Your lender, or more accurately, the lienholder who is named on the title retains possession of the title during your bankruptcy case. Illinois Bankruptcy lawyer Andy Miofsky says “Neither the Court nor the trustee nor your bankruptcy lawyer ever receive your title.” The title stays with the lender.
Many chapter 13 debtors incorrectly assume the trustee has their car title because these debtors pay their car loan through the trustee in a chapter 13 case. Some debtors falsely believe they owe the trustee money on the car. In a chapter 13 case, the trustee merely serves as a conduit to collect money from the debtor and pay that money to the creditor. At the conclusion of your case you should contact your lender for the title.
Chapter 7 debtors who plan to keep their vehicles are required to keep making their car payments directly to the creditor. Payments are not made through the bankruptcy court.
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