AZ. Auto title loans?

[ruttie]

Does anyone know of a good auto title loan company? My Bk attorney said that I could get a title loan on my vehicle, but I don't know of any that would have a good reputation, does any od these companies have a good reputation?

[Denita]

From your post, it sounds like your attorney is having you put a loan on your vehicle so you can keep it in the BK. Or as a source of funds to pay his fee.

You would be better off going to a CU if you can - but usually if the advice is coming from a BK attorney then that option may no longer be available to you due to your credit.

You have to be very very careful with this type of strategy because the Trustee will look to see when you obtained the loan and what you did with the funds. It is perfectly acceptable to obtain the funds to spend on BK attorney fee's and living expenses - so be prepared to show when you got the loan, and where the funds were spent when you file.

As to your original question: I don't think there is any such thing as a reputable lender for title loans. Most of those type lenders are your real hard money type of lender. Maybe someone on here has had a good experience with one in AZ. Good luck.

[ruttie]

we do not have or have we had any income for about a year. we have been living on selling personal items & some MV items (quads, trailer) I have been very careful with my paper trail & know that I will have to account for everything we spend. its a rip off that you have to find a accredited loan shark out there to get a title loan. you have to be sure that you are not even 1 day late, otherwise they will keep the vehicle.There are friends whom would loan us the money toward the title, but I don't think that is allowed. There is a law in AZ.(this is what one of the title lenders told me) that they cannot charge more than 10% interest, but are there hidden fees also? Getting a loan & using the money to live on & be paying back the vehicle would be better than just selling it & using the money to live on. Its just that our credit is bad & with no employment right now, its almost impossible to buy anything.

[Denita]

...There are friends whom would loan us the money toward the title, but I don't think that is allowed. ..

Check with your Bk attorney, but I don't think there is any restriction on borrowing from friends but there are some complications when you do.

1) the lien must be recorded against the title at the time you borrow the money

2) when you file for BK, that debt must be included in your filing - along with all the other debt

3) unless you reaffirm the debt with your friend, that debt will be discharged in the BK.

4) you are allowed to pay back the friend after you have received your discharge in bankruptcy - but you are not obligated if the debt is discharged. This would make borrowing from a friend difficult.

The trustee will examine any transaction done within a year (at least) with friends, family or other 'non arms length type' transactions. That may be the reason why you thought you could not borrow from a friend. Naturally check all info you receive from the internet with your local BK attorney as he will know more about your situation and be familiar with the laws and the trustee's in your area.

If you have no income, you may want to wait to file until you do have a job. Filing BK only solves part of the problem - it gets rid of debt, it does not solve the income issue.

[ruttie]

the income issue can be solved after we file, if we make too much money now, we have to show where we are spending it all, a paycheck will make matters worse at this time. since we stopped paying the mortgage, that was a big chunk of our expenses, we can get title loans on the vehicles & use that for the next few months.

It is like a huge cannon has been lifted off my shoulders today. I have been fighting this bk for awhile & trying to fight off a judgement for a few months, but this law firm is like a baracuda, he is relentless.

I wasted 450.00 responding to 2 summons & all it did was bide me time, to come to the conclusion that we need to start clean again.

just knowing that there may be a possibility of keeping our vehicles, has given us a little more hope also. there is no way, we could go get a vehicle loan right now & I don't want to be obligated to a relative.

[ruttie]

I spoke with a title loan company yesterday, they said they are one of the fairest in AZ. they said the interest is only 5% monthly, but actually comes out to be 60.8% of the loan???I just cannot figure out how 5% turns into 61%. they said alot of the lenders charge up to 130%. If az. passed a law saying that these cash n go places can not exceed 10%, then how does it get to calculate 60-150%??? I am in the midst of asking my bk lawyer, if I can use a private investor for the loan on the vehicles, at even 20% at this point. I know that a relative is probably out of the question,even if they don't have the same last name, but it totally kills me to pay someone this kind of money. I can borrow the money from a relative post bankruptcy & pay off the loan shark, but I feel for all the people out there that are stuck with loans like this, because there is no other alternative.

[Denita]

What they probably said was 5% per MONTH. Which is 5% x 12 months = 60%. Yep, we used to call this usury.

As to the 60.8%, I'm sure that is the official amount as the actual math is a little more complex. (Think APR disclosure) I always go for the simple explanation...goes with my simple mindset. Anyway, if you pay off the lien on the car before the 12 mths, then you drastically reduce your interest. But check your loan docs to make sure there is no pre-payment penalty. I've never had a title loan and I don't know what tricks they put in the docs. So read them carefully.

Edited December 16, 2010 by Denita
more info

[ruttie]

thank you for your input, they did say that there is no pre-payment penalty & that we only pay interest on the money we use 7 how long we use it. I' m alittle on when I can pay it off post BK without it being seen as an asset

[Denita]

thank you for your input, they did say that there is no pre-payment penalty & that we only pay interest on the money we use 7 how long we use it. I' m alittle on when I can pay it off post BK without it being seen as an asset

The way a BK works (warning: simple explanation - talk to an attorney for the legal stuff) is that a "Bankruptcy Estate" is created the date you FILE your Bk petition. The Trustee examines the BK estate paperwork and other public records. Then you have a 341 meeting about 30 days or so after the filing. The 341 is also called the meeeting of the creditors. In most Ch 7's the 341 is just a few minutes and you are there to answer whatever questions the Trustee has for you. Remember the Trustee represents the creditors and is looking for assets/$$ to pay the creditors. If the Trustee determines there are no assets, you are deemed to be a no asset Ch 7 and given your discharge, usually 60 days later.

If you have assets over the exemptions allowed, then the trustee will want to either collect the asset or ask you for $X to pay for the asset.

I am assuming that the title loan you are considering is going to eat up all the excess equity in your vehicle so that the remaining value falls within your allowed vehicle exemption amount at the time of filing. I am also assuming you are using the funds for living expenses and will not have excess funds in your bank account over the allowed exemption.

You are allowed to earn income after you file. The income you earn after you file is yours to keep. If you pay off the title loan after your discharge it is perfectly acceptable to do so as the funds you are using for the payoff are either new funds earned after your filing date or were exempt funds detailed in your petition.

NOTE: The danger you may encounter during this process is if the lienholder does not file the lien in time for your filing. Make sure every i is dotted and t crossed as the Trustee has extraordinary powers to void the lien and take the asset if the lien is not filed exactly correct.

REMINDER: The Ch 7 Trustee only gets about $60 per case in a no asset BK. If they find assets they get a commission on whatever they find (it varies per district, but it is substantial). So they know where to look to find any mistakes in your petition or in any lien that may have been recently filed. Make sure your attorney is well aware of the actual loan/the lien and checks the paperwork for you.

To directly answer your question: it is not considered an asset available to the Trustee if the value of the asset falls within your exemption amount. Check your states allowed exemptions to be sure.

Edited December 16, 2010 by Denita

[ruttie]

my husband has a truck 2008 that he wants to keep, so we will have to use both of our exemptions5,000 ea. to keep the truck & reaffirm it, but the motorcycle & my car will need a title loan, first so we can continue to pay everything until we file & try to save them, if I have to pay the high % it beats having to try & get another vehicle post bk. my car is 9 yrs old, but its still a good vehicle, theres no way I would get approved for another vehicle loan

[workingpoor]

What they probably said was 5% per MONTH. Which is 5% x 12 months = 60%. Yep, we used to call this usury.

You're right, and it still is usury. It's figured on a per annum basis, so 60% is definitely usury

[ruttie]

iS THIS LEGAL? THEY TELL YOU THAT THEY ARE NOT ALLOWED TO CHARGE MORE THAN 10% AS PASSED BY LAWS IN AZ., BUT THEN HOW CAN THEY GET AWAY WITH THIS?

[GlitterGal]

They get away with it the same way creditors get away with being jerks on the phone or violating the law. Nobody does anything.

Sometimes, the only remedy under law is to sue to reclaim damages. That is the way our legal system is set up, and it sucks, but that's the remedy.

Its like SOL. A creditor can use you for a zombie debt, and you are required to spend your hard earned time and possibly some money to defend yourself, even though they KNOW going into the case that its past SOL. They are counting on you to not know it and to default.