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Yes, the Trustee can and it does happen. Every creditor that has a secured lien must file the appropriate paperwork with the appropriate state agency and in most states, doing it within a certain number of days. Normally 20. If they don't do it timely, the Trustee can avoid the lien because it is voidable. In bankruptcy, Trustees have the power to void certain types of liens and unperfected or faulty-perfected liens are one of them. What to do? Easiest is to give the car to the Trustee. Then you may want to consider a separate cause of action against the car dealership for faulty perfection filing. May be able to recover the fair value of your use of the car. You won't have to pay the note back on the car. More opinions from FAQ Farmers: * Probably. You always have the right of appeal, though. And then a judge would decide if it is allowable.

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Q: Can a bankruptcy trustee take possession of a car or demand the car value because a lien 'was not perfected in timely manner'?
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Can you buy a house if you have filed for bankruptcy?

If you have filed bankruptcy because you cannot afford to pay your debts, a lender will not loan you money to purchase a house and it just doesn't make sense. You cannot continue to acquire assets while your assets are frozen and in the possession of the trustee in bankruptcy in a bankruptcy proceeding.


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