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Charge off on secured item in B.K?


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Posted by ToddR on February 10, 2002 at 22:58:41:

WOW, Great Forum!!! Lots of good dialogue being exchanged here.

My situation...

I have been in a Chap 13 since 2/99, due to a bad business purchase (which continues to worsen). I also work in litigation/collections, so I am somewhat familiar with the legal process.

We have a boat with an approximate $28K loan remaining on it. The boat was not included in the bk. In 9/00, B of A (lienholder) filed a motion for relief from stay, arguing about value/equity. At the time they filed their motion, we offered to enter into a Adequate Protection Order with them, but they refused to do so. We showed up at the hearing, presented the funds to bring our loan current, and as expected, the judge denied their motion for relief from stay. Since that time I was only able to make about six additional payments (one every other month), and most recently have not paid at all (for about the past 6 months).

Even though I am now approximately 8-10 months delinquent, B of A has not moved for relief from stay to repossess the boat.

Most recently, I ran a credit report for myself and B of A is reporting the loan as "charged off". This confuses me since the loan is secured by collateral (the boat).

My question is....Why is the bank not pursuing this???

My thoughts are threefold;

1. They are purposely waiting, letting payments accrue so at the time they file another motion, the amount I will need to come up will be so large that I most likely won't be able to come up with it.

2. They are waiting until the bk is discharged before pursuing the matter further.

3. They are selling the charge off loan and it is in transition only (but there has been over 18 months of inactivity).

The "charge off" is throwing me off.

Any ideas would be greatly appreciated.

Thanks again,

Todd




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