title especially if the purchase money lender has possession of the title. Liens can be electronically recorded. They should be able to check on the status of their title with the ADOT - Motor Vehicle Services.
Des.
The class of bankruptcy doesn't change whether it is secured or not. Further, in either case, there is usually a stay against foreclosure/repo while the bankruptcy is active unless the lender can make a good argument as to why the stay should be lifted.
So, if this couple had a lien on their vehicle that had been there for some time, due to a huge amount of money they owed, and then they got 2 registration loans, could the lenders from the 2 registration loans be able to repo the vehicle, even with the first lien in place? I am wording this the best way I know how...I hope it's understandable. They showed me their title..and at the bottom it states: "THIS VEHICLE TITLE IS NOT ELIGIBLE FOR TRANSFER - USE THE CONTACT ADOT AT WWW.AZDOT.GOV TO ASK FOR MORE INORMATION". So, I cannot figure out how the lenders of the two different registration loans would extend credit with that in place. This lien, which I understand is for a huge amount of money (over $100,000.00)....and must be electronically filed. But, they both said that they scanned the title for the two lenders. Unless the lenders really considered the title of any great importance in the first place. Perhaps this is just a legal way to extend credit to consumers as a "payday" loan. That is what it is beginning to look like to me. I thank you in advance, once again, for your help.
Not sure why you think that. The ADOT statement is a warning to a potential buyer of the vehicle that there is at least one lien against it. Such has nothing to do with placing a junior lien on the vehicle - no different than placing a 2nd mortgage on your home.
Then I suggest that you stop trying to "help" these folks and let their attorney advise them. While I could be wrong, I doubt very much that this type of a "loan" is a typical title or registration loan as I doubt lenders like Speedy Cash or Title Max would loan $100k.
Des.
Oh, no, the lien on the title is NOT from a registration loan. It's a lien from some time ago...not as the result of a loan. They then obtained 2 two different registration loans while this lien was already in place on their title. So, if it's like a 2nd mortgage on a home...if the registration loan companies want to repossess the vehicle, does the initial lien just disappear? Would the repossession override the lien already in place? Which lien would take priority? I guess that's my question. This may seem trivial..however, they are an elderly couple, and old family friends..they just asked me to help them in their decision making process. They will obtain professional legal help once their decision is made. I know they need professional legal help...I am just here to support them as best I can.
From what they would tell me, or tried to explain, it is for restitution from a legal thing....and they do know that this lien amount cannot be discharged in their bankruptcy...no way - no how. So, with that in place, and them making payments on the restitution lien, can the registration loan lender(s) still repo their vehicle which is really old and from what I found, is not worth more that $2500.00 at the most.
@hopej50
1. Can a junior lienholder repo/foreclose its lien in Arizona? Yes. But if it does so, it takes the property subject to any senior liens.
2. Can a Chapter 7 reduce a lien on personal property? Yes, if you redeem the property for its fair market value.
3. Can a Chapter 13 strip off a wholly unsecured junior lien against personal property? Yes, through the Chapter 13 Plan.
After reading your posting history, here is the bigger issue. You know the criminal restitution judgment is not dischargeable. What you may be missing is that, in either Chapter bk, 11 U.S.C. 522(f) might (and I stress the word "might") be used to remove the judicial lien against the vehicle. Once removed (if that is possible) and once you redeem the junior liens (assuming there are additional valid liens), you might be able to use the vehicle as a trade-in (something you could not do in prior years),
You need to meet with a well qualified bk attny. You need to bring with you the criminal restitution judgment. You really should stop attempting to get advice off the Internet. You have a complex case and, based upon your postings, numerous other issues that could impact it.
Des.
I had no idea how complex it was until more and more kept coming out about the whole thing. I did my best...and I want to thank everyone who has offered their time to help. Thank you.