chattel mortgage on personal loan
January 25th, 2006 by Questions
I was recently divorced, (in Ontario) and ended up with about 25000 in debt from the whole process, I have a decent paying job that I have been doing for about 10 years. I am going to have to start paying child support and under the guidelines, it works out to be a little more than a 1/3 of my pay. Due to my debt load, this would leave me with no money to pay rent or eat so I decided to start looking into bankruptcy options.
One of the loans I have, has what’s called a “chattel Mortgage”. Which consist of my car (worth 1000 bucks) and various electronics. ($1000)
Some people told me that these items could be seized by the finance company? Is this true?
If I do file for bankruptcy, am I able to work something out with the finance company (citi financial) regarding my chattel mortgage items? Maybe keep paying the loan? Or do I just have to take it like a man and start thumbing 30 miles to work.
Thanking you in advance for your advice.
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January 28, 2006 at 6:37 pm, Barton Goth, GCO Inc. Bankruptcy Trustees said:
Yes, if you have pledged these assets as collateral against any of your debts, the lenders in question have been given the right to seize this property in absence of payments. Often they may be willing to negotiation on furnishings and electronics, but it is often more difficult to negotiate when a car is at stake. You may consider giving the vehicle back and finding a different vehicle to replace it (if you have to finance it, there are always distressed lenders that will be willing to lend the money but be prepared to pay a higher rate than normal). The one positive thing to consider is that by reducing $25,000 of debt your monthly cash flow will be much more manageable and may even provide sufficient room for a car payment. I suggest you contact a licensed trustee to discuss this,, but be sure to ask if he knows any distressed lender that may be able to finance a decent car at a reasonable rate.