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  1. #1

    Default Does Chapter 7 Bankruptcy Void a Contract

    My question involves bankruptcy in the state of: tennessee

    I had a car loan and filed ch 7. I did not reaffirm, I was granted a discharge a couple of months ago.

    Was the sales contract voided through bankruptcy? Or, is the contract and all the provisions still valid except for the debt I owe?

  2. #2
    Join Date
    Sep 2010
    Posts
    478

    Default Re: Does Ch 7 Bankruptcy Void a Contract or Just Discharge the Debt

    A "discharge" is simply an injunction issued by the court prohibiting a creditor from collecting $$$ from the debtor. The debt did not just go away. It is still owed. It just cannot be collected on. Based upon this fact, the answer to your question is "the contract is not voided".

    While a secured creditor cannot ask for $$ the lien it maintains on the collateral (vehicle in your case) passes through the bk unaffected. At some point it will most likely take back its property.

    Des.

  3. #3

    Default Re: Does Ch 7 Bankruptcy Void a Contract or Just Discharge the Debt

    Thanks.

    The contract I signed when I purchased the car allows agents of the creditor on my property to repossess the vehicle. I wasn't sure if that part of the contract could be enforced. From what I understand the contract is in full force, but the collection of the debt is prohibited.

  4. #4
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Does Ch 7 Bankruptcy Void a Contract or Just Discharge the Debt

    The car can be repossessed if they placed the appropriate security instrument on it before the bankruptcy (a lien).

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