Registration Loans and Chapter 13 Bankruptcy

[despritfreya]

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

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.

This lien. . . is for a huge amount of money (over $100,000.00)

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.

[hopej50]

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.

[despritfreya]

It's a lien from some time ago...not as the result of a loan.

Then who holds the 1st position lien and why?

Des.

[hopej50]

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.

[despritfreya]

@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.

[hopej50]

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.