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American General Lien

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I have a vehicle that was co-signed and I and the co-signer both filed BK back in 2003/2004. The vehicle is now paid off and the title was issued to me in December of 2004. The title only listed the finance company as the (former) lienholder. I go to get co-signer's name off of vehicle and I am told by the tag office that there is a lien from American General. I contact American General and they said that my co-signer used the vehicle as collateral. He says he used household items (still trying to dig up his paperwork to prove otherwise). AG says they won't release lien until his acct. is paid off. We both listed AG in our Chap. 7 BK. Is there anything that can be done, short of paying the amount they say is owed?

Secondly, can a company knowingly use a vehicle as collateral if the vehicle is still being paid on?

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We both listed AG in our Chap. 7 BK.

That's your key right there. Your friend's 'household items' as collateral would have been a non-purchase money security interest which is easily avoided in a bankruptcy. He needs to dig up the loan paperwork to find out EXACTLY what was used as collateral.

Any debt owed to AG has been discharged making their lien unenforceable.

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