credit unions and bankrutpcy

[klux]

Ok, I filed a chapter 13 in 2002 and converted it to a chapter 7 in 2005. I since then did a "good" job at reestabilishing credit, I'm way in over my head. All of my loans are with a credit union, the same credit union. I have a trailblazer, harley davidson, and a truck. I want to keep all 3 items. They all have loans on them. I also have 2 unsecured loans with the credit union and my checking account. The harley and truck loan amount is very close to the value but my trailblazer is valued at about 15,000 but 28,000 owed. Would I have to pay back the 15,000 or 28,000? Can anyone advise if I'm going to probably have a problem with this because of it being a credit union? What can I expect? I meet with my attorney tomorrow. I'm hoping to file by next week as long as I can keep everything. Any advise is appreciated.

[kiddles]

I'm not sure BK is the answer - you could just end up in the same situation again, again.

And, I don think you can file right now - there's a certain length of time you must wait before being able to file BK after doing one. I don't think it's been long enough between then and now for you to be able to file again.

Be sure your attorney knows when you filed before, when you converted to a 7, and when you were discharged. He/She'll be able to tell you if it's even possible.

[HHM]

For sure, you will not be able to file a chapter 7.

You "might" be able to do a chapter 13 (but you will need to check with an attorney, as the timeframe for when you can file a 13, after a discharged 7 has changed).

The fact that everything is with a credit union is not good. Credit unions cross-collateralize all loans.

Your first step is to get your checking account out of the CU. Go open a new checking account at a regular bank. (the reason you do this is because most CU's are authorized to withdraw funds from your accounts to pay any defaults).

Whether you can pay the current market value vs the loan amount will depend on when you purchased the vehicle (or last financed it, i.e. if you did a refinance). What you are talking about is doing a Cram Down, i.e. forcing the lendor to accept the current market value as the balance owed on the vehilce vs the loan balance owed. I think you have to have the car for 910 days before you can Cram Down in a chapter 13.

But there are some factors involved that only a local attorney can truly advise you about?

[rrockinggramma]

I believe that he can't receive another discharge for 4 years but with a chapter 13, he will be in it for 5 years so that shouldn't be an issue I think. Now as to the credit union, first of all before you see your attorney, open up another account at another credit union. Move all your money out of the credit union you are currently with. Credit unions are notoriously nasty to members who declare BK and they can refuse to service you and due to their cross collateralization clauses will freeze funds and take what they can. So, that being said get yourself established somewhere else. Then put it all in your chapter 13. The only way you could cram down to FMV the vehicle that is upside down is if you have owned it for more than 910 days. If not, the full price will be paid. However, the credit union can only file a claim for the principal amount owed on the loans. To keep them, the trustee will pay them off at 100 percent plus some interest decided by the trustee (mine was 6 percent), then the unsecured will get the rest depending on the funding of your chapter 13.

[rrockinggramma]

As an afterthought also, when you see your attorney ask if it is possible to do a 722 on the upside down vehicle. Although I am not sure if they work with chapter 13's I would check out every option there. Then you would only pay the FMV on a new loan and the credit union would file a claim on the deficiency balance which would be classified as unsecured debt.

[HHM]

As an afterthought also, when you see your attorney ask if it is possible to do a 722 on the upside down vehicle. Although I am not sure if they work with chapter 13's I would check out every option there. Then you would only pay the FMV on a new loan and the credit union would file a claim on the deficiency balance which would be classified as unsecured debt.

722's are strictly a Chapter 7 device.

[klux]

Ok. I refinanced the upside down loan with the credit union in November 2006. I originially got it in 2005. How do they know if I've had it for 910 days or not? I'm just curious. If I can't do a "cram down" will they let me return it to them? How would that work? I know I can file a chapter 13, since another discharge wouldn't be until a minimum of 3 years, and my last was over 2 years ago. My budget wouldn't allow for me to make full payments on all these secured loan, I don't have much unsecured debt.

[HHM]

If you don't have much unsecured debt and your main problem is your secured debt (and you cannot afford that debt), a chapter 13 is probably not very helpful. As for how they know, a cram down in BK is between you and the creditor (the trustee is not involved), so arguably, the creditor knows when you bought it and when you refi'd. So, when you file your BK and the creditor receives your proposed plan, they will see if they are getting paid in full or not, if not, you can bet an attorney will show up for the car finance company. From the looks of things, you most likely cannot do a cram down. However, you may have an out, since you did a refi, that refi may be considered a non-purchase money security interest. However, that issue is a matter of state law and how your state defines purchase money security interest. If the loan is considered a non-purchase money security and is over 1 year old, you can bifurcate the claim, i.e. the secured portion of the claim is up to the current market value of the vehicle, any remaining balance over that amount is an unsecured claim.

If you cannot afford the vehicle and no longer want it, you might as well let the CU repo it. The only catch with doing so is your other loans with that CU and the fact that you will be hit with a deficiency balance (i.e. the difference between what the vehicle is worth and what is owed.

As before, if you are going to default, get your checking account and any other cash assets out of the CU.

Let us know what the lawyer tells you.

[lrprn]

I refinanced the upside down loan with the credit union in November 2006. I originially got it in 2005. How do they know if I've had it for 910 days or not? I'm just curious. If I can't do a "cram down" will they let me return it to them? How would that work?

How do they know when you purchased the car??? It's right on the title they hold until the loan is paid off, not to mention their own loan papers. Depending on exactly when you purchased the car in 2005, it may be more than 901 days. What month and date did you buy the car in 2005?

I know I can file a chapter 13, since another discharge wouldn't be until a minimum of 3 years, and my last was over 2 years ago. My budget wouldn't allow for me to make full payments on all these secured loan, I don't have much unsecured debt.

Klux, the bankruptcy laws stating the periods of time between filings for chapter 7 and 13 changed in Oct 2005.

When can you file again?
- Filed Ch 7 and successfully discharged - can file Ch 7 again in 8 years
- Filed Ch 13 and successfully discharged - can file Ch 13 again in 4 years

And then this from http://www.orb.uscourts.gov/orb/Docu...4?OpenDocument...


If I'm reading this right, you can file Ch 13 four years after a successful discharge of either your Ch 13 or Ch 7, but you won't receive a discharge. However, since your 13 was filed in 2002, it's been more than four years, so you can file Ch 13 with no strings attached.

The current bk law time frames between filing are confusing as you can see. You **REALLY** need sound legal advice rather than opinions on an Internet forum to make the right choices for yourself. You have a complex set of circumstances with multiple filings involved. Time to make appointments for free consultations with 3-4 experienced bankruptcy lawyers in your area. Get going!

[klux]

I bought the car November 25, 2005. Refinanced it in November 2006

[6ftladycop]

For sure, you will not be able to file a chapter 7.

You "might" be able to do a chapter 13 (but you will need to check with an attorney, as the timeframe for when you can file a 13, after a discharged 7 has changed).

The fact that everything is with a credit union is not good. Credit unions cross-collateralize all loans.

Your first step is to get your checking account out of the CU. Go open a new checking account at a regular bank. (the reason you do this is because most CU's are authorized to withdraw funds from your accounts to pay any defaults).

Whether you can pay the current market value vs the loan amount will depend on when you purchased the vehicle (or last financed it, i.e. if you did a refinance). What you are talking about is doing a Cram Down, i.e. forcing the lendor to accept the current market value as the balance owed on the vehilce vs the loan balance owed. I think you have to have the car for 910 days before you can Cram Down in a chapter 13.

But there are some factors involved that only a local attorney can truly advise you about?

What do you do if you can not cancel accounts with credit union?

[rrockinggramma]

surrendering the vehicle is an option. You need to decide however as your debt is mostly secured what you can live with and what you can live without.

[klux]

Just got back from my meeting with the attorney. We can do a cram down since these vehicles were refinanced. She said no problem with it being a credit union. The harley and the truck owe what they are valued at, the trailblazer we will pay $17000 of the $28500. She said the trustee is going to question the harley, but since my parents pay it and I'm including the income from them for it, it will be fine. I have to do a 5 year plan. She suggests I wait until 10/2 to file and to stop paying on everything. She said I'll start paying my first and second mortgage directly on 11/1. Now the challenge is making my husband understand that we will still be tight, but at least everything will be paid on time! I don't think he understands we've been about $1000.00 short each month, those stupid pay day loans are what have kept us afloat!

[HHM]

What do you do if you can not cancel accounts with credit union?

What do you mean "you can't cancel the account"

Remember, we are talking about the checking/savings/money market accounts (i.e. the cash accounts). If the CU won't let you "technically" close the account, simply withdraw all your money and stop any automatic deposits that go into the account.

[6ftladycop]

What do you mean "you can't cancel the account"

Remember, we are talking about the checking/savings/money market accounts (i.e. the cash accounts). If the CU won't let you "technically" close the account, simply withdraw all your money and stop any automatic deposits that go into the account.

What I mean is "as long as you owe them money, you will not be able to close any accounts that you have with them where money is deposited. They intend to get their money one way or another.